By Elizabeth Wasserman
Apr. 1, 2005—Beaver Street Fisheries, a Jacksonville, Fla., frozen-seafood dealer, was founded in 1950 by the Frisch brothers and their mother as a small retail fresh-fish store on West Beaver Street. The company has expanded to become one of the top seafood suppliers in the United States, importing fish from 50 different countries. Its warehouses and U.S. Department of Commerce- inspected seafood-processing plant take up two city blocks.
For the past 15 years, Beaver Street Fisheries has been a Wal-Mart supplier. Today, the company ships 270,000 cases of frozen lobster tails, snow crab, breaded jumbo shrimp and other seafood products to Wal-Mart each month. Yet, Beaver Street Fisheries is not one of the retailer’s top 100 suppliers, so it doesn’t have to comply with Wal-Mart’s requirement to put RFID tags on pallets and cases shipped to the retailer’s distribution centers until January 2006. (Top 100 suppliers began tagging shipments in January 2005.)
Nevertheless, as of December 2004, Beaver Street Fisheries has been tagging 5,000 cases—including three different product lines—shipped each month to Wal-Mart’s Perishable Foods Distribution Center in Cleburne, Texas. The seafood supplier met Wal-Mart’s mandate one year and one month ahead of schedule.
“We decided to be proactive and jump into it and grab the bull by the horns,” says Howard Stockdale, CIO of Beaver Street Fisheries. “We’ve always prided ourselves on being the value-added supplier. We wanted to provide that additional value not just to Wal-Mart but also to other customers coming down the pike.”
What began as an aggressive project to meet Wal-Mart’s tagging mandate ahead of schedule has evolved into a three-phase plan to deploy RFID throughout Beaver Street Fisheries’ operations. The company realized that it could reap long-term benefits by using RFID data to track and reduce inventory, automate manual shipping and receiving processes, automatically issue bills and bills of lading, reduce theft and gain a better understanding of where the company could reduce overhead and increase profits. “We wanted to be the poster child for small to medium-size businesses as it relates to RFID implementation,” Stockdale says.
In the first phase, Beaver Street Fisheries took a “slap-and-ship” approach to tagging seafood destined to Wal-Mart. The second phase, which began in February, is designed to make the tagging process more efficient and cost-effective. The third phase, which is expected to get under way some time in the next two years, is where the company expects to gain business benefits by using the data generated from a full implementation of RFID throughout its product lines.
The project began in fall 2003 when Jim O’Brien, Beaver Street Fisheries’ COO, brought the Wal-Mart announcement to Stockdale’s attention. The men discussed the upcoming deadlines and concluded that complying earlier could help Beaver Street Fisheries keep—and perhaps increase—its business with Wal-Mart. The two also believed that RFID readiness could help Beaver Street Fisheries gain other business, including contracts with the U.S. Department of Defense, which is requiring the use of RFID tags to track pallets and cases in its supply chain, and Albertsons, the second-largest U.S. supermarket chain, which started in March 2004 to solicit volunteer suppliers to implement RFID.
With the support of Beaver Street Fisheries CEO Harry Frisch and his son, Karl, who is executive vice president, Stockdale contacted Wal-Mart CIO Linda Dillman in January 2004 and told her that his company wanted to grow its business in order to one day be in the top-100 echelon. To do that, the company wanted to volunteer to start tagging products ahead of schedule. Dillman, in turn, invited Stockdale to a meeting Wal-Mart was holding near its Bentonville, Ark., headquarters to explain its RFID policy to its top 100 suppliers.
Getting started
The more Stockdale learned about RFID at the Wal-Mart supplier meeting, the more he realized that RFID technology could be used by Beaver Street Fisheries to reengineer the company’s business processes. As with many small and midsize firms, Beaver Street Fisheries has a homegrown warehouse management system crafted by the company’s IT department to track inventory. Stockdale and his crew also developed their own enterprise resource planning software to get a sky-level view of what’s going on at the business. The company relies on bar codes to identify its product lines, which requires workers with handheld readers in the warehouses to physically scan shipments as they are sent or received.
