Paddling to Profits
Some packaged-food manufacturers are getting swamped by the costs of meeting retailer RFID-tagging mandates, but others are staying afloat by examining how the technology could help them improve business practices and meet government food safety regulations.
By Elizabeth Wasserman
Dec. 1, 2008—Many large packaged-food manufacturers are in the same boat as Nestlé. The Swiss-based international producer of chocolate, baby food, pet food and other food products has been RFID-tagging cases and pallets of goods to meet retailer mandates from Wal-Mart in the United States, Tesco in the United Kingdom and Metro Group in Germany. The retailers are using RFID data to reduce out-of-stocks, automate receipt of goods and keep better tabs on inventory. But Nestlé believed the benefits were somewhat one-sided, because the company had already optimized its internal business processes with information technology.
At least, that's what Nestlé officials thought until researchers at Cambridge University's Institute for Manufacturing convinced the company to re-examine its internal production processes in the making of everything from chocolate to coffee. Nestlé U.K. has since identified a handful of business benefits that it could gain from using RFID, in preparation for RFID pilots that could begin early next year in conjunction with the European Union-funded BRIDGE project, coordinated by GS1.
Among the potential pilots is a track-and-trace operation to RFID-tag reusable containers employed in the manufacturing process, including vessels that transport ingredients, bins that hold chocolate candies waiting to be packaged and molds used to make the candies. "We need to know where they are and what state they're in—are they available, have they been cleaned, are they full or empty, and what product was made in them last," says Paul Roberts, logistics manager of Nestlé U.K., who is shepherding the BRIDGE pilots.
Dec. 1, 2008—Many large packaged-food manufacturers are in the same boat as Nestlé. The Swiss-based international producer of chocolate, baby food, pet food and other food products has been RFID-tagging cases and pallets of goods to meet retailer mandates from Wal-Mart in the United States, Tesco in the United Kingdom and Metro Group in Germany. The retailers are using RFID data to reduce out-of-stocks, automate receipt of goods and keep better tabs on inventory. But Nestlé believed the benefits were somewhat one-sided, because the company had already optimized its internal business processes with information technology.
At least, that's what Nestlé officials thought until researchers at Cambridge University's Institute for Manufacturing convinced the company to re-examine its internal production processes in the making of everything from chocolate to coffee. Nestlé U.K. has since identified a handful of business benefits that it could gain from using RFID, in preparation for RFID pilots that could begin early next year in conjunction with the European Union-funded BRIDGE project, coordinated by GS1.
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Among the potential pilots is a track-and-trace operation to RFID-tag reusable containers employed in the manufacturing process, including vessels that transport ingredients, bins that hold chocolate candies waiting to be packaged and molds used to make the candies. "We need to know where they are and what state they're in—are they available, have they been cleaned, are they full or empty, and what product was made in them last," says Paul Roberts, logistics manager of Nestlé U.K., who is shepherding the BRIDGE pilots.
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