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RFID Helps Interstate Batteries Remain No.1

The 63-year-old company embraces new technology to manage inventory and keep its dealers well stocked.
By Jennifer Zaino
Jun 21, 2015

Many companies have difficulty dealing with change, but Interstate Batteries thinks change is essential. For 63 years, the company has been powering vehicles with its starting, lighting, ignition (SLI) batteries. Interstate sells more than 17 million SLI batteries annually through its distributor network of 300 wholesale warehouses that supply 200,000 dealers in the United States, Canada and other countries. The company also sells 16,000 other types of batteries for marine, commercial/fleet, motorcycle, lawn and garden, and other products.

Interstate Batteries is the No. 1 brand of auto-replacement battery in North America—a position that can be attributed, in part, to the company's "focus on making sure dealers are well supplied with the products they need" and its "very sustained legacy of innovation," says Bruce Hellen, director of business practices for the company.

Since 2013, five distributors, 29 trucks and 2,000 dealerships have participated in the project, with more to join this summer.
Interstate realized it had to respond to changing markets if it wanted to remain the battery supplier of choice to dealerships, Hellen says. In November 2011, the company partnered with RFID solution provider Seeonic to develop a new, more efficient way to resupply dealers. The RFID initiative enables Interstate to improve its ability to help its dealers manage inventory, Hellen says, and support its goal of being a good environmental steward.

Since November 2013, five distributors, 29 trucks and 2,000 dealerships in five markets across the United States have participated in the project's validation phase. Interstate has RFID-tagged two million batteries, which are tracked on 2,000 RFID-enabled IBSmartRack storage or display racks. The solution eliminates the need to send personnel to dealerships to count battery stock, a process that was time-consuming and prone to human error.

The company is still determining when to end field-testing, but it is confident enough in the RFID solution that it is expanding the validation phase into six new markets (as yet unnamed) this summer. The validation phase has proven to the company that the system is very reliable, stable and scalable, Hellen says.

"RFID certainly has strong promise to be a solid foundation for tracking inventory of all types," even lead- and liquid-filled batteries that present some natural hurdles, Hellen says. "If you compare today to 30 or 40 years ago, those who clung to old distribution models have probably become so inefficient that they are out of business now. If you don't evaluate and improve your distribution model, you will get left behind by those who do."

Powering a Solution
Interstate Batteries considered several options for improving inventory management, and determined RFID technology was the most scalable and economical solution, Hellen says. But, he notes, there were two significant obstacles: There was no off-the-shelf solution and it would be hard to read tags on lead- and liquid-filled batteries. A program manager in charge of the project, supported by an evaluation committee and the company's executive board, determined that Seeonic fit their description of a development partner that had "an entrepreneurial spirit and a willingness to think out of the box," he says.

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