Leal Indústria e Comércio, a manufacturer of personal protective equipment (PPE), says it has reduced its customers’ ordering times by 20 percent. This result was achieved thanks to the use of a radio frequency identification solution developed by PC Sistemas, a company acquired by Totvs, which also provides the enterprise resource planning (ERP) system used by Leal.
The manufacturer manages a stock of more than 500,000 items at two distribution centers: one in Campo Limpo Paulista (SP) and another in Navegantes (SC). There are 15 thousand active items and a total register of 60 thousand specifications. This large volume of products requires that the company maintain a very high level of control, which is why Leal sought out Totvs’ RFID solution to track its merchandise.
“Our portfolio is quite diverse, including clothing, safety equipment such as gloves, and parachute belts, among others. And one line does not necessarily have to do with the other,” says Adailton Siqueira, Leal’s systems manager. “With a limited physical space, it happened that we lost items inside the warehouse and we ran the risk of making wrong deliveries.” Increased inventory control with RFID enabled the company to better meet external audits.
The solution uses two portals with fixed readers (the company has not revealed the manufacturer) within its receiving and shipping sections. “At receipt, we use the imported, manufactured or transfer products that were stored in the stock,” Siqueira explains. “In shipping, we have already adopted it for billing.”
“With RFID,” Siqueira adds, “we achieve a 30 percent optimization in operations, with greater speed of shipment and transformation of products, in addition to accuracy in traceability, thereby guaranteeing accuracy in stock.” After the adaptation period, he notes, the company noticed a 15 percent improvement in the separation of orders, as well as a 20 percent decrease in order-fulfillment times.
Previously, the company’s process was entirely manual. “We have an inventory of 2,200 pallets with RFID, which was previously impossible to manage,” says Alain Levy, Leal’s managing partner. Leal’s products leave the company’s premises already tagged. “Our aim is to help our customers adopt RFID for the control of PPE that will be used by their employees.”
Another need of the company that RFID addressed was managing expiration dates. PPE products have a predetermined shelf life and, in some cases, need to undergo routine inspections.
“This functionality ensures that our customers and their employees are protected from accidents, reducing the risk of non-compliance in work-safety audits,” explains Jacques Levy, Fair Trade’s managing partner. With the RFID system, he says, companies that buy from Leal will be advised when inspection and expiry deadlines are near.
The implementation was conducted in three phases. During the first phase, auditing, investment was made in stock control, focusing on the inventory of a specific line of insulated gloves and blankets. Fifteen thousand items were tagged with RFID tags supplied by Valid and CCRR, after which information was checked to determine whether there were any undue variations.
During the second stage, improvements were made to the process of buying fabric rolls. RFID tags identify each roll, which measures 170 meters in length, and indicate how many meters have already been used in production, as well as how many remain. For the third phase, the raw material enters the warehouse already identified via RFID, and orders are fulfilled using the same technology.
“During testing, we identify opportunities to optimize our processes,” Siqueira says. “Due to the way the pieces are stored, especially in the case of clothing, there can be divergence. That’s why we decided to redesign our storage, to improve the operation’s productivity.”
The deployment has resulted in additional developments, and the company’s next steps will be to tailor and perfect the internal labels for each type of product, and to standardize the use of RFID in accordance with GS1‘s Electronic Product Code (EPC) standard.
“Totvs works to be not only a technology supplier, but a partner in the development of the customer business,” says Gustavo Bastos, Totvs’ supply chain VP. “The project developed at Leal showed that the choice of a tool, such as RFID, can bring improvements in the processes of a company, giving space to grow and gain more competitiveness.”
“Deploying RFID was a positive experience,” Siqueira reports. “In fact, there were all sorts of experience, because the RFID system is made up of hardware, software and labels, which have at least three different suppliers. So when there is a problem, it is difficult to coordinate a resolution with the three suppliers at the same time. The challenge is to read RFID pallets with total reliability. We still have problems reading pallets in the portals. ”