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Volkswagen de Mexico Employing RFID to Improve Parts Distribution
Today, only 30 percent of the VW dealers that order parts from Puebla are receiving the plastic containers—the others still receive orders in cardboard boxes that do not carry RFID tags. The participating dealers receive two shipments of parts from the Puebla plant per week, making the return process simple: When a new shipment arrives at each location, that dealership swaps the full containers for the empty ones.
As the empty containers are brought back to the Puebla warehouse, they are moved through a portal RFID reader, then each is checked back into the plant's stock of containers. If records show that a dealer has failed to return a tagged container within 10 days of delivery, it is charged a late fee.
The remaining 70 percent of the dealers receive parts shipments less regularly, and from trucks that are not used solely for runs between the Puebla plant and the dealerships. According to Flores, the factory is currently seeking a third-party logistics provider that will be able to pick up empty containers from these remaining dealers in a manner that is cost-effective.
To date, the plant has deployed 16,000 RFID-tagged reusable containers. In addition, it has 350 metal carts to which RFID tags had been attached during the pilot period, which are still being utilized. The carts are used for transporting very large or oddly shaped parts that do not fit into the containers. Mounted on the carts are Intermec passive EPC Gen 2 tags embedded in a protective housing—one that provides a buffer space between the tag and the cart's metal surface, because the latter could otherwise interfere with the RF signal, thus making the tag difficult to read.
Aside from saving the Puebla plant from paying the ongoing costs of cardboard containers to ship parts, Flores says, utilizing the reusable containers has significantly reduced the amount of waste packaging among the VW dealers receiving them. These dealers, he notes, sometimes reuse the cardboard boxes for internal purposes at their locations; otherwise, they would be trashed because most sites lack established recycling systems.
Based on the benefits of the new tracking system—reduced packaging costs, as well as a faster shipment verification system (capturing the RFID container tag, versus manually scanning its bar code as each container is loaded onto trucks)—Volkswagen de México wants to replicate the system at its parts distribution plants in Guadalajara and Monterrey, starting later this year. Eventually, Flores says, VW's U.S. parts distributors may also employ this RFID-based system for tracking parts shipments.
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As the empty containers are brought back to the Puebla warehouse, they are moved through a portal RFID reader, then each is checked back into the plant's stock of containers. If records show that a dealer has failed to return a tagged container within 10 days of delivery, it is charged a late fee.
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| At the loading dock, an RFID interrogator reads the tag of each plastic container placed inside the delivery truck. |
The remaining 70 percent of the dealers receive parts shipments less regularly, and from trucks that are not used solely for runs between the Puebla plant and the dealerships. According to Flores, the factory is currently seeking a third-party logistics provider that will be able to pick up empty containers from these remaining dealers in a manner that is cost-effective.
To date, the plant has deployed 16,000 RFID-tagged reusable containers. In addition, it has 350 metal carts to which RFID tags had been attached during the pilot period, which are still being utilized. The carts are used for transporting very large or oddly shaped parts that do not fit into the containers. Mounted on the carts are Intermec passive EPC Gen 2 tags embedded in a protective housing—one that provides a buffer space between the tag and the cart's metal surface, because the latter could otherwise interfere with the RF signal, thus making the tag difficult to read.
Based on the benefits of the new tracking system—reduced packaging costs, as well as a faster shipment verification system (capturing the RFID container tag, versus manually scanning its bar code as each container is loaded onto trucks)—Volkswagen de México wants to replicate the system at its parts distribution plants in Guadalajara and Monterrey, starting later this year. Eventually, Flores says, VW's U.S. parts distributors may also employ this RFID-based system for tracking parts shipments.
