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Farm Harvests RFID’s Benefits
After deploying an RFID receiving system, Paramount Farms cut its operating costs, improved its relationship with growers and avoided having to invest in expanding its facilities.
Because of the increase in throughput in the receiving, checking and payment process, Paramount was able to cancel plans to build a new scale house it would have needed to meet rising demand for its products. That generated additional savings on capital expenditures, Anzaldo says. And at a time when the seasonal labor pool is getting smaller, the company expects to be able to meet its increased production goals without adding to its workforce.
Data integration and accuracy have improved to the extent that Paramount is more confident than ever of the integrity of its data, Anzaldo says. There are fewer random errors, and more data is gathered and stored because of the RFID technology. The company plans to expand its use of the GRS technology to create a historical record of various processes such as weigh-in, precleaning and sampling.
Another benefit, Anzaldo says, is that Paramount employees are able to make better informed management decisions on the plant floor and during harvest season because information about product deliveries is available in a more timely manner and is easily accessible. Furthermore, Paramount has improved its management of assets such as leased trailers. The company estimates that the system has helped its receiving department reduce trailer usage by 30 percent because the RFID tags enable Paramount to track vehicles and optimize equipment scheduling and the use of resources.
A side benefit is that the new system has been well received by Paramount’s grower partners, who are vital to its business and will be even more important as demand for pistachios increases. Anzaldo says the new receiving process has minimized the number of disagreements between the company and its suppliers (regarding such things as payment amounts and delivery dates and times) during the harvesting and receiving seasons, thereby reducing the amount of time needed for the company to communicate with its suppliers about disputes or other receiving issues.
He says Paramount might consider providing the GRS-generated data in a self-service, Web-enabled format so that grower partners could log on to a Web site and be able to complete transactions and access their account history from their own systems. That would mean even less paperwork for both Paramount and its growers, virtually eliminating the need for exchanging business documents.
While Paramount is pleased with the results it is getting from RFID technology in its receiving application, the company is taking a “wait-and-see” approach before deploying RFID technology more extensively, says Curtis Hudson, Paramount’s CIO and vice president of logistics.
“We’re getting to the point where we’ll have to address this because our customers—and Wal-Mart is one of them—are starting to say they’re getting into RFID,” Hudson says. Before Paramount expands its RFID system, however, the company wants to wait until EPC and other RFID standards are set, and to figure out how it can benefit from further deployment. Hudson says Paramount is not a tier-one supplier to Wal-Mart and therefore does not have to comply with the retailer’s RFID mandate for suppliers to tag pallets by January 2005.
The GRS/RFID implementation at Paramount was not without challenges, Maggioli says. Because the project was so large in scope, it involved multiple parts of Paramount’s operation, including people who work in the scale house, operations managers, people who handle the partner accounts, and other staff.
“We had to work with every group, so we formed seven teams,” one for each major function, Maggioli says. Adding to the complexity, Paramount had to get approval from each of its grower partners to place tags on the trailers. The entire project, MagTech System’s largest to date, took nine months to complete, Maggioli says.
For Paramount, the gains have been well worth the effort.
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