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End Users Prove RFID's Value

The global recession caused some companies to postpone RFID projects, but other deployments proved the technology could deliver big benefits.
By Mark Roberti
Feb 01, 2010—When 2009 began, some technology writers questioned whether, in the face of a global recession, companies could afford to deploy radio frequency identification. Some even questioned whether the technology was still relevant. Ironically, in a year when almost all the business news was bleak, 2009 might just be remembered as the year RFID proved its value. Here are some of the applications end users deployed successfully last year.

Manufacturers around the world showed that RFID could be used successfully to track parts and raw materials, work in process and finished goods inventory. Marigold Industrial deployed a passive ultrahigh-frequency system at its manufacturing facility in Poiares, Portugal, to get better visibility of the materials used to make its protective gloves. The system, which replaced a paper-based tracking process, increased the accuracy of inventory and shipment records within the facility. Once fully optimized, Marigold says it should also decrease the amount of time required to complete inventory counts.

Bosch, the world's largest supplier of automotive parts, is using RFID-tagged kanban cards to trigger the replenishment of components for the diesel fuel injectors it manufactures at two locations in Germany. The cards contain passive high-frequency RFID tags at one site, and passive UHF RFID tags at another. Before RFID was implemented, it sometimes took up to two hours for parts replenishment orders to be placed. Both systems, which have been functioning without problems, have sped up the parts replenishment process and reduced errors. Because the RFID deployments promise to deliver a fast return on investment, Bosch plans to roll out the system at eight additional sites worldwide that build the same injectors.

ABB, a global manufacturer of power and automation equipment for utility and industrial companies, deployed an RFID system at its factory in Helsinki, Finland, to better track outbound shipments of approximately 200,000 drives per year. The system has reduced shipping errors, which affect its invoicing process and, therefore, revenue. And Caterpillar is employing a real-time locating system (RTLS) at its heavy-equipment manufacturing plant in Belgium to ensure its hydraulic valves and hoses are assembled properly. RFID ensures the appropriate wrench is used on each hydraulic valve.

RFID proved in 2009 that it could deliver big benefits for retailers, particularly those selling apparel, footwear and accessories. Delivering the keynote address at RFID Journal's RFID in Fashion event in August, Zander Livingston, American Apparel's director of RFID, said the technology had enabled his company to improve inventory accuracy to about 99 percent, which led to a 14 percent increase in sales at RFID-enabled stores.

Charles Vögele Group won the 2009 RFID Journal Award for best implementation for its system of tracking individual apparel items from point of manufacture to point of sale. Speaking at RFID Journal LIVE!, Thomas Beckmann, the company's head of supply chain, said RFID enabled Charles Vögele to illuminate what it calls the "black holes" in its supply chain, while also reducing stock-outs and time spent counting inventory by 50 percent.
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