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Dow Reveals a Chemical Attraction to RFID
The manufacturer of plastics, solvents and other products is harnessing RFID's power to deliver value to its business and customers.
May 01, 2006—For years, Dow Chemical Co. has seen the potential for radio frequency identification and related auto-ID technologies to improve significantly the way it and other chemical companies do business. Now that potential is close to being realized, as Dow embarks on a multifaceted strategy to use RFID in a number of areas to improve processes and increase supply chain efficiency.
The Midland, Mich., company is a diversified manufacturer offering a broad range of chemical, plastic and agricultural products and services to customers in more than 175 countries. Dow employs 42,000 people worldwide, with sales in 2005 totaling $46 billion. Dow's products are used in such sectors as food, transportation, health and medicine, personal and home care, and building and construction.
The company's supply chain is large and complex, consisting of some 2 million product shipments each year, about 60 percent of which are sent to sites in North America. Products are shipped by truck, rail, ship and other modes of transportation, with 20 percent of Dow's shipments involving international border crossings.
RFID is not a new technology to Dow. For more than a decade, the company has used it for such applications as controlling employee and contractor access to facilities via badges equipped with RFID tags. In 2005, however, the manufacturer launched a broad strategy to integrate RFID and global positioning system (GPS) technologies in key areas designed to deliver maximum value to the business and to its customers. These include container and product tracking, maintenance, asset management, manufacturing process optimization, logistics and transportation, and product inventory and warehouse management.
"We decided that it was the right time to aggressively look at RFID technology to support our corporate vision," says Paula Tolliver, Dow's global managing director of RFID strategies.
To that end, the company created a team charged with developing a strategy for deploying RFID and GPS, and for making recommendations to senior executives. The team has the support of the highest level of management in the company, says Craig Casto, global auto-ID and label technology leader in Dow's supply chain material-handling technology center, which oversees the company's use of bar coding, RFID and GPS technologies.
A critical aspect of the strategy was making sure the RFID initiatives were driven by what's important to Dow, its customers and, ultimately, the chemicals industry, Tolliver says. "The difficulty with these technologies is you can think of a lot of creative uses for them; the real key is to focus on those that will create the most value for your company," she says. "We have driven our RFID opportunity prioritization by value creation and enhanced safety and security of our supply chain."
According to Tolliver, there was a "huge demand" growing within the company for RFID implementation. "We wanted to centralize the process of evaluating the technologies and making sure we maximized our time and resources in the right places," she says.
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