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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

The second stage of implementation began when the RFID label-printing process for the bumper production sector and the control of production order finalization via RFID counting were launched. "We had a very big evolution in control because we were able to pinpoint exactly what we had finished and what was pending production," Izídio explains. "As a result, we were able to generate savings of 6 percent [on raw materials], since we did not have to produce products that we already had in excess in the production and inventory areas."

Thanks to this process, the company has been able to amortize investments in labels and hardware. "We started the process with two people per machine, totaling eight in our production area," Izídio says. "After two months of the RFID-stabilized process, we have relocated and trained two people from this sector to other areas within the group. "

R2A's Bruno Izídio
At this same stage, R2A evolved the project to divide the company's areas, placing grids so that no movement of goods occurs without those items passing through the RFID portal. "With this process," Izídio states, "we separate production from inventory, inventory from dispatch, and shipping from shipping, and we place an RFID portal in each area so that, with the pallet placed on each portal, the system will generate appropriate reports regarding product movements."

After the portals were installed, the company explains, it was time to deploy the iTag Alert 2.0 application, with customizations and integrations to the ERP software to enable the firm to have information about returns for the purpose of decision making. "We saw the opportunity to improve stock balance reporting in each industry in real time," Izídio recalls, "knowing what we had in stock (that was a big gain), what we had in the shipping industry being checked (which ensured that we didn't produce anything unplanned) and what was being shipped on the trucks (with a reduction of reverse shipments by almost 95 percent)."

There was also an unexpected improvement in the picking process, Izídio reports. "When we tag the product and turn on the RFID data collector," he says, "a 'hot and cold' bar gets bigger the closer we get to the products we want, which speeds up searching and increases picking speed." The RFID technology also allowed fortnightly inventory counting—a process that brought positive results because inventory is now always up to date.

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