Finnish Tractor Manufacturer Harvests RFID
Valtra is collaborating with a parts supplier to improve inventory management and streamline processes.
By Mary Catherine O'Connor
Nov. 2, 2009—Valtra, a Finnish manufacturer of custom tractors, must run a very efficient manufacturing process. Because its tractors are made to order rather than mass-produced, falling short on parts disrupts production. As such, Valtra works closely with its suppliers to ensure that its factory in Suolahti is always adequately stocked to fulfill orders.
But since each tractor is made to order, it's nearly impossible for suppliers to know which parts and components will be consumed on a day-to-day basis. Thus, the companies must maintain inventory levels at Valtra's warehouse to cover all short-term manufacturing needs—but without overstocking, because they own their parts until they're consumed. To maintain this delicate balance, suppliers must check their inventory often—in many cases, daily.
To help automate and streamline its parts replenishment and parts inventory-management processes, Valtra began testing passive ultrahigh-frequency (UHF) RFID tags and interrogators in 2003. The technology showed promise, but was not mature enough to meet the company's needs at that time, says Antti Virkkunen, CEO of Vilant Systems, a Helsinki systems integrator specializing in RFID applications. In late 2006, Valtra worked with one of its suppliers, Metal Power, and Vilant on a second pilot, which demonstrated that RFID technology had matured significantly. Vilant then designed an RFID system that can track parts from suppliers' facilities to Valtra's warehouse.
Nov. 2, 2009—Valtra, a Finnish manufacturer of custom tractors, must run a very efficient manufacturing process. Because its tractors are made to order rather than mass-produced, falling short on parts disrupts production. As such, Valtra works closely with its suppliers to ensure that its factory in Suolahti is always adequately stocked to fulfill orders.
But since each tractor is made to order, it's nearly impossible for suppliers to know which parts and components will be consumed on a day-to-day basis. Thus, the companies must maintain inventory levels at Valtra's warehouse to cover all short-term manufacturing needs—but without overstocking, because they own their parts until they're consumed. To maintain this delicate balance, suppliers must check their inventory often—in many cases, daily.
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| Since each tractor is made to order, it's nearly impossible for suppliers to know which parts and components will be consumed on a day-to-day basis. |
To help automate and streamline its parts replenishment and parts inventory-management processes, Valtra began testing passive ultrahigh-frequency (UHF) RFID tags and interrogators in 2003. The technology showed promise, but was not mature enough to meet the company's needs at that time, says Antti Virkkunen, CEO of Vilant Systems, a Helsinki systems integrator specializing in RFID applications. In late 2006, Valtra worked with one of its suppliers, Metal Power, and Vilant on a second pilot, which demonstrated that RFID technology had matured significantly. Vilant then designed an RFID system that can track parts from suppliers' facilities to Valtra's warehouse.
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