Stockdale followed Wal-Mart’s guidelines for how to get started. In February 2004, he assembled a cross-functional team at Beaver Street Fisheries, which included O’Brien; Steve Wade, head of shipping; Larry Howe, warehouse manager; Roger Denmark, case-ready production manager; Sloan Erdman, production manager; Brigette Cruz, special projects manager; and Sam Kalil, director of Wal-Mart sales. Stockdale chaired the RFID committee.
On Feb. 10, the group met with Rich Bruce, an RFID specialist with The Danby Group, a supply chain integrator. He brought along Matt Ream, RFID market development manager, and Jim Sojka, regional sales manager, both of Zebra Technologies, which makes bar code label printers that can also write data to RFID tags embedded in smart labels, and a representative from Matrics, at the time one of only two companies that designed and manufactured EPC-compliant RFID tags and readers. (That representative no longer works at Matrics, which is now owned by Symbol Technologies.) They discussed the different types of tags, antennas, readers and printers that could be used to meet Wal-Mart’s mandate.
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Bruce also gave a presentation about the myriad other ways RFID could be used at Beaver Street Fisheries—including receiving and tracking frozen seafood at the warehouse, tracking the temperature it was frozen at in transit, and locating employees with RFID badges in the event of an emergency, such as a hurricane or fire. “They have 110 containers in transit at all times,” Bruce says. “They could use RFID to locate material in the warehouse, do inventory, pull products, collect data through the portals, track trucking in the yard.” After the meeting, Bruce says, “They started burning up the Internet looking for information.”
The RFID group at Beaver Street Fisheries met weekly. Bruce returned a few weeks later with Jeff Wells, president of Franwell, a Florida company that specializes in implementing RFID systems, to talk about Franwell’s rfid>Genesis software, which uses data from a company’s existing warehouse management system to encode RFID tags and send commands to an RFID tag printer-encoder. Wells also introduced the company to GlobeRanger’s iMotion Edgewhere platform, a middleware layer for managing devices, networks, data and processes around the enterprise, enabling real-time responses. Franwell’s software is built to run on the GlobeRanger platform. In addition, Bruce Welt, Ph.D., assistant professor at the agricultural and biological engineering department’s packaging science program at the University of Florida in Gainesville, was brought in as an advisor because of his research on using RFID to track food products.
During the course of several weeks, the RFID group at Beaver Street Fisheries also brainstormed with company officials, including representatives from accounts receivable and inventory control, on how to automate various processes.
“They have never looked at this as an added cost of doing business with Wal-Mart,” says Bruce. “This was a way for them to leapfrog ahead of their competition. They have always been positive about this, not like everyone else who is looking at this as a pain or a hassle. They believe being compliant with Wal-Mart will help them target other business.”
Meeting the mandate
Beaver Street Fisheries held a review session with Wal-Mart in March 2004, at which time executives from the two companies agreed that the seafood company would start by tagging all pallets and cases of its Sea Best brand jumbo breaded shrimp, catfish nuggets and snow crab clusters—three popular product lines that have different case configurations on pallets. By that time, Beaver Street Fisheries was developing its three-phase plan for implementing RFID throughout the company.
Beaver Street Fisheries’ initial goal was to meet the Wal-Mart mandate ahead of schedule, as well as to learn how different tags perform, whether the tags would function in subzero freezers, and where RFID labels should be placed on pallets and cases to get the highest read rates. The first three product lines the company planned to ship to Wal-Mart with RFID tags came from its seafood processing plant and were stored in warehouses, which contain 75,000-square-foot freezers that operate at minus 25 degrees Fahrenheit.
The company also wanted to test RFID tagging in different areas of its operation—in shipping and receiving, at the processing plant and in front of freezer doors in the warehouses. The RFID team believed it would be too costly and difficult to initially integrate tagging in four different locations of the complex—three warehouses and one processing plant. “We could have gone out and spent a lot of money duplicating it in all these different places,” Stockdale says. Instead, with the help of Bruce, the assorted vendors and Welt, Beaver Street Fisheries developed a portable tagging station.
