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RFID Saves Auto Parts Factory Money on Raw Materials

Thanks to improved production and inventory-management processes, Brazil's R2A has optimized its entire end-to-end supply chain.
By Edson Perin
Jan 06, 2020

By deploying a radio frequency identification system provided by iTag, Brazilian automotive parts manufacturer R2A reports that it has achieved high gains in its operations. Acting as a supplier of bumpers for various models and colors of cars manufactured in that country, the company says it achieved a 6 percent savings in raw materials due to better production planning.

Other benefits of the company's use of RFID include increased inventory visibility; better identification of production batches due to unique ID codes provided by RFID tags; greater speed in locating products in stock; 100 percent accuracy in order picking and truck shipping processes; a 95 percent reduction in delivery errors, providing a savings of 85,000 Brazilian real ($20,750) per year; and real-time inventory updates.

R2A's factory in Brazil
The project was born out of three needs that the company had in its production line. The first was to confirm that what was being manufactured actually underwent its entire manufacturing process. The second was to ensure that all products invoiced to an end customer had actually been shipped on the truck. And the third was to highlight the EAN13 numbers on invoices for large companies that buy its products. The company called on several technology providers to come up with ideas to address these challenges. After reviewing all of the proposals it received, R2A concluded that RFID tags could improve its processes and also generate supply chain savings by eliminating manual steps and ensuring a realistic view of its inventory.

The implementation was performed in two parts. In December 2018, all products in stock were tagged with iTag model 7×2 RFID tags, containing Impinj Monza R6 chips. The integration was done by file, bringing all ERP inventory data to iTag iPrint software, which completed the product conversion to GS1's EPC Gen2 standardization, with newly acquired GTIN registration.

In total, 200,000 items were tagged via this process, making the inventory for large companies ready to be checked and invoiced during the second stage of deployment. According to Bruno Izídio, R2A's quality manager, "While it is a huge job moving items to a tagging area and then storing again, we would rather think of a way to leverage this work by organizing our inventory. Thus, the impact of the operation in this first stage was absorbed by the organization's benefits."

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