Early ‘Internet of Things’ Pilots Proved Supply Chain Benefits of RFID Pallets
Two early pilots were facilitated by Supply Chain Network and carried out in 2003 and 2006 with both representing successful demonstrations of the potential supply chain benefits available through ‘Internet of Things’ implementations.
Key to both of these pilots were RFID enabled pallets and the first project was the SCN Grocery Pilot which was carried out utilizing RFID at the pallet level for automated Distribution Centre (DC) receiving.
For the second pilot in the Office Products Industry, a combination of both pallet level and case level RFID was utilized to deliver significant results for both automated Distribution Centre Receiving and automated Direct to Store Delivery receiving.
Most surprisingly we are now more than ten years further into the future following successful completion of these two pilots and only now is the topic of ‘Internet of Things’ starting to gain traction in the business world.
Given the rising interest and accelerating emergence of the ‘Internet of Things,’ especially in the supply chain space, we thought a review of these two early pilots and actual results achieved would be instructive and help to further facilitate advancement of the latest iterations of the supply chain ‘Internet of Things’.
SCN Grocery Pilot
Pilot Description:
The SCN Grocery Pilot Project allowed the participants to create full visibility in their shared supply chains by introducing RFID enabled pallets, GPS (on vehicles), EDI Messaging, Master Schedule and Dashboard reporting tools. Expected outcomes from implementing the end to end SCN process included On-time deliveries, Accelerated Receipt with RFID, Elimination of Delayed Receipts and In transit geofence monitoring/alerts of product shipments.
Pilot Scope:
Main participant in the SCN Grocery Pilot was Sobeys and two locations were enabled for the pilot, the Sobeys DC in Whitby and the Schenker/Unilever facility in Brampton. In order to support the pilot, the SCN Project team installed, tested and then operated the end-to-end SCN Project Process including ASN, RFID (pallet level), GPS and integrated SCN Master Schedule, Dashboard and Activity Hub.
Results & Benefits:
(from 4 hours down to 2 hours)
– Sobeys tested and verified their satisfaction that technology was solid and reliable.
– Identified potential ongoing ROI implementation for Full pallet receiving
– Led to industry level project to advance from pallet to case level (CCGD)
If you’d like to learn more about the SCN Grocery Pilot, here’s a link to the summary presentation.
SCN Office Products Pilot
Pilot Description:
The SCN Office Products Pilot Project allowed the participants to create full visibility in their shared supply chains by introducing combined application of RFID (pallet & case), GPS (on vehicles), EDI Messaging, Master Schedule and Dashboard reporting tools. Expected outcomes from implementing the end to end SCN process included On-time deliveries, Accelerated Receipt with RFID, Elimination of Delayed Receipts and In transit geofence monitoring/alerts of product shipments.
Pilot Scope:
Key participant in the SCN Office products Pilot was Staples Canada and two locations were enabled for the pilot Store 3 in Toronto and Delivery Centre 99 in Mississauga. Two suppliers were enabled for the pilot, UPS for the Staples Private Brand products and Unisource, Staples major paper products supplier.
Systems Architecture utilized for pilot project consisted of: RFID Tag Encoding at Supplier Sites, ASN Implementation at Supplier Sites, ASN EDI transfer to Staples by Suppliers, FTP upload of Advanced Shipping Notification data, RFID enabled Automatic Receiving and Reconciliation, at both Staples locations and Detailed Reporting capabilities in Descartes Portal.
Results & Benefits:
In order to best capture the positive impacts of the SCN Office Products Pilot criteria were developed for both Qualitative and Quantitative items to be measured during the pilot.
Quantitative Success Criteria results are as follows:
– Demonstrate inbound portal read rates in 99.9-100% range (1 or 2 portals as needed) NO 97.41%
– Number of receiving variances between Manual checking process versus RFID process (less than 1%)YES .8% (99.2%)
Subsequent solution identified to bring to 100%.
Qualitative Success Criteria results are as follows:
– RFID handheld and barcode to RFID process YES
– Functional receiving portal structures
at both Store 3 and DC99 YES
– ASN format & communications from
Staples to Vendors YES
– Backend systems connectivity
and reporting comparisons YES
– Master schedule, Activity hub
and dashboard complete YES
– Implement successfully complete end-to-end integrated SCN Process with above technologies. YES
If you’d like to learn more about the SCN Office Products Pilot, here’s a link to the results presentation.
As you can see from the above results the supply chain benefits of utilizing RFID pallets was proven. In the case of the SCN Grocery Pilot the 50% improvement in gate to gate receiving time from 4 hours to 2 hours could have significant supply chain impact.
In an 8 hour shift a transport delivery truck could only do 2 deliveries based on 4 hour receiving times. Based on the demonstrated reduction to 2 hours the same truck could make 4 deliveries effectively doubling the number of deliveries while at the same time also reducing the overall delivery cost and environmental impact.
Likewise, inside the receiving Distribution Centre the labour required to process the receipts would also equally be reduced by 50% while at the same time doubling the dock throughput per shift.
In the Office Products Pilot, the DC Delivery component demonstrated above again validated the 50% reduction already confirmed in the Grocery Pilot. Even more dramatic were the potential savings identified of 85% in the direct to store receiving process, additionally product would be moved onto the selling floor much more rapidly than in the status quo manual receiving operation.
Concluding, although both of these pilots were carried out a number of years ago, the results demonstrated the proven benefits available through the ‘Internet of Things’ implementation of RFID pallets.
And although these pilots proved the benefits, the rollout of these projects did not take place mainly due to the high cost of the surrounding technology, equipment and infrastructure at the time.
As well, components such as the RFID pallets used in these pilots were not purpose built and created through modifying standard wood pallets. Today options for purpose built pallets with additional carbon reduction options are now available on a mass production basis to support similar RFID pallet initiatives.
What makes such implementations even more compelling today is the dramatic reduction in these costs (80% lower) and increase in performance of all required components for implementing RFID pallets as a first step in building your supply chain ‘Internet of Things.’
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