May 20, 2009This article was originally published by RFID Update.
May 20, 2009—Empty kegs make beer drinkers sad, but missing kegs pose a bigger problem for brewers. Distributors are often slow to return empty kegs, so most brewers carry extensive safety stock to ensure they'll have enough empties available to fill orders. With new kegs costing about $150, safety stock adds a lot of expense to operations. To trim this expense, New Belgium Brewing, a craft brewer in Fort Collins, Colorado, is set to begin tracking its kegs with passive UHF RFID tags and asset tracking software from Fluensee.
New Belgium Brewing produces about 500,000 barrels of beer annually and is best known for its Fat Tire brand. It is implementing Fluensee's AssetTrack software and Gen2-standard RFID tags from Confidex to identify kegs when they are received back from distributors, at the cleaning station, as they enter and exit filling lines, when they are placed in cold storage and when they are loaded onto distributors' trucks. New Belgium hopes to extend the system to track kegs at distributor facilities and eventually to retailers, which could lead to faster returns and reduced safety stock.
"There's a tremendous amount of value in improving fill rates for beer kegs, which may only be returned and filled four times in a year," Fluensee president and CEO Tim Harvie told RFID Update. "It has been very difficult for brewers and other owners of high-value returnable assets to track control of their assets over time. The only way they can reduce the amount of kegs they need is to improve visibility."
New Belgium Brewing follows Six Sigma practices for process improvement and concluded that RFID could improve its internal efficiency. It is not disclosing its ROI calculations, but Fluensee's Harvie said similar projects typically provide full return on investment within 12 months. "New Belgium is our first customer that looked at ROI in terms of Six Sigma," Harvie said.
"Using Fluensee's AssetTrack solution and RFID technology helps us automate our keg management process so that we know where our kegs are, how frequently they're being used and how quickly they are being returned. Our vision is that RFID will streamline keg movement to our customer sites and throughout our supply chain," New Belgium Brewing's packaging materials purchaser Brendan Beers said in Fluensee's announcement.
New Belgium Brewing previously tracked its kegs with bar codes, but its systems did not associate kegs with specific shipments, provide fill rates or other detailed data. The new system encodes a unique serial number on each tag, and all associated information is held in the system software. Tags are placed on a bracket that is applied to the bottom inside lip of the keg. Applying tags to the bracket, not directly to the keg itself, has helped produce read rates greater than 99 percent, according to Harvie.
New Belgium Brewing is the first customer Fluensee announced since it acquired certain assets of TrenStar Tracking Solutions last year (see Fluensee Acquires TrenStar's RFID Software Business). Fluensee had competed against TrenStar in the keg and other returnable asset tracking markets. Both companies were known for offering software-as-a-service (SaaS). Harvie said New Belgium Brewing opted for a traditional software licensing agreement but may convert to SaaS as it expands its RFID program.