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Lithuanian Manufacturer Tracks IKEA-bound Furniture

SC Freda is attaching EPC Gen 2 tags to each item it makes, and monitoring the status of its products as they move into storage and onto trucks, thereby improving efficiency in warehouse management, shipping and production.
By Claire Swedberg
Nov 03, 2010SC Freda, one of Lithuania's largest furniture manufacturers, produces wood furniture such as tables, dressers and cabinets for living rooms and bedrooms. For the past three years, the firm has sold its products exclusively to IKEA, to be sold in the retailer's stores worldwide. The company ships an average of 10,000 pallets loaded with furniture every month, with 800 items loaded onto a total of 15 to 20 trucks on any given day.

In August 2010, SC Freda began employing radio frequency identification to track furniture destined for IKEA, with the goal of reducing shipping errors and labor costs as workers moved the products into a warehouse and then onto trucks. But beyond warehouse accuracy and labor reduction, the company hoped to achieve benefits in production efficiency as well.

After a piece of furniture is manufactured, a worker attaches an EPC Gen 2 tag to its outer layer of stretch wrap, and the item passes through an RFID portal.

The RFID system, provided by Lithuanian integrator Autepra, also enables the firm's management to track when items are produced and shipped out, and to thereby know when a specific type of product needs to be manufactured. That is a critical benefit, says Virginijus Brundza, SC Freda's production manager, since the warehouse is relatively small, and the company wants to ensure not only that it has sufficient finished products on hand to fill orders, but also that it does not produce excess items that need to be stored on site. The system consists of EPC Gen 2 passive RFID tags (attached to stretch wrap surrounding each item), a reader at the point of tagging those goods, a portal reader at the loading dock, and a forklift with an on-board computer so that the forklift operator, while loading a truck, can view order updates, based on RFID reads. Proringas, which provided SC Freda's existing Pragma enterprise resource planning (ERP) system, contributed software to manage RFID data, and integrated it with the firm's back-end system.

Each piece of furntiture is fitted with a UPM Raflatac EPC Gen 2 RFID tag.
SC Freda manufactures and stores the furniture at its facility in Kaunas, though some of the furniture is sent to an off-site distribution center, also owned by SC Freda. At the manufacturing site, after products are loaded onto pallets and wrapped in plastic stretch film, the items are then transported to a warehouse in the same building, to await pick-up by third-party transportation companies to various IKEA locations, or to SC Freda's off-site DC. Prior to adopting the RFID system, employees had been attaching a green sticker to the plastic wrap of each piece of furniture entering the warehouse. Later, when the furniture was being loaded onto a truck for shipment to IKEA, the workers removed and counted the stickers. In this way, the stickers helped the production department monitor the amount of furniture produced and stored each day, as well as determine what additional furniture needed to be manufactured, and when. Such a manual counting process, however, was time-consuming and prone to human error.

In addition, there was the potential for shipping mistakes, such as the incorrect quantity of products being sent to a particular location. When an error occurs, Brundza says, SC Freda receives an invoice for the cost of reshipping the necessary product. With the new system, he hopes to reduce the number of man-hours spent counting the items produced each day, as well as tracking which goods are loaded onto which trucks. What's more, he hopes to reduce the rate of errors.

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