Jan 09, 2006At the start of this year, another 200 Wal-Mart suppliers were expected to start RFID-tagging cartons and pallets of their products set for delivery to the retailer's RFID-enabled distribution centers in Texas. One logistics provider—food industry warehousing and distribution services company Atlas Cold Storage—is providing the tagging as part of its service to one of those suppliers.
Atlas believes its customers' RFID adoption has created a new area where it can provide services. For more than eight weeks, the company has been testing a new system to tag shipments for one of its largest ice cream manufacturer clients in order to meet Wal-Mart's tagging mandates.
To that end, Atlas turned to Ship2Save, a Montreal-based RFID services company. Ship2Save provided a manual RFID tagging system using a single Psion Teklogix 7535 handheld computer with an AWID RFID interrogator (reader) added, a Printronix RFID tag printer-encoder, tag number management and database software and a PC. The services company developed the system, which uses Alien Technology's 96-bit EPC Gen 1 Class 1 tags.
Cases of product destined for Wal-Mart's RFID-enabled DCs are brought on a pallet to Atlas' RFID station in Sikeston, Mo., where they are tagged manually and either returned to the storage freezer or shipped immediately. "We can have the pallet load tagged and back in the freezer or on a truck without impacting the quality of the product," says Sheldon Gumbley, senior business analyst at Atlas Cold Storage. Atlas' customer tells the logistics provider which shipments require tagging, and the process takes place at a single Atlas facility, close to the receiving Wal-Mart DCs.
According to Atlas, the ice cream maker believes it makes a great deal of sense to outsource the tagging instead of doing it in-house. "They manufacture millions of cases of product," says Gumbley, "but only about half a percent of those need tagging for Wal-Mart, and they didn't want to invest in [their own] RFID technology trial." That fitted with Atlas' own ambitions to understand and use RFID in its business. "We are a service provider, and in the long term, RFID is here to stay, so we see it as a value-added service we can offer our customers," says Gumbley.
In mid-November, Atlas began testing the system by sending tagged shipments to Wal-Mart, and on Jan. 2, 2006, the company began to use it on a regular basis. The only issue left to be resolved with the implementation, Atlas and Ship2Save claim, is to develop a better epoxy glue to hold the tags to the cartons and pallets.
At present, the operation is a small slap-and-ship implementation, with Atlas' customer telling the logistics provider which shipments need to be tagged. Atlas then writes the required Electronic Product Code onto each tag and verifies that it's is working before shipment.
Atlas is currently working with another customer on a RFID implementation in the Midwest. The logistics provider believes there will be increasing demand for its RFID service, and that as customers move to carry out their own RFID tagging before shipping to Atlas, its experience with RFID will quickly help it add additional RFID infrastructure—such as a portal at a loading door—to take advantage of those tags on shipments entering its facilities. Thus, it will reportedly be able to reduce labor costs and increase efficiency in its own operations.
"RFID can help reduce our labor costs," says Gumbley. "There are bar code labels attached to every pallet and case in our warehouse, and they have to be physically scanned. With RFID, we'll just ship out the door [and get the same visibility]."
