With the emergence of radio frequency identification, or RFID, technology, tracking inventory will soon get smarter and easier. RFID tags equipped with temperature sensors will let a grocery store know which milk cartons are spoiled. In the event of recall, drug makers won’t have to scrap whole pallets; they can pinpoint the bad drugs down to the case or item level.
But someone will need to test tags for placement and readability, and companies will need help to design and deploy RFID networks.
That’s where the Smart Packag-ing division of International Paper’s Memphis operation comes in. RFID is a generic term for technologies that use radio waves to identify tagged objects. IP embraced the implementation of RFID to track inventory at its large warehouse in Texarkana, Texas.
During this process, IP learned the ups and downs of the RFID world as it used the radio tags to keep track of miles of paper and raw materials. What it learned—besides how to navigate sensitive radio waves through the concrete and steel of its warehouse—was that its RFID knowledge would be valuable to its customers.
“RFID is an extension of our core competencies in paper and packaging,” says IP spokesperson Ramona Jackson. “It helps us offer additional value to current clients and differentiates us from other packaging companies.”
Established in 1999, IP’s Smart Packaging unit has become a leader in training, consulting and selling products to help distribution centers and manufacturers implement RFID systems.
As part of Smart Packaging, IP designed and opened a 25,000-square-foot warehouse demonstration, testing and training facility in June 2004. Dubbed the Customer Solutions Center, the non-temperature-controlled warehouse has concrete floors and walls, metal racks and other equipment to simulate the working environment.
“I have not heard of or seen another facility that has the breadth and depth of RFID technology know-how that these folks do,” says John Sidell, the co-founder of Esync, a Toledo-based supply chain consultant. “They are definitely a leader in the industry with that facility.”
Testing is a big part of RFID because the technology is not simply plug-and-play. The devices, which are radio transmitters and receivers, must be tuned properly. Also, every package is different and needs to be rolled on a conveyor or moved around on pallets and racks to determine the best tag placement.
The complex and inexact science of RFID—as well as the cost—has kept the technology from gaining wide acceptance, Jackson says. The tags can cost from 30 to 40 cents each, a big investment for tracking items that may be worth only two or three dollars. Most companies would like to see tags in the five to 10 cent price range, Jackson says.
Another problem for RFID is the expense of the equipment and software needed to run it and the lack of common standards among the equipment currently being used across industries.
Jackson says these issues will be worked out over time. “Remember when DVD players came out?,” she says. “They were terribly expensive at first.”
Because IP is confident in the spread of the technology, the company now offers training for customers in RFID solutions. Partnered with Dallas-based OTA Training, IP’s Memphis Customer Solutions Center hosts sessions for supply chain and IT staffers from all over the country.
“IP recognizes there are still very few knowledgeable RFID resources in many organizations,” says Jennifer Mao, a vice president with RFID software provider GlobeRanger Corp. in Texas. “That’s why IP offers classes in everything—from the basic physics to troubleshooting.”
These classes will become more important as consumer goods makers comply with RFID mandates from retailers and government agencies. Wal-Mart and Target each required a group of their vendors to be RFID-compliant by this past January. Some news reports, however, suggest compliance is lagging and will take a few more years to work out all the kinks.
Still, RFID will get a boost from the initiative, Jackson says.
IP also sells RFID equipment, including so-called “smart” shelves for retail and warehousing environments that can constantly monitor inventory and an RFID-enabled forklift that can track pallets and crates on the go.
As logistics personnel around the world consider the next generation of RFID technology—including embedding RFID tags directly into cardboard and global inventory tracking of individual items—IP is poised at the forefront.
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