A factory that produces car parts sold by Bosch Fahrzeugelektrik in Eisenach, Germany, is using RFID-based kanban cards to speed its production process and better manage customer orders. Started as a pilot in 2006, the project is now operational and uses approximately 60,000 tags.
Bosch estimates that the RFID application will save the company more than €1 million ($1.4 million) per year.
The Eisenach factory produces about 18 different parts for cars, including gas pedals, engine speed sensors, accelerator sensor modules, wheel-speed sensors and secondary-air pumps. Bosch has outfitted each production line with RFID readers and created an application in which the RFID tag embedded in a paper kanban card assigned to a particular container is interrogated four times. This allows the company to track each part’s progress through production. It can also use the system to document each part’s production path in case government safety officials request such information.
Bosch delivers car parts to its customers—major automobile manufacturers—on a just-in-time basis using the “pull” principle. Under this concept, orders are triggered automatically as soon as a customer runs low on parts. The customer “pulls,” or demands, new parts and wants quick deliveries since it doesn’t keep many parts in stock. Such customer demands require Bosch to be able to produce quickly.
“We have to be able to build every part every day,” says Carsten Frost, who heads the IT department of the company’s logistics division.
Bosch Fahrzeugelektrik considered continuing with a bar-code system but rejected that option because it would have taken much more time to manually scan bar codes than to interrogate RFID tags, and it wanted to avoid bar-code stickers.
Prior to implementing RFID, the firm had made an internal decision to switch to smaller lot sizes—in other words, smaller groupings of parts—to increase the efficiency of its own production by making parts on demand rather than filling its warehouse shelves with car parts. As a result of this decision, Bosch began to produce smaller batches and make shipments to customers more frequently.
Previously, when the company was using larger lot sizes on pallets, data entry was not much of a problem; after the smaller lot sizes were introduced, however, more data was produced—that is, more production “events” occurred because of the smaller lot sizes. As a result, it sometimes took more time to enter data about all the orders going into production than it would have taken to gather the parts needed on the production line. The RFID system would eliminate the manual bar-code scanning of the smaller lots, thereby saving time and energy and helping the company become more flexible in filling orders and eliminate mistakes At one point, Bosch calculated that producing in smaller lot sizes would create the need for 12 million additional scans each year, for which it would need to employ 50 workers.
“The flow of materials was faster than the information flow,” Frost says, “and that was not acceptable. Accounting for things manually did not create value and lasted too long.”
With the RFID system now in place, a manager receives orders electronically on the PC in his office and takes a reusable, laminated RFID-enabled kanban card out of a storage cabinet, encoding information to it with an interrogator manufactured by FEIG Electronic. The reader is constructed like a mouse pad and kept on the desk to encode each RFID tag with two numbers. In addition to the tag’s unique ID code, to which other information is linked in the computer system, the tag also holds a production order number and a storing unit number that allows Bosch to track the part’s production processes. The 13.56 MHz tags in the kanban cards conform to the ISO 15693 standard and are made by Texas Instruments.
The RFID-enabled kanban cards are brought to the beginning of the production line. There, the cards are read for the first time when a worker waves a card in front of a Scemtec RFID interrogator, then places it in the sleeve of a container. Bosch chose separate readers for different points in the application based on its judgment of which readers would work best at which junctures.
At this point, the data collected via RFID is transferred to Bosch’s SAP system, which updates records with the exact time production began. This RFID data transfer is accomplished via middleware provided by business integration solutions provider Seeburger.
As the finished goods come off the production line, the container’s RFID tag is interrogated once more, providing the company an exact record of its production. Such information could be needed if a car’s part, for instance, were to fail and cause an accident.
Other workers then transfer the container of finished products to the warehouse, where a third tag reading takes place using a Data Logics handheld interrogator. This enables the system to be updated with information about which finished parts are stored in the warehouse.
Bosch prepares the parts for delivery and uses a Scemtec fixed interrogator to perform a fourth and final reading of all outbound containers stacked on a pallet. The system is updated with detailed information on the parts, as well as the time at which they were shipped to particular customers.
Bosch says the system has already paid for itself, though the company has declined to provide further details.