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RFID Speeds P&G Plant Throughput

When Procter & Gamble's facility in Spain boosted throughput, the loading dock became a bottleneck. RFID increased the speed at which pallets could be loaded on trucks -- and it eliminated mistakes and cut costs.
By Bob Violino
Dec 29, 2003—Feb. 3, 2003 - Two years ago, Procter & Gamble decided to increase logistics throughput at a manufacturing plant in Spain. The plan called for forklifts to load 33 pallets onto delivery trucks every 20 minutes. The company invested in some new equipment, but it was clear that it also needed to revamp procedures for loading the pallets. Otherwise, the dock area would become a bottleneck.

There were already times when forklift drivers would run out of room on the dock for stacking pallets about to be shipped. That meant some pallets either had to be moved twice or production had to stop and wait for the loading dock to be cleared. To avoid these problems, the company decided to load the pallets directly on trucks, instead of staging them on the dock. The only problem was the pallets were being sent directly to customers. That meant P&G needed a way to guarantee that the wrong pallet would never be put on a truck. And the system had to be fast. There wouldn't be time to have people manually check and double check orders.
Speed and accuracy were critical to the new system

Adam Vilalta, a P&G project engineer, hit on the idea of using radio frequency identification (RFID) to identify the pallets. He and a team of people from operations, engineering, and IT devised a cost-effective system that identified pallets with 100 percent accuracy, enabled the plant to shift to direct loading, and saved money by reducing the number of forklift truck drivers needed. The system has been up and running since last May. "I'm very satisfied with the results," says Vilalta. "But the one that really counts is the distribution center manager, and he's very satisfied."

P&G has been a pioneer in the use of RFID. The company was a founding sponsor of the Auto-ID Center and has played a key role in the center's field test of the technology needed to track Electronic Product Codes. That technology is still under development and may not be adopted for a couple of years. The project in Spain shows how P&G is using existing RFID technology to enhance its operations today.

RFID was actually not Vilalta's first choice. First, his team looked at a bar code scanning system that had been developed by P&G for its SAP warehouse management system. A forklift truck operator would download to a wireless, handheld bar code scanner a list of pallets that he had to load. He would then scan labels on pallets coming off a conveyor from an automated warehouse, pick up two pallets at a time, and bring them to the dock. There, he would scan a bar code identifying the dock. If those pallets didn't belong on the truck at that dock, the system would sound an alert.

The system met the need for accuracy, but was way too slow. Tests showed that having to scan the bar codes on the pallets and docks required 40 percent more time than doing nothing. So the next idea was to put oscillating bar code readers on the docks, similar to the readers that were used on the conveyor system to route the pallets. That would be faster than scanning by hand, but there was no way the system could deliver the 99.99 percent accuracy P&G needed. That's because bar codes get dirty or damaged as they are routed on the conveyors. And the scanners mounted on masts near the dock doors might not catch the bar code as the forklift moved a pallet onto a truck.

"Then, I got the flash of using RFID tags," says Vilalta. "We had used them inside our manufacturing plants for tracking reusable containers. I got the idea of putting tags on the pallets to identify them correctly as they go into the truck."
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