Educated SCM

Savi links technologies in university/industry project for supply chain management

Sunnyvale, CA  December 20, 2001  There has to be a better, more efficient way  at least that is what companies that track and manage thousands of pallets and containers full of products or parts daily are hoping.

In response, Savi Technology, a provider of real-time logistics solutions for supply chain asset management, security and collaboration, is in the process of engineering and implementing an automated logistics monitoring system for the Auto-ID Center. The project, spearheaded by the Massachusetts Institute of Technology (MIT); Cambridge University; and leading technology, logistics, retail and manufacturing companies, seeks to develop open technological standards for managing supply chains through the use of Radio Frequency Identification (RFID) tags and the Internet.

In addition to Savi, other members of the Auto-ID Center project include Procter & Gamble, Unilever, The Gillette Co., Philips, Johnson & Johnson, CHEP International, the U.S. Department of Defense, the U.S. Postal Service and the Uniform Code Council.

The main goal of the project is to create one seamless supply chain network where conveyances and the product containers they transport are affixed with RFID tags that can wirelessly transmit their identification to the Internet through radio frequencies. Those involved with the project cite research that shows real-time interaction between the products and logistics professionals via the Internet will save billions of dollars in lost, stolen, wasted or delayed products and make quantum improvements in the overall efficiency and collaborative abilities of supply chain management.

"The supply chain technology expertise Savi brings to this project helps give us the potential to achieve real-time interaction between products and logistics professionals that will smooth Collaborative Planning, Forecasting and Replenishment (CPFR)," said Simon Ellis, supply chain futurist for Unilever. "For retailers, this pilot is the first step toward addressing their biggest problem  the last 50 feet, getting product to the shelf."

The first phase of this project was recently implemented with the development of a pilot project in Tulsa, Okla. RFID tags, embedded with microchips holding key logistics information, were affixed to pallets at a handful of distribution centers supporting a major retailer.

Each RFID tag was then assigned a unique Electronic Product Code (EPC). Reading devices in the distribution centers and stores automatically captured the unique numbers of the code from each tag  which point to a specific Web address where information about the pallet is stored  and transmitted them through radio frequency waves to a network of computers.

Savi is providing expertise to help set up and integrate this automatic data collection network with the Internet.

Initially, pallets carrying products manufactured by Gillette, Unilever and Procter & Gamble are tracked from their own distribution centers to retailers. The second phase, expected to begin the first quarter 2002, will test the system's capacity for handling more inventory and information at additional locations.