Lavazza Uses RFID to Track Packaging Materials, Boosting Efficiency

"It provides real-time visibility on the flow of goods and provides traceability data," Rizzi says.

As Lavazza produces coffee and requires packaging, the company uses the RFID system to pick the oldest packaging in storage off the shelves. An employee utilizes a forklift to retrieve a pallet, and then interrogates the tag with a handheld reader. The system identifies the reels, designating them as "headed to production." The pallets are then placed onto carts connected like train cars and moved to the production area. Later, the project partners plan to evaluate the possibility of installing a portal reader that will interrogate pallets' tags as the pallets pass by on the way to production.

Antonio Rizzi, director of the University of Parma's RFID Lab

On occasion, Lavazza's production line does not use all of a pallet's reels of packaging, and consequently returns the remaining reels to the warehouse. When this occurs, the stretch wrapping and the RFID tag on that wrapping have already been removed and disposed of. In this case, a worker uses the handheld interrogator to read the extra RFID tag on the returned pallet. A Lavazza warehouse operator then must manually input the exact number of reels on the pallet before moving that pallet back into the warehouse.

According to Rizzi and Marzorati, the system has provided Lavazza and Goglio Cofibox with almost 100 percent accuracy on their inventories, along with significant time savings, since reels no longer need to be counted manually. What's more, Rizzi says, Lavazza is better able to manage its inventory since it has a real-time overview of its stock. In fact, he adds, the company has reduced its overall inventory levels since the RFID-based ordering, shipping and receiving processes have proven so reliable.

ID Solutions, an RFID spin-off company of the University of Parma, served as the project integrator and developed the logistics dashboard especially for this project. The dashboard features data formatted according to Electronic Product Code Information Systems (EPCIS) standards. Because of this shared system, the two companies can easily collaborate to replenish Lavazza's packaging supply. The partners agreed that Lavazza would place a yearly order for packaging, based on its average annual use of the materials.

As Lavazza gains a better overview of its production and its packaging needs each month, the firm revises its three-month forecast and sends updates to Goglio Cofibox electronically. The company also sets target delivery dates for each order. Goglio Cofibox then uses the information to update its production plan accordingly. This helps Goglio Cofibox, which has a production cycle of two weeks under normal conditions, to meet the concrete orders that arrive each Monday from Lavazza. The coffee company sends Goglio Cofibox its desired weekly delivery schedule, and the packaging supplier adjusts its production plans to match.