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Sony Europe Finds ROI with RFID Deployment

Sony Europe has gone live with an RFID system that combines real-time tracking and closed-circuit video surveillance at its Tilburg distribution facility in the Netherlands. Sony expects to achieve a return on investment in less than a year by increasing shipment accuracy, reducing shrink, and improving customer reconciliation.
Mar 22, 2007This article was originally published by RFID Update.

March 22, 2007—Sony Europe is using a combination of RFID and closed-circuit video surveillance to improve efficiency and reduce shrinkage at one of its distribution centers. Sony is using the system, which began as a pilot last year, for item-level tracking of consumer electronics throughout its Tilburg warehouse in the Netherlands, and expects to see a return on investment (ROI) in less than a year.

Amsterdam-based Mieloo & Alexander is acting as systems integrator on the project, which includes EPCglobal Class 1 Gen2 tags from Raflatac, Symbol Technologies XR480 RFID interrogators from Motorola, IP video surveillance software from Griffid, the Tag Acquisition Processor (TAP) from Reva Systems, and RM6+ RFID printers from Zebra Technologies.

Sony tags products for shipment and records the tag IDs at each stage of the shipping process. An automated video system monitors the packages, burns RFID data onto the video image, and indexes the MPEG4 video stream according to the RFID information. The tag-read data and video images are used to verify shipment and provide electronic proof-of-delivery.

The tags are attached to the cardboard packaging for each item, and read as workers pick orders for Sony Europe's retail customers. The items are separated by customer and stacked on an RFID-tagged pallet, and then carried by a forklift through an RFID reader portal. The tags are read again during the shrink-wrap process, and as they move through the dock door onto the trucks.

Right now, Sony is tagging consumer electronics items like televisions and digital cameras destined for customers in Germany.

The combination of item-level tracking and the video images can reduce theft and loss, and help Sony reconcile shipment information with its customers. If an item is lost or damaged in-transit, Sony has a visual record (indexed by serial number) of the condition of the goods when they left the warehouse.

"Sony's claims handlers now have a visual and data-based proof of delivery," said Sander Merkx, founding partner at Mieloo & Alexander. "They also benefit from faster shipping processes and the reduced handling effort."

"These are expensive shipments," says Ashley Stephenson, chairman and co-founder of Reva. "Not only can Sony reduce damage and shrinkage because of the tracking process, the system helps validate the correct composition of every pallet, and which truck it was placed on. You can immediately access the video that refers to each product."

The facility operates under European "listen-before-talk" (LBT) regulations, which require readers to check for the presence of other reader signals before broadcasting their own. This presented a challenge to Sony, given the dense reader environment and the narrow frequency band allocation for ultrahigh frequency (UHF) RFID in Europe. The facility is using more than a dozen RFID interrogators, which may simultaneously read several hundred tagged items in close proximity.

Reva's TAP system determines tagged boxes and ascribes them to the correct pallets. The tag information and the item's location are forwarded to the video server and Sony's SAP system and data warehouse.

"The listen-before-talk issue added to the complexity of the project," Merkx said. "As we switched on more readers, we could see the impact on system performance. Then Reva came in, and their system has synchronized the readers across the entire facility."

"TAP controls all RFID activity in the facility," said Stephenson. "We are able to intelligently schedule and coordinate the operation of the readers, so that when a reader needs to read a tag, it can get an available read slot."

Last year, Reva and Impinj successfully demonstrated the TAP system at a METRO Group distribution center in Germany, achieving 98-99% read rates as multiple pallets loaded with dozens of tagged goods were simultaneously passed through 36 adjacent dock doors (see European RFID Test Sees Near-Perfect Read Rates).

Mieloo & Alexander managed the process design and equipment installation, and wrote the workflow code that runs on the TAP's embedded Java environment. These workflows tie together different parts of the picking and shipping processes by prompting and accepting operator input, as well as giving visual and auditory signals to the operator.

Sony has been testing RFID in Europe since 2004 together with Mieloo & Alexander, and may expand the current system to other facilities in the future.
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