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Phasing In RFID

Dairy Farmers of America met Wal-Mart's tagging mandate, and the organization is now poised to reap internal benefits.
By Jill Gambon
Mar 05, 2007Dairy Farmers of America (DFA) had little choice in early 2005 when Wal-Mart requested suppliers to begin putting RFID tags on shipments. The $9 billion cooperative was among the second wave of Wal-Mart suppliers to join the effort and began tagging cases of cheese by January 2006 to meet the retailer's deadline.

Headquartered in Kansas City, Mo., DFA owns and operates 33 processing plants around the country. These plants turn out not only milk and cheese but also coffee creamers, sauces and a variety of other products, under such brand names as Borden, Keller's Butter, SportShake and VitalCal. The cooperative presently has 20,600 members and 4,000 employees. In 2005, DFA says it delivered 59.7 billion pounds of milk—34 percent of the nation's milk supply—to the marketplace.

DFA first introduced its automated RFID tagging system in December 2005, with a single production line at its Plymouth, Wis., processing plant. Since then, the firm has expanded RFID tagging to seven production lines at two plants, including a mobile unit that can be moved to tag cases as needed. About 12 different cheese products are being tagged in all. Over time, DFA expects to introduce the use of RFID to other processing plants, and to additional product lines as well.

The dairy cooperative is now exploring ways to use the data collected via RFID to improve operations and boost profits. "New product introductions, promotion management and stock-outs" are some of the areas DFA will look to improve, says Toby Rush, president and CEO of Rush Tracking Systems. Specializing in RFID, the Kansas City, Mo., systems integrator worked with DFA in putting together its RFID implementation.

Getting to the point where it can reap benefits from its RFID investment is just the latest step in a journey that began with Wal-Mart's mandate. To comply, DFA assembled a staff from different parts of the organization, including corporate IT, sales and marketing, and supply chain. The group was charged with formulating the requirements for an RFID system, as well as reviewing vendor proposals.

DFA established some key specifications for its RFID deployment: The system had to be administered and supported from its data center, located in Springfield, Mo. This would allow the central IT staff to handle any changes or updates, and to troubleshoot any problems remotely. In addition, disruption of operations at DFA's processing plants had to be kept to a minimum so production schedules would not be interrupted. The cooperative wanted minimal impact on its operating costs, and did not want to hire additional employees to meet the compliance mandate.

DFA staff looked at proposals from several systems integrators and RFID vendors before selecting Rush Tracking as its systems integrator, and choosing software from OATSystems. The OAT Foundation Suite, a software package that incorporates workflow, data management and analytic features for RFID applications, seemed robust enough to handle the cooperative's production demands. It also promised enterprise-level scalability, with backup capabilities in case the system were to go down. Bob Tiede, the cooperative's IS director, says, "We felt it had the capacity we needed, with failover and redundancy." Another factor in OATSystems' favor was its compatibility with IBM's WebSphere platform, which the cooperative had already deployed in other areas.
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