RFID Helps Thermo King Streamline Parts Replenishment

At its factory where vehicular heating and air-conditioning systems are made, employees press a button to alert management whenever parts need to be replenished, thereby preventing work stoppages and part overstocks.
Published: March 3, 2009

To ensure that the quantity of parts it maintains in inventory remains optimal, Thermo King, a manufacturer of heating, ventilation and air-conditioning equipment for buses, trains and trucks, is employing an active RFID system.

Using AeroScout tags, the system is built onto the company’s existing Wi-Fi system and was integrated by IMEC Technologies in Thermo King’s Galway production facility, located on the west coast of Ireland. If all goes well, the company says it may expand the system to all 11 of its production facilities worldwide. This year, the firm is also in the process of expanding its usage of RFID at the Galway facility to include to asset tracking.

The immediate challenge for Thermo King involved the development of what it calls its e-Kanban system (a signaling system to trigger an action such as inventory replenishment) that enables it to better manage the number of parts available at all stations at which workers assemble parts to produce heating or cooling units. With the proper information, says Amir Ben-Assa, AeroScout’s industry solutions marketing director, replenishment can be managed so that the company does not have an excessive quantity of parts on the manufacturing floor, or suffer shortages resulting in work stoppages. At press time, Thermo King had not responded to requests for comment.

The manual part-replenishment system Thermo King employed prior to adopting RFID had several shortcomings. The work of assembling parts is typically carried out at stations throughout the facility. If workers discover they are running out of parts used during the assembly process, they must contact management, either by phone or by walking to the person in charge of ordering replenishment. If the company’s on-floor inventory of parts used in the assembly of its heating or cooling units runs out, work is stopped until additional components can be brought in from the warehouse.

To avoid such problems, companies typically store a high level of inventory at assembly lines and stations. Space is tight at such facilities, however, as it is at Thermo King’s production plant. “They don’t have unlimited space,” Ben-Assa says, “so what they are trying to do is establish a kanban system in which they only pull inventory [from the warehouse] when it is required.”
“The key is to have minimum inventory for the space,” says Steffan Haithcox, AeroScout’s senior director of marketing, “but to have enough to ensure good throughput.” says Steffan Haithcox, AeroScout’s senior director of marketing.

Thermo King first began discussing an automated solution with IMEC and AeroScout in early 2008 and the group conducted a proof-of-concept trial in April of that year, in which it tested the hardware to ensure proper read rates, then deployed the system throughout the entire factory in August. With the system, Ben-Assa says, the firm has installed approximately 100 AeroScout 2.4 GHz T2 tags, with a tag mounted next to each container of parts.

When a container of parts runs low, an employee presses a button on its tag, which transmits its ID number to the Wi-Fi access points already installed throughout the facility to allow wireless laptop connectivity. The tag transmits not only its unique ID number, but also the assembly part serial number previously encoded when that tag was first installed. AeroScout Mobile View software links the ID number with the location at which the tag was installed, then transmits an e-mail alert to staff members in charge of replenishment, with the station number and the part number required, as well as the time at which the order was sent.

“We are extremely excited about this application,” Haithcox says, “not just because it is a pretty cool application, but because it is also an example where we can increase throughput and decrease cost, while leveraging an existing Wi-Fi system.” This is the first parts-replenishment system to be announced by AeroScout, he notes, though several other companies are also utilizing the system for the same purpose.

Additionally, Thermo King has begun tagging about 500 pieces of equipment, such as dollies to be tracked using the same Wi-Fi infrastructure to help workers locate items in real time. With the asset tags, Thermo King will be able to track each tag’s location based on signal strength as they transmit to Wi-Fi access points.