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LEGO Puts the RFID Pieces Together

By integrating RFID into its current shipping operations, the company not only is able to comply with mandates from Target and Wal-Mart, it is also saving money and labor compared with a standalone tagging system.
By Mary Catherine O'Connor
At the Enfield facility, LEGO uses a warehouse management system (WMS) from Manhattan Associates, an Atlanta-based supply chain services and software firm. The WMS platform LEGO uses, called PkMS, guides the Enfield workers through each step of the shipping and receiving processes.

Manhattan Associates offers RFID integration services and software to upgrade its WMS software so that it, with the help of middleware, can generate electronic product codes (EPCs) and associate them with the Global Trade Identification Numbers (GTINs) assigned to each case and pallet. Manhattan Associates and other WMS providers are selling RFID integration software and services to help make RFID tagging an integral part of their customers' shipping and receiving processes. Given this, it would have been a natural fit for LEGO to use Manhattan Associate's EPC software and RFID upgrades. However, doing so would have also required LEGO to purchase a system upgrade for its PkMS, which it did not have the budget to do.

LEGO's Patrick McGrath and Gary Deets.

Therefore, McGrath and Deets looked for a system that would run in parallel with the PkMS platform. After talking to a number of RFID specialists, LEGO partnered with Marlton, N.J., RFID middleware and systems integration services provider Acsis, which makes an RFID middleware called Data-Link Enterprise.

"The benefit of that is, if we decide to switch out PkMS to a newer version or a different vendor, we won't need to mess with the Acsis side," says Deets. "So by replacing parts of our application portfolio, we don't have to change what we're doing on the RFID side. And if we wanted to globalize [deploy this tagging system in other LEGO facilities around the world] what we've done here, it's easy." LEGO Systems is headquartered in Billund, Denmark. None of its European DCs use the PkMS software, so had Enfield gone with an approach tightly integrated with PkMS, the solution would not have been easily transferred overseas.

Acsis devised a system in which it linked the Data-Link middleware with the PkMS software, Zebra Technologies R110Xi RFID printer-encoders, the SAP enterprise resource planning (ERP) system LEGO uses, and the FKI Logistex BOSS conveyor operating system that controls the bar code scanners mounted on LEGO's conveyor system.

LEGO began applying tags to cases and pallets bound for RFID-enabled Wal-Mart DCs in October 2005, following suit last month for Target. Both Target and Wal-Mart order products from LEGO on an automatic replenishment basis: What sells one week gets ordered the next. The retailers send these orders through an electronic data interchange (EDI), a standardized system for exchanging invoices, bills and purchase orders.

LEGO's ERP system receives these orders, verifies there is adequate inventory to fulfill them and passes them to PkMS, which runs the Enfield DC's shipping and receiving processes. After receiving an order, the ERP compares it with a list of two ship-to addresses in Texas: Wal-Mart's DC in Sanger, and Target's DC in Tyler. If the order is headed to either location, the ERP flags it before sending it along to PkMS for processing.

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