The results of Australia’s largest supply chain RFID pilot, the National EPC Network Demonstrator Project Extension (NDP Extension), are now available.
The NDP Extension was about demonstrating how EPC/RFID delivers business benefits in a real world environment, in this case, reliable electronic proof of delivery (ePOD). To do this, we needed to show that a scan rate of 100 per cent was absolutely achievable.
The Australian Government supported the pilot with a $109,500 grant from the Department of Communications, Information Technology and the Arts (DCITA) under its ‘Information Technology On-Line’ (ITOL) program.
GS1 Australia and RMIT University co-managed the pilot with Telstra and Retriever Communications as the service providers. Pallets were supplied by CHEP Asia-Pacific, while the pallet customers were ACCO Australia, Capilano Honey, Franklins/Westgate Logistics, Procter & Gamble/Linfox, and MasterFoods. NEC Australia also provided RFID support to CHEP.
More than 3,300 empty pallets were tagged so that the pallet hire and de-hire processes could be tracked using ePOD.
Tags were read when the pallets were picked against an order at CHEP and loaded onto a truck to be dispatched out to a customer (P&G, ACCO or MasterFoods), and read again after the truck driver had delivered the pallets to the customer. Pallets dispatched from Westgate Logistics’ facility for Franklins supermarkets were read at the time of picking for de-hire to CHEP, as well as at the time of receipt at CHEP.
Each set of pallets was associated with an order number using GS1’s unique serialised Global Returnable Asset Identifier (GRAI) written to each EPC/RFID tag as the basis of identifying individual pallets.
EPCIS (EPC Information Service) is the EPCglobal standard for how the EPC/RFID read information is managed and shared. Telstra’s EPCIS-compliant ‘Adaptive Asset Manager’ (AAM) communicated data to users via a web interface. Telstra was also able to send data to the CHEP truck driver’s PDA and the Retriever application meant the driver was able to observe the RFID reads.
There was no physical keying of any information. The Telstra AAM simply counted off the unique numbers at dispatch and then receipted those same numbers at delivery based on the RFID reads of pallet tags.
Telstra’s infrastructure (the AAM) meant information could be captured at different points through the process, providing visibility of goods through the supply chain and translating EPC/RFID reads into business transactions.
The top three lessons from the project
First, if you have the right team of talented people who have some experience and know-how, supported by good software and hardware, you can make RFID work. We’ve now had EPC/RFID success with wood, metal and moisture, achieving a consistent 100 per cent read rate.
Second, this was a real RFID implementation with real business transactions: real hire and de-hires, where no paperwork was used. The process was developed to a point where it could be left in production in a commercial sense.
Finally, we achieved real, identifiable savings – two of the CHEP customers reduced their process times by 14 and 22 per cent. Likewise, prior to the project, CHEP completed Six Sigma Kaizen analysis and identified that broader use of EPC/RFID could lead to a saving of 28 per cent in end-to-end processing time per journey.
Surprises and challenges
The surprise was that people are adopting the attitude that we don’t need a mandate. The challenge was 100 per cent read rates, especially given that we’d heard previously that only high nineties were do-able. The success of the project rested on our ability to achieve a 100 per cent read rate, and we did.
GS1 Australia’s objective is to share the learnings of this project and to encourage others to trial EPC/RFID. We want Australian industry to stop waiting, because other countries will soon leap ahead of us in efficiency.
As well as looking at what EPC/RFID will cost to implement, industry needs to examine what they can save by using this technology. Leasing infrastructure, such as the Telstra AAM solution, is also an opportunity to move RFID from a capital expenditure to an operational cost.
CHEP and Telstra were really attractive pilot participants given their existing infrastructure. If businesses started using RFID readers to read CHEP pallets in and out of locations all around Australia using the Telstra infrastructure to communicate, then thousands of companies will suddenly be capable of using RFID. They could then start to read stock movements from the end of a production line into a warehouse or track the movement of other goods coming in and going out. So, give it a year or two with CHEP rolling out these solutions and we could be looking at a really strong uptake of EPC/RFID in Australia, based purely on the business sense of tracking goods through the supply chain.
The NDP Extension report is available free of charge from GS1 Australia – visit www.gs1au.org.
John Hearn is the general manager of member and industry support for GS1 Australia.