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Finland Post Finds RFID Can Deliver ROI
After completing a two-month RFID trial, the national mail carrier believes there is a clear business case for using tags to track reusable assets such as roll cages and crates.
Mar 19, 2006—Each year, Finland's national mail carrier, Finland Post, delivers 2.6 billion packages and letters. This past summer, eager to see the potential of UHF RFID tagging in its operations, the carrier tagged 200 of the 200,000 roll cages it uses to store and transport those packages and letters. By RFID-tagging these reusable assets, the company hoped to increase its visibility into their use and location. This, the company's staff believed, could help increase availability and utilization of the assets, as well as help reduce roll cage shrinkage.
Approximately 6 feet tall and 20 inches wide, the roll cages are constructed of steel wire and fitted with four rubber wheels. Each year, the carrier loses around 17,000 such cages, costing it around 1.3 million euros ($1.6 million) to replace. What's more, because of the high loss rate, the carrier does not always have enough roll cages available. This adds to its operational costs and reduces the quality of the services it provides since it cannot offer customers the roll cages they need.
"Plenty of printing-house customers require many roll cages in advance, so they can fill them," says Heljä Salomaa, Finland Post's logistics director, who oversaw the RFID trial.
Finland Post has a clause in its contracts specifying that within two weeks after it drops off empty roll cages at a customer's site, that customer must load up the roll cages and have the carrier retrieve them. However, before the RFID trial began, the carrier had no way of knowing where its roll cages were at any given time, or how long a customer may have had them.
With RFID tags attached to each roll cage, Finland Post believed it might be better able to track its assets. It also hoped that using the information collected by RFID in its operations would provide customers and partner carriers with increasingly detailed and proactive information on the status of their shipments.
For the eight-week-long RFID trial, Finland Post turned to systems integrator Cap Gemini to design and manage a trial project that would test RFID's ability to provide reliable asset-tracking. Cap Gemini was also charged with ensuring that the RFID data could be integrated with Finland Post's existing SAP enterprise resource planning (ERP) system. "At Post's request, the pilot was done in an environment separate from Post's ERP system," says Juhana Juppo, chief technology officer at Capgemini Finland. "However, the architecture matched the one in production use."
Cap Gemini selected and worked with a number of companies supplying hardware and software for the project. The 200 roll cages were fitted with specially made passive 856 MHz UHF tags encapsulated in plastic. This was done to prevent physical damage to the tags' antennas. Cap Gemini designed the tags to operate in RF-challenging environments, such as high humidity or around metal, where RF signals can be distorted or weakened. The tags are made with Philips Semiconductors' U-Code HSL chips.
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