Nov 27, 2007This article was originally published by RFID Update.
November 27, 2007—Imperial Sugar is changing its pallets from traditional wood to RFID-tagged plastic, but improved traceability from RFID is not the main motivation for the switch. The environmental, hygienic, and quality benefits of plastic pallets were enough to prompt change at Imperial Sugar, even though its new RFID-tagged pallets from iGPS will be read at multiple Imperial refineries, warehouses, and customer sites.
"The decision was driven more by poor pallet quality. Wooden pallets break, and when they do they can puncture our packaging, so sugar spills and we lose product," Greig DeBow of Imperial Sugar told RFID Update. "Plus, about 40 percent of the trees chopped down in this country are made into wooden pallets. Sustainability was a huge piece of our decision. RFID was really just a bonus."
Nevertheless, Imperial Sugar is becoming a leading RFID user and one of the largest customers in the iGPS pallet pool. iGPS is a startup pallet pooling company that only offers RFID-tagged plastic pallets (see Xterprise Makes Multimillion RFID Tag Purchase for more background about the iGPS RFID pallet pool and technology).
Pallet pooling companies lease pallets to customers, making sure there are adequate quantities available throughout the supply chain. Customers don't have to purchase and maintain pallets, or manage their return from customers. For a food product company like Imperial Sugar, cross contamination is a concern because pallets are shared among multiple users. Without some form of traceability, there is no way of knowing whether a pallet carrying sugar was used the day before to carry meat or another perishable product with a high bacteria count. Imperial Sugar's contract with iGPS prevents the use of pallets that carried goods with high cross-contamination potential, according to DeBow.
Even though iGPS pallets cost an estimated four times more than traditional wooden ones, the company believes it can compete against more established wooden pallet pool providers because plastic will result in much lower maintenance and replacement costs, and RFID tracking will provide superior asset utilization.
DeBow said Imperial Sugar has installed portal readers at both of its refineries and plans to have all three of its warehouses RFID enabled soon. iGPS uses the RFID data to track pallet locations and plan its operations, while Imperial Sugar is still developing plans to use its RFID information.
"RFID is still so new to us," DeBow said. "We're still evolving on a daily basis as to how we can use the data we're gathering."
Several Imperial Sugar customers have also installed RFID readers, so iGPS can track pallets to their final destination and arrange pickup. Participating customers need to agree to read the iGPS pallets and segregate them from others for pickup. Despite the extra effort, customers have been very enthusiastic about participating, according to DeBow, noting large companies including Wal-Mart and HEB have been very supportive.
"In this day and age of reduction and simplification of the supply chain, the fact that our customers are willing to manage another pallet speaks volumes of what they think about the long-term value," said DeBow. "When you consider sustainability, plus the food safety and traceability aspects of these pallets, it's as much of a can't-miss proposal as I've ever seen."
iGPS was started by the former CEO of CHEP, which is the largest pallet pooling company. iGPS is using RFID as a competitive differentiator, but CHEP also offers RFID pallets and services (see Milestone Australian RFID Pilot Heralded a Success for details about a recent project).
Read the announcement from Imperial Sugar
