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TrenStar: RFID With Less Risk

The asset-management company plans to charge brewers to track their beer kegs using RFID. Is this the model that will spur adoption?
Oct 28, 2002—Oct. 28, 2002 - Trays, dollies, totes, pallets, carts, containers –supply chains are littered with reusable assets that companies would like to track more closely. Radio frequency identification would seem like an attractive option. But few companies want to invest large sums in tags, readers, software and system integration – especially when the economy is weak and sales are falling. TrenStar, an asset management company based in Denver, Colo., thinks it has the solution: Outsourcing.

Courage to outsource
Last month, TrenStar purchased more than 1 million beer keg's from Carlsberg-Tetley Brewing Ltd., one of the largest brewers in the U.K. TrenStar is putting RFID tags on the containers, and over the next 15 years, it will provide Carlsberg-Tetley with a keg management service. The brewer will pay for the use of the kegs on a "per fill basis." Earlier in the year, TrenStar purchased nearly two million kegs from Scottish Courage Ltd., the U.K.'s leading brewer, as part of a similar deal.

Under the unusual arrangement, TrenStar will put RFID tags on the rim of each keg and install fixed readers alongside conveyors in its own depots. Handheld units will be given to drivers who will scan the kegs as they go on the truck and as they are delivered to pubs. (TrenStar doesn't own any trucks; it uses third party logistics providers.)

The company will provide kegs to the breweries as they need them, deliver them to the pubs, pick them up from the pubs, weigh and wash them and then send them back to the brewery to be refilled. The movement of the kegs is tracked along the supply chain, and the brewers can go on TrenStar's extranet site to see exactly where any particular keg is at any moment in time.

More important, the system enables users to generate reports about how long the kegs were in the brewery or how long a particular keg with a particular brand was in a pub. These reports can be sent automatically via e-mail to anyone in the company. So marketing can know how well a particular brand is doing at the pubs, production can see how quickly the kegs are turned, and finance can calculate how much of a refund the brewer will get on excise taxes paid (more on tax savings later).

TrenStar's unique approach is reshaping the British brewing business. The company is looking to expand into non-beer beverages in Europe, chemicals and automotive in the U.S., and other industries worldwide. "We are tying the benefit to usage, says Mike Dempsey, TrenStar's executive VP for North America and Asia-Pacific. "With RFID, there are a lot of people dipping their toes in but they aren't taking the plunge because of the risk. We mitigate the risk by managing the technology process and providing to clients. They don't have to worry about investing in the system up front."
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