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The 6-foot-by-3-foot station is made of stainless steel and can be rolled around the grounds on casters. The station has lockable cabinets that house a computer with a touch screen and two Zebra R110 multiprotocol stand-alone RFID printer-encoders, which can encode and print bar code labels with EPC Class 1 and Class 0+ tags embedded in them. That was important because the company wanted to experiment with different tags as it tests different products. Beaver Street Fisheries is currently using Class 1 tags from UPM Rafsec on some products and Symbol Class 0+ tags on others.
Franwell’s rfid>Genesis software, running on GlobeRanger’s iMotion platform, encodes the tag information from Beaver Street Fisheries’ warehouse management system, communicates with the printers and logs the information in a database.
To validate the functioning of tags in the labels on the spot, the company purchased two Matrics DC200 portal units, each containing a Matrics AR400 RFID reader, two 3-foot-tall antennas, status lights and motion sensors. Beaver Street Fisheries saved money by mounting the reader and antennas onto wheels and moving them about the facility with the portable tagging station.
The tagging process is heavily dependent on human labor. Beaver Street Fisheries employees about 400 people and roughly 125 of them work in the warehouses. As the cases come off the assembly line from the processing plant, they are stacked on pallets and then the pallets are separated according to their destination. Pallets bound for Wal-Mart are further sorted, based on which cases will receive RFID labels. Then the pallets are stored in the freezers.
When the company needs to fill an order for Wal-Mart, warehouse workers manually take apart loaded pallets. The workers roll over the portable tagging station and the portable readers. RFID labels are applied by hand to the cases, and the pallets are put back together, issued an RFID label and then sent to Wal-Mart’s distribution center. Currently, members of the RFID team and the company’s IT staff have been operating the tagging station. After they print a label and encode the tag, they manually pass it over the shelf antenna mounted on the portable tagging station or through the reader portal and test that the RFID tag is responding to signals from the antennas. If the tag is valid, they affix the label to a case.
Beaver Street Fisheries also has been using the portable tagging station to test tag performance on a variety of seafood at different temperatures. If a frozen shipment should begin to thaw, water condensation could build up on RFID labels and impact read rates on individual cases on a pallet. That’s because water absorbs radio waves at ultra-high frequencies and interferes with getting a reading. The same is not true of ice. “It’s not the temperature but the state of matter that makes a difference,” says the University of Florida’s Welt. “Ice is a lot less absorbent than water. Tags can be read freely in blocks of ice.” Stockdale says the company is monitoring the issue, but so far condensation hasn’t been a problem.
For some still unknown reason, the company found that radio signals can be read more easily on cases of certain types of fish. “On some pallets, we will be able to read the inner cases, depending on the product,” says Stockdale. “Snapper, for instance, reads better than grouper.” The company has been experimenting with pallet configurations and tag placement on the cases inside those pallets. The product lines that Beaver Street Fisheries is currently shipping to Wal-Mart with RFID tags all have different pallet configurations. A pallet of breaded jumbo shrimp holds 60 cases, while a pallet of snow crab holds only 27 cases.
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In the coming months, Beaver Street Fisheries plans to add to and change some of the products it’s shipping to Wal-Mart, based on different items or RFID tags the company wants to test. Stockdale says the company will phase in tagging of other product lines it ships to Wal-Mart over the next few months and expects to comply with the retailer’s January 2006 deadline for full compliance. The next phase of Beaver Street Fisheries’ implementation—automatic labeling—should help the company meet those goals.
Improving efficiency
Beaver Street Fisheries’ RFID team understood early on that phase two—automatically applying RFID labels to cases before they are assembled into pallets—is essential to reduce the amount of time and the number of workers it takes to tag cases. The company hasn’t yet decided which product to test first, but it will likely be one of the company’s Sea Best products destined for Wal-Mart. Stockdale expects that the automatic RFID labeling system will be up and running on the seafood processing plant’s assembly line by the end of March.
