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Nerves of Steel

Manufacturers and suppliers that deploy RFID to track and manage steel slabs, pipes and other assets say the benefits are well worth the work.
By Jennifer Zaino
Mar 02, 2015

Steel manufacturers have been slow to embrace radio frequency identification technology. In addition to the usual barriers, including cost and a resistance to change, there has been concern that RFID doesn't work on or near metal or in harsh environments. But like other manufacturers, steel producers are plagued by the inefficiencies that affect inventory, logistics and supply-chain management. So ThyssenKrupp Steel Europe, one of the world's largest steel producers, ignored all the usual arguments for not deploying a new technology and, in 2007, announced it was using ultrahigh-frequency RFID tags to track 30-ton steel slabs from Brazil to its German processing factories.

This proved to be a solid investment and the beginning of the company's engagement with the technology. Today, RFID forms the core of ThyssenKrupp's centralized services solutions for tracking and tracing steel across a multinational supply chain composed of its own and third-party facilities in five locations: its plants in Duisburg, Germany, and Sepetiba, Brazil; a receiving factory in Alabama that ThyssenKrupp owned at the time; and cross-shipping seaports in Mobile, Alabama, and Rotterdam.

RFID vendors have developed a variety of tags that work well on steel surfaces and embedded in steel products. (Photo: ThyssenKrupp Steel Europe)
Since that initial deployment, vendors have developed a variety of RFID tags that work well on steel surfaces and embedded in steel products, says Loïc Feinbier, head of business process outsourcing management at ThyssenKrupp's Global Shared Services group, who spearheaded the company's first foray into RFID. But, he adds, rarely will the same tag suit every application and, in any case, getting the tag right is just part of the job. The rest is building a process around the technology. "That's what makes steel today so hard and so much of an effort," he says. "People are not necessarily willing to invest time and money to develop the solution."

RFID also plays a role in improving operations at ThyssenKrupp's factories, where steel slabs are turned into products, such as coils for the automotive industry. Other steel companies involved in manufacturing or finishing work are piloting RFID for inventory and supply-chain management. In addition, steel producers are improving customer service by tracking pipes and other structural steel products shipped to construction and oil and gas sites.

Linking the Steel Chains

It took nearly three years from ThyssenKrupp's initial pilot to develop a total solution, which addressed both technology and business issues. The company determined which RFID tags and readers to use, and how to affix them to objects to ensure identification accuracy. Each RFID tag is programmed with a unique identification number, based on GS1's Serialized Global Trade Item Number (SGTIN) standard. Additional information, including steel grade and slab dimensions, is printed on the label. The work also required building applications, creating logic rules to drive down misreadings, and enabling IT systems integration capabilities that span its own and its partners' systems, Feinbier says.

Developing a global solution presented several challenges, says Heiner Niehues, one of Feinbier's first hires and now ThyssenKrupp's head of supply-chain visibility/RFID. Each port through which steel shipments pass uses a different crane type, so reader-mounting installations had to be customized for each location, and ultrahigh frequencies and power emissions had to be optimized for use in different countries.

When large slabs of steel are being cross-shipped, "identification has to be real fast or a ship would lie longer in the port," Niehues says. The longer it takes to unload a ship, the more costs add up. RFID offered real value over using bar codes or manual approaches to understanding inventory movements at ports.

Implementing RFID was a challenge, because it had to deliver speed and accuracy in a complex environment, with "assets coming out of chaotically organized storage in the vessel," Feinbier says. "This took a massive amount of effort to figure out on our own because there was no leader or software in the market to do it."

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