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Social Security Expects 70% Savings from RFID

The U.S. Social Security Administration (SSA) installed Gen2 RFID technology to support its automated warehouse management system (WMS) at a document distribution facility in Woodlawn, Maryland. SSA expects the RFID to produce labor savings of 70 percent at the facility, which already saved $1 million annually after implementing the bar code-based WMS.
Jan 19, 2007This article was originally published by RFID Update.

January 19, 2007—The U.S. Social Security Administration (SSA) is taking reform into its own hands. The agency expects to reduce some warehouse labor needs 70 percent by using RFID to enhance its legacy bar code-based warehouse management system, which already produces more than $1 million in annual savings.

Intermec announced yesterday the SSA has implemented its RFID technology at an 80,000-square-foot supply building near the agency's headquarters in Woodlawn, Maryland. More than 240,000 different forms, publications, office supplies, and other line items are stored in the facility, which fills more than 42,000 orders from branch offices annually.

"With this upgrade we are expecting to see a 70 percent labor savings in our wall-to-wall inventories," said Social Security Administration Project Manager Gary Orem. "The latest upgrade to RFID technology is a significant part of the SSA's strategy for continuous improvements in automating, securing, and managing the agency's accountable/sensitive assets."

Orem told RFID Update one of the biggest benefits of RFID-enhanced operations is the improved accuracy of outbound shipments. The system saves labor by preventing shipping errors and eliminating the time spent correcting them.

SSA uses an Intermec PM4i printer/encoder to produce a Gen2-compliant RFID smart label for all outgoing cartons. An SSCC-18 number, which is the same format the legacy warehouse management system uses for bar code transactions, is encoded in the Gen2 smart label. RFID readers on the conveyor system capture the SSCC-18 data and route cartons to the correct palletizing station, where they are packaged for orders.

SSA then generates a Gen2 smart label for the pallet that is encoded with the PO number and quantity for the order. The smart label is read automatically by a dock door reader as the pallet is loaded into a delivery truck. The SSA did not previously validate outgoing shipments because scanning bar code labels on cartons and pallets was too labor intensive. The RFID validation system is expected to improve shipping accuracy by five percent.

"Now we get better accuracy and have complete control over what's going out," said Orem. "Our previous process had a few holes, and now we've closed the loop. If someone calls to tell us they didn't get an order, we have to track that down. Now we can say very quickly 'It left dock door XYZ at 10:30 on truck 123.'"

System Concepts integrated the RFID system with the SSA's existing warehouse management system from Radio Beacon. The combined system uses RFID, bar code, and wireless mobile computers to record materials movements, validate transactions, and direct employee tasks.

SSA also uses RFID at receiving to record material receipt. It currently sends smart labels to its suppliers for shipments, but would like to write smart labeling requirements into supplier contracts as they come up for renewal, as the Department of Defense did with its compliance labeling program.

"Now that we have the infrastructure at headquarters for supply chain applications we're looking at using it for receiving non-warehouse items, such as large orders of computers or equipment that we use here," said Orem. "The dream is using the portal reader at receiving to record what's here, and then our staff will deliver it to the person who ordered it and get an electronic signature on the handheld computers we use. That will build the record for our property asset control system, which we'll use to track the asset for its entire lifetime."

SSA previously worked with Intermec on a fleet management application that uses RFID to record employee use of government vehicles. Orem said that system was recently expanded to use RFID tags on key fobs that interact with systems in the vehicles to automatically record mileage, fuel consumption, and engine diagnostic information. In the near future, SSA will concentrate on expanding its supply chain and asset management applications.
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