It's not the cost of readers, tag encoders or even middleware and integration that is blocking RFID adoption, it's the cost of tags — which at 50 cents each can add up when applied to every pallet or case shipped. Economies of scale will gradually lower tag costs, but why implement RFID now unless you face a mandate, such as those from Wal-Mart and Target? TNT Logistics, a transportation, warehousing and supply chain services provider, is using RFID to improve service to a big-three auto manufacturer without incurring ongoing tag costs.
Some freight carriers now give capacity priority to shippers that translate their demand planning into advance shipping notices. That's one reason transportation management systems (TMS) are selling better now. Another reason: CFOs increasingly seek better visibility into transportation and logistics cost details. An ARC Advisory Group study shows the TMS market growing steadily.
Auto parts stored in a TNT warehouse in Michigan must be delivered to the assembly line on time, in precise quantities. In a first-phase deployment completed in three months over the summer, TNT installed RFID readers at loading docks and tagged the reusable containers that transport parts to the assembly line. TNT used Tibco RFID Interchange software to integrate with its supply chain applications.
"I have a manifest for which containers go with which load and to which plant," says TNT technology services director Terry Tutt. TNT now scans containers as they're loaded, verifying that the right parts are going to the right location. In a second phase now underway, TNT will provide the manufacturer with real-time information on the location of parts through a portal.
The company is analyzing trends on pickup and ship times as well as gaps in the loading process. Paperwork and process times have been reduced, and signoffs at the loading dock and advance shipment notices to customers are generated automatically. TNT's success is a prototype for supply chain processes that rely on reusable, round-trip containers.
— Doug Henschen