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Cisco Testing, Deploying RFID on Multiple Fronts
Because Ingram keeps only 5 percent of Cisco goods in inventory, every other piece of Cisco equipment the company sells is made to order, which means each pallet built up to fulfill an Ingram order comprises differently sized and shaped cases—making it look nothing like a homogenous pallet carrying only one type of item. The cases' odd shapes also make it difficult to receive and manually (through bar-code scans) verify the shipments, because some small cases are occasionally missed. When Ingram employees must pull cases off the pallet to ensure each is identified, they can take up to a half hour to receive one pallet at its warehouses.
With streamlining this process as its goal, Menlo workers tagged the pallets of goods and sent along advance shipment notices to the Ingram warehouse in Carol Stream. There, the tagged pallets were brought into the warehouse through an RFID reader portal. If the portal interrogator was able to read every case and pallet RFID tag, the pallet would be verified. If the portal reader failed to capture all of the case tag EPCs, workers would break down the pallet and utilize a handheld interrogator to verify the receipt of each case that should be on the pallet, according to the manifest referenced by the pallet tag and the advance shipment notice.
Based on the pilot results, Cisco estimates that if each item were RFID-tagged at the point of manufacture, $2.2 million could be saved through improved efficiencies in the shipping and receiving processes. Ingram would accrue 60 percent of the benefits from such processes, Sheikh says, while Cisco would earn the balance. According to Sheikh, Cisco hopes to begin working with contract manufacturers to start tagging cases with RFID labels at the point of manufacture, and to work with Ingram and its other distributors to use the labels to track the shipments, all as part of a standard operating procedure. But exactly when this might happen is, as of yet, unknown.
Because Cisco employs a network of contract manufacturers to make its goods, however, as well as resellers and distributors to get them into customers' hands, the only way the firm can effectively deploy RFID in its supply chain is to engage those companies in its use of the technology. Cisco is also active in EPCglobal, and is currently working to develop standards and encourage the use of RFID technology across the supply chain.
"Cisco is basically an engineering company, and a marketing and sales company," Sheikh notes. "One hundred percent of our manufacturing and servicing is done by third parties—some of whom are much larger than us in terms of revenue and size." For that reason, the firm is encouraging these companies to begin using RFID, not just in dealing with Cisco but also in servicing its others customers. That way, Cisco would benefit as well as the other companies with which these third parties work. And if RFID leads to greater efficiencies and accuracy in the supply chain, Sheikh says, the third parties will benefit as well.
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With streamlining this process as its goal, Menlo workers tagged the pallets of goods and sent along advance shipment notices to the Ingram warehouse in Carol Stream. There, the tagged pallets were brought into the warehouse through an RFID reader portal. If the portal interrogator was able to read every case and pallet RFID tag, the pallet would be verified. If the portal reader failed to capture all of the case tag EPCs, workers would break down the pallet and utilize a handheld interrogator to verify the receipt of each case that should be on the pallet, according to the manifest referenced by the pallet tag and the advance shipment notice.
Based on the pilot results, Cisco estimates that if each item were RFID-tagged at the point of manufacture, $2.2 million could be saved through improved efficiencies in the shipping and receiving processes. Ingram would accrue 60 percent of the benefits from such processes, Sheikh says, while Cisco would earn the balance. According to Sheikh, Cisco hopes to begin working with contract manufacturers to start tagging cases with RFID labels at the point of manufacture, and to work with Ingram and its other distributors to use the labels to track the shipments, all as part of a standard operating procedure. But exactly when this might happen is, as of yet, unknown.
Because Cisco employs a network of contract manufacturers to make its goods, however, as well as resellers and distributors to get them into customers' hands, the only way the firm can effectively deploy RFID in its supply chain is to engage those companies in its use of the technology. Cisco is also active in EPCglobal, and is currently working to develop standards and encourage the use of RFID technology across the supply chain.
"Cisco is basically an engineering company, and a marketing and sales company," Sheikh notes. "One hundred percent of our manufacturing and servicing is done by third parties—some of whom are much larger than us in terms of revenue and size." For that reason, the firm is encouraging these companies to begin using RFID, not just in dealing with Cisco but also in servicing its others customers. That way, Cisco would benefit as well as the other companies with which these third parties work. And if RFID leads to greater efficiencies and accuracy in the supply chain, Sheikh says, the third parties will benefit as well.
