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Manufacturer Blends Kanban with RFID to Get Quick ROI

Adding RFID to its kanban cards used to track materials and production enabled German fittings manufacturer Hansgrohe to reduce data entry labor requirements by one hour per worker per day. The RFID process complements the company's existing bar code and ERP systems.
Jan 07, 2009This article was originally published by RFID Update.

January 7, 2009—Hansgrohe, a €661 million ($899 million) manufacturer of bathroom and kitchen fittings in Germany, has saved one hour of labor per user per day by enhancing its bar-coded production tracking paperwork with RFID. The company applied RFID inlays to its bar-coded kanban cards, which are used to track production status and materials used. Cards are read in batch by an RFID reader, which has eliminated the need for workers to manually scan the bar code on each card.

Hansgrohe processes components at a factory in Schiltach, Germany then ships them to a facility in Offenburg for final production into faucets and other fittings. The components needed for a finished product are packed into a shipping container along with a kanban card that lists the included materials. The kanban cards are checked throughout the production and distribution processes, sometimes scanned with bar code readers, and recorded with an RFID read when they leave the Schiltach facility.

When assembly is complete, workers pull the card for entry into Hansgrohe's enterprise resource planning system, which deducts the materials used from inventory. Production data used to be entered into the ERP system by bar code scanning, but is now accomplished by passing the cards before a UHF reader.

"This project is an example of one of the easiest ways companies can get ROI from an RFID system," Mikko Nikkanen told RFID Update. Nikkanen is business development director for UPM Raflatac, whose passive UHF inlays are used on the kanban cards. noFilis provided software and integration services. "Hansgrohe didn't want to change all its bar code processes. It was very easy for them to add RFID because they already had an automated infrastructure. The cost is really nothing compared to the extra benefits they are receiving."

The system provides accurate materials and inventory records and has reduced the time required for inbound inspections, in addition to the data entry labor savings.

Hansgrohe won't provide specific cost savings or process improvement data, but Nikkanen suggested that return on investment was achieved in less than a year. He thinks many other manufacturers have similar opportunities to achieve rapid payback from using RFID with their existing systems, particularly in the automotive, electronics and other industries where kanban systems are commonly used.

"In these hard economic times, these are the kinds of projects that can get approved," Nikkanen said. "Companies are still looking for the most cost-effective processes. The ROI for this type of project is typically less than 12 months, which is what finance directors need today."
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