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Automotive Manufacturer Tracks Incoming Inventory

Continental Automotive uses an Xterprise RFID system on a Microsoft BizTalk platform to track incoming electronic parts in reusable totes as they pass from third-party logistics providers to the manufacturer.
By Claire Swedberg
Oct 24, 2008Continental Automotive has deployed an RFID system to track its incoming inventory at its 800,000-square-foot manufacturing facility in Huntsville, Al. The global automotive components maker is using radio frequency identification to track reusable containers that pass between the factory's three third-party logistics providers and its manufacturing facility, where parts are received and assembled into interior and power-train components, which are then shipped to automotive companies.

The system, built on a Microsoft BizTalk Server 2006 R2 platform and SQL server, employs Xterprise Technology's Clarity Automated Goods Receipts (AGR), which manages data regarding inbound raw materials, and Clarity Reusable Transport Items (RTI) software, for tracking reusable totes.

Gokhan Sarpkaya
Continental receives more than 5,000 types of electronic automotive parts, such as transmission controllers, air bag controllers, GPS units, car stereo components and other electrical devices from 158 suppliers, about 80 percent of which are located offshore. Those materials are first received by one of the three third-party logistics service suppliers (J.I.T. Services, Multitronics VMI or Span) located within a few miles of the facility. There, the items are unpacked and loaded into reusable plastic containers. These containers are transported to the Continental facility—in some cases, on reusable plastic pallets—where they are then unloaded from trucks and brought into the building by forklift.

Prior to deploying the RFID system, Continental Automotive personnel would scan bar-coded labels on the containers as the items were received. In addition, says the company's logistics project manager, Gokhan Sarpkaya, the logistics service providers sent advance shipping notices that were processed manually by Continental's staff. This process sometimes resulted in advance shipping notices being recorded late.

Therefore, the company sought an automated goods receipt system that would enable it to reduce inventory inaccuracies caused by late advance shipping notices and human error, decrease the long processing time created by scanning each container's bar-coded label, and allow management to track the 80,000 reusable containers, which have a combined value of approximately $3 million.

The RFID solution has reduced shrinkage and container stockpiling, which had led to excess totes at some sites, and shortages at others. With each RFID read, Continental can track the locations of the containers and the products within them. The new system is expected to increase processing speed by 70 percent, by reducing the time spent reading individual bar codes.

Sarpkaya, who had an interest in RFID and had received Computing Technology Industry Association (CompTIA) RFID certification, began searching for an RFID solution in early 2006. His company started researching 30 RFID systems integrators, reduced the number to five, then selected Xterprise, which had experience with reusable pallets when it provided RFID software and systems integration to iGPS (see iGPS Rolls Out RFID-Enabled Plastic Pallets), and which offered an RFID system using Microsoft BizTalk Server, something Continental's corporate IT department sought. BizTalk Server integrates several business workflows required in the receiving, quality-assurance and put-away processes, says Enrique Andaluz, Microsoft's industry market development manager, and also enables real-time messaging across business processes, eliminates errors and reduces manual intervention.

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