- The global engine and power supply company is reducing its waste by employing RFID-based, trackable reusable plastic containers for components and products
- The system is live at its U.S. sites while the company also invested in providing the technology for its suppliers.
Power generation and engines company Cummins is striving to meet its Planet 2050 environmental sustainability strategy that includes reducing the total amount of packaging waste resulting from manufacturing operations. The company’s own research found that about 75 percent of its inbound materials, and goods travelling from or between manufacturing facilities, used expendable packaging.
“We wanted to stop that,” said Todd Farwell, Cummins’ global packaging director, by launching a returnable packaging initiative. To track the Returnable Transport Items (RTIs), it has deployed an RFID solution from Surgere.
With RFID tags on each plastic tote, as well as overhead readers at dock doors, Surgere’s cloud-based, Interius software can track the assets as they move between suppliers, and Cummins’ own manufacturing sites, explained Michael Schwabe, Surgere’s market intelligence director.
Tracking Reusable Totes
Cummins, headquartered in Columbus, Ind., makes its wide variety of power generation products across multiple business sectors including automotive engines and generators for commercial or industrial use. For the initial returnable assets initiative, the focus was on the Columbus Engine Plant where Dodge Ram engines are produced.
Since the initiative started last year, tens of thousands of returnable totes and containers are in use, replacing disposable corrugated cardboard and plastics.
Piloting of RFID technology to track the movement of these assets took place at nine facilities in 2023. Now the permanent deployment of RFID readers and software to manage the data is being rolled out across all Cummins’ major U.S. sites, as well as some suppliers.
Preventing Returnable Packaging Loss
One of the company directives, with the launch of returnable packaging, was that no more than five percent of these packaging assets could get lost. So the challenge was how to automatically track those plastic containers and totes as they move around the country to be loaded, transported and then emptied and re-used.
The company considered manual methods or barcode-based tracking of RTIs because they would be time-consuming and prone to error. “We decided that RFID was going to be the choice,” Farwell said. And while the team was concerned about the reliability of RF performance in an environment full of metal racks, they found that the solution provided by Surgere worked with an accuracy of about 99 percent. Surgere typically works with its clients to continue to improve accuracy as the technology is used.
The solution consists of RF Controls overhead readers mounted 15 feet above dock doors in such a way that they are out of range of forklifts. They are installed not only at Cummins’ own sites, but at the dock doors of some of its largest suppliers.
Two passive UHF RFID tags are applied to each plastic tote, which come in multiple sizes. Those totes or containers coming from Orbis are already tagged as they are received, while Cummins provides tags to the other reusable packaging as it is received. So far, Cummins has tagged over 360,000 pieces of packaging.
How it Works
Each time a supplier fills a reusable container, they ship it to a Cummins facility, and with a reader mounted at the site, the tag is read as the container leaves the supplier’s facility. Cummins then has access to that data indicating what filled containers are on their way. When they are received the destination facility, the tags are read again, updating the status of each container.
Once containers are emptied, they can be shipped to one of the company’s container management centers (CMC’s) where they are cleaned, maintained or repaired, and made available for reuse. The RFID tags are read at these sites when they arrive and leave on their way to a supplier to be reused.
If a container goes missing or is delayed at one location, the system software can identify that event. In that way, Cummins management can determine who was the last party to have custody of the asset, or where the asset is being delayed.
Bringing Suppliers Onboard
Early into the project deployment, Cummins made a strategic decision to provide the technology, at no cost, to its suppliers. Farwell pointed out that the use of RFID by those suppliers would be critical to gaining the supply chain visibility the company needed, but it needed to be seamless for the supplier to adopt.
“We consciously made the decision not to put the supplier in the position of funding and deploying the technology themselves,” he said.
In some cases, Cummins installs fixed readers at supplier sites, while in other cases it provides handheld readers. In both cases, the tag reads are immediately forwarded to the Interius software which can be accessed by Cummins as well as its supplier.
Unique Project
This is a unique approach on the part of Cummins, commented Schwabe at Surgere. The technology company finds that many of its customers who are deploying RFID technology request that their suppliers opt in to the technology-use as well. But rarely do they share or absorb the cost of that deployment, said Schwabe.
“Cummins made the commitment to this sustainable program by paying for their suppliers involvement as well. So they’re committed to really scale it out” in a way that brings a view into every location where the assets go during their lifecycle, said Schwabe.
For example, as the asset arrives at the supplier site, empty and ready to be loaded, “we’ve got automatic receipts of that empty packaging at that supplier we know how long that sits there we know when it comes back to us, we know how efficient our entire package packaging network is,” Farwell said.
High Volume Tracking
The RFID readers track movements both into and out of facilities and can read tags at a rate of hundreds of thousands per day within a single facility.
Surgere’s algorithms, machine learning and AI components run on the Interius software to process data transactionally as it’s occurring throughout Cummins’ supply chain. The software not only provides information about where assets are, but analytics to better understand the flow through logistics.
Additionally, Surgere can provide the tag specifications and application requirements and operational details—of its own tested and verified tags—to RTI providers, so that if more companies making the totes opt to attach RFID to their products, they can. In the meantime, eventually some of Cummins’ suppliers may use the RFID data captured at their sites, internally, to benefit their own operations, Schwabe noted. Many companies need to witness the value of the technology before choosing to leverage the data it can provide.
“Some of that is a re-education of what RFID has evolved to in the last decade,” he said, since the RFID systems of earlier times were less effective than the current technology.
Another challenge for technology adoption has been an historic mindset for many manufacturers and suppliers has centered around traditional systems from color cards and Post-it notes, and the spreadsheets that list inventory, said Schwabe.
Benefits: Loss Prevention, Accountability
Cummins has seen some immediate gains from the technology since it was deployed, according to Farwell. For one thing, the company’s assets have had a lower rate of damage, and they “can assign responsibility for damage since we know who last touched it,” he noted.
Additionally, RFID is providing a labor savings, by eliminating the need for barcode scanning or visual identification of each item. Without RFID, Farwell said, workers typically required 20 minutes inbound and outbound to scan in each container—a process which now (with RFID) takes two seconds.
“Pretty much every operational metric can be improved by deploying this system,” Farwell said, “[Use of RTI’s] would be untenable without it.” In fact, he speculated, “Without RFID you probably have to have four times the staff to manage it all to make sure it’s all flowing, make phone calls and take inventories.” Now those efforts are unnecessary.
Tracking the Goods Being Transported
Already, with the analytics provided by the software, Cummins has been able to optimize the fleet sizes based on packaging shipments, and identify where the bottlenecks are, and how long it takes assets to get from supplier to a Cummins facility, or supplier to logistics facility. Cummins is continuing to roll out the solution in North America to include Mexico and will also expand to Europe.
As far as meeting sustainability efforts, the use of the RTI’s is expected to eliminate 84 million pounds of corrugated material, wood and plastic waste annually.
In the long term, by tracking the returnable assets, Cummins now has the capacity to gain visibility into the goods being transported in those assets. That will be the next phase of the deployment.
“Packaging is the one ubiquitous thing in all of the supply chain—it is constantly there—you don’t ship without packaging, so if you know where your packaging is, you know your material,” said Farwell.