Kerry Logistics Looks at the Big Picture for Item-Level RFID

By using the RFID system, Kerry Logistics maintains a record that its staff can access, indicating what was packed and shipped, and to whom. Initially, the company is employing 25,000 tags, to be attached to the cameras' packaging as they are packed. When those tags are used up—which the two companies estimate will occur sometime toward the end of the first quarter of 2011—Kerry Logistics and Canon will review the system's success in capturing and storing useful data about the shipments, and then plan the next phase of RFID implementation.

Assuming Phase 1 of the pilot is judged to be a success, Lee says, the two companies expect to launch Phase 2 by mid-2011. For the second phase, the items' packaging would again be tagged, and drivers would employ handheld readers at the stores, where pallets loaded with products are delivered, for proof of delivery. Currently, drivers must disassemble each pallet, open every carton and scan the bar-code number on each item's packaging to ensure the order is correct, and then leave the shipment for store employees to go through at another time. A typical pallet carries 20 cartons, which means the bar-code numbers of approximately 140 individual items must be scanned per pallet.

As cartons are loaded onto a pallet, the products' RFID tags are automatically read in order to verify the order is being filled accurately, and to provide a record of what is being shipped.

With the use of the RFID system, the driver will unload the cartons from the truck, use a handheld interrogator to read the ID numbers on all products packed within those cartons, and thus gain a list of every item delivered. He or she could also then print a manifest using a handheld reader, a Wi-Fi connection and a laptop computer, and present it to the store prior to leaving the facility—though, initially, that would not be part of the Phase 2 deployment. Once retailers trust this new, more automated system, Lee speculates, they will feel less of a need to require their staff to count the items themselves in order to verify delivery accuracy. The length of Phase 2 has yet to be decided.

Phase 3 would involve the use of RFID tags on warranty cards—a plan still under discussion with Canon. If the third phase were to be deployed, staff members would attach RFID tags to each warranty card, containing an ID number corresponding with the product's serial number. RFID tags would not be attached to the packaging in that case, but only to the warranty cards.

When a customer purchases an item, the retailer would use a handheld or desktop interrogator to read the tag of that product's warranty card and initiate the warranty-registration process. The tag could also be used if a product needed to be returned or serviced. In such a case, the card would be returned with the item and be read by an RFID reader at a Canon dealer or retailer (if that site is equipped with an interrogator), in order to confirm the item has been returned. The RFID-enabled warranty card would make warranty registration and processing easier in the store, according to the companies, and could also ensure the identification of counterfeit products, since a counterfeit item's warranty card would presumably lack an RFID tag. For Canon, the benefit would be in gaining faster access to sales and warranty data (since warranty-related processes could be accomplished via an RFID reader at the store), as well as in the identification of customers in the event of product recalls.

"I would say, for Phase 1, the benefits of using RFID are not going to be so significant," Lee states. "Our accuracy is already good. We have high-quality workers in Hong Kong, but we needed to do something to give the staff the experience of working with RFID. If we install Phase 2, this will speed the delivery process and save our drivers a lot of time." He expects drivers to be able to deliver 30 percent more product each day thanks to the RFID system.