Stockdale says vendors Zebra, Franwell and Quadrel, a label applicator manufacturer, are now building an automatic RFID labeling station to install alongside a conveyor belt, using RFID software developed by Beaver Street Fisheries. Before cases go down the conveyor belt, workers will manually enter the product type inside the cases so the appropriate product information will be encoded onto the RFID tag and printed on the bar code. Sensors will determine the weight of each case and communicate that information to a computer running the software. The software will incorporate weight and other product information and generate a serial number for the RFID tag. Then the Zebra R110 printer will encode a Class 1 tag and print a label, which will include a bar code. The printer will read the tag to make sure it was encoded properly. If the tag is good, a Quadrel automatic label applicator will apply the RFID label to a case. If the tag is dead, the applicator will reject it, and the software will instruct the Zebra R110 to issue a new label. If the new tag successfully emits a response to the reader, it will be applied to the case.
The case will proceed down the conveyor belt and pass a Symbol shelf antenna mounted on the side of the conveyor, to make sure the read rates comply with Wal-Mart’s and other retailer’s requirements. The case will then be put on a pallet. When the pallet is shrink-wrapped, a pallet tag will be generated from a Zebra R110 stand-alone printer-encoder and applied manually. As the pallet is moved out of the production-processing area, it will pass through a portable Matrics DC200 portal, and the pallet and case tags will be read again.
Stockdale says Beaver Street Fisheries expects to realize benefits in the third phase of its RFID deployment, which should begin within the next two years. That’s when the company will deploy readers at loading-dock doors and start using the data captured from RFID-tagged pallets and cases destined for Wal-Mart and other companies. Beaver Street Fisheries’ RFID team believes there are all sorts of manual internal business processes that could be automated.
The company’s long-term vision involves convincing its seafood suppliers around the world to apply RFID tags at the source with data such as country of origin, method of catch, weight, date and temperature at which the seafood was frozen. Beaver Street Fisheries is required by the government to keep this information, and it could help the company ensure that its products have a long shelf life for its own customers. Seafood tagged at the source could be automatically received into Beaver Street’s inventory, and payments could be automatically initiated, instead of requiring workers to key in information and authorize payment to seafood suppliers.
Casting a wide net
Beaver Street Fisheries’ experience is different from that of many of Wal-Mart’s top 100 suppliers, because the company is smaller, less complex and—admittedly—further behind in its supply chain technology and business process infrastructure. While the company uses bar codes on shipments and keeps pertinent information for government regulators, it doesn’t use the information to analyze sales and look for how it could cut costs and boost sales.
“The less sophisticated you are, the easier it is to make gains,” says The Danby Group’s Bruce. “If you’ve already optimized your facility and processes, then doing this is a real pain.”
So far, Beaver Street Fisheries has spent roughly $100,000 on its RFID implementation for phases one and two. The company says it has been able to keep costs low by using the portable tagging station and by beta-testing products, including the Zebra R110 printer-encoder, the Franwell software and a variety of RFID tags from Alien, Symbol and UPM Rafsec. “When companies are bringing new products to market, they want to put them in a real-world environment,” Stockdale says. “The real test is actually out in the real world.”
But it’s still a hefty investment for a small company. Most of the tags it tested cost between 70 cents and $1-plus each. A full conversion to RFID using its present 70-cent tags would cost Beaver Street $189,000 a month for case tags alone. The additional cost for pallet tags would add several thousand dollars to that monthly tab. Stockdale says that the company has been assured by its vendors that it can upgrade to EPCglobal’s Generation 2 standard, which was ratified in December, and hopes the new standard will bring better-performing and less expensive tags. He says that Beaver Street Fisheries has started to convert its own RFID labels, working with its longtime Jacksonville-based business partner Donnick Label Systems.
Beaver Street Fisheries is using its status as an RFID-capable seafood supplier to seek other business. The company has volunteered to ship RFID-tagged products in two other pilot programs—one involves a retail chain, the other does not (the company declined to specify these organizations). “If you want to be in the game,” Stockdale says, “you have to bring a bat and a ball.”
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