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Eliminating Waste

Businesses are adopting RFID to identify and eradicate the inefficiencies that impede growth and profits.
By John Edwards
Apr 15, 2013

Carlo Nizam is head of the value chain visibility and auto-ID program for Airbus, one of the world's largest aircraft manufacturers. He is also a waste-buster. And like many of his counterparts in retail, health care and other industries, Nizam has discovered that radio frequency identification is a powerful waste-fighting tool.

"To tackle waste, you need to be able to measure it; you need to know where it is," Nizam says. "But that's easier said than done because, in reality, people have, more often than not, little data or limited visibility of how their processes are performing, so they don't necessarily know where the waste is."

Illustration: iStockphoto

RFID provides the insight essential for spotting hidden pockets of waste lurking inside supply chains, production lines, inventories and other key areas. The technology also helps companies squeeze out waste by automating existing processes, so they run faster and more efficiently.

"If you want to really tackle waste, you really have to take a big-picture approach, because one of the things people need to realize is that waste doesn't differentiate between company boundaries," Nizam says. "It flows across boundaries, and across processes." Airbus, which began using RFID in 2005, has taken an enterprisewide approach to RFID, using the technology in its supply chain, manufacturing, assembly and in-service operations.

For manufacturers, waste in any form hampers agility, cuts into profits and reduces a company's ability to improve or maintain its market position. RFID is helping manufacturers trim several types of waste, says Michael Liard, RFID director at VDC Research. "Most importantly, RFID technology allows a manufacturer to reallocate resources or make sure that processes are optimized," he says.

Retailers often operate on microscopically thin margins, so detecting and eradicating waste is essential to surviving in ultracompetitive markets. Cutting waste is primarily a matter of achieving and maintaining inventory visibility, says Justin Patton, director of the University of Arkansas' RFID Research Center. "You might want to specifically reduce theft, or you might want to specifically reduce spoilage on a particular loading dock," he says. "But always think of your plan in terms of how the technology is going to help make your inventory more accurate and how that more accurate number will affect everything else, such as ordering and forecasting."

Facing near-runaway costs and increasingly stringent regulatory compliance mandates, health-care organizations have made finding ways to cut waste a top priority. For many years, hospitals have defined waste primarily in terms of lost physical assets, such as misplaced, misused or stolen equipment and supplies, says Mark Norris, president and CEO of Ekahau, an RFID solutions provider for the health-care industry. "Today," he says, "that definition has expanded to include time spent on unnecessary manual or duplicate processes and procedures, time spent looking for lost items and time away from patient care."

Here, then, is how RFID is eliminating waste at Airbus, Lemmi Fashion, the Eastern Maine Medical Center and other businesses.

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