RFID Cruises Down The Highway

Startup Viper Motorcycle Co. is going up against custom bike rivals American Iron Horse and Big Dog by fine-tuning its supply chain, installing SAP Business One applications, and deploying radio-frequency identification technology. This is all in an effort to maintain an audit trail, control inventory, and make Viper's 14,000-square-foot manufacturing facility hum.

The company was co-founded by Genesis Capital Group Inc. owner John Lai and is headed up by former Harley-Davidson executive Clive Fessler. Viper spent nearly $4 million designing the Viper Diablo and other custom V-twin heavyweight motorcycles, which went into production last month, and the company wasn't about to skimp when it came to business technology.

Though RFID tags have yet to reach the hoped-for 5-cent-per-item level, Viper in April began putting the tags, which now cost about 50 cents a pop, on transmissions, engines, headlights, gas tanks, and other parts valued at more than $75 each. Viper's investment in RFID, hardware, software, and other IT technology to date is approximately $150,000.

Though not as large an investment as some manufacturers are making to meet retailers' RFID mandates, that's no small amount for the startup. Viper has budgeted another $14,000 for the project this year, and "that's really not enough," CFO Garry Lowenthal says.

The company saw its first payoff on the RFID investment when Lowenthal identified and located--in an employee's van-- a missing $2,400 transmission after conducting a random inventory audit last month.

Today, with production in full swing, Viper also uses RFID tags to track the movement of subassembly parts through the production facility to identify where motorcycles are in the manufacturing process. The company plans to create a Web portal using SAP that would give dealers online access to inventory and delivery stats based on information from tags. "The dealers will know our inventory levels and the quantity of bikes we can manufacture and sell," Lowenthal says.

That's not possible right now because data collected from the tags must be manually integrated with the company's SAP system, which went live in the first quarter of this year.

But Viper is installing Fourth Shift, a manufacturing application from SAP partner SoftBrands Inc. that integrates with SAP Business One and supports RFID data formats.

Meanwhile, SAP Business One is doing a fine job, Lowenthal says. The fully integrated enterprise-resource-planning system means the company won't need to add an E-commerce application when it moves into selling online parts and accessories to dealers and hats and leather jackets to consumers.