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RFID Warehouse Solution Delivers ROI Within Months

Mission Foods is tracking reusable plastic trays at the food supplier's Texas warehouse to reduce loss, and plans to roll out the RFID system to its 33 other U.S. facilities.
By Bob Violino
Nov 15, 2010—Reusable plastic trays that cost $8 apiece might not sound like vital assets to a company, or items that need to be tracked carefully. But each year, Mission Foods, an Irving, Tex., supplier of taco shells, tortillas, wraps, salsas, snacks and other food products, loses thousands of these trays—at a cost of approximately $3.5 million.

Food products come into Mission Foods' U.S. warehouses from its manufacturing plants on the plastic trays, which then go out when Mission Food's independent distributors pick up orders. The company did not have good control over the number of trays coming and going, and they were often misplaced or stolen—or not returned by distributors. "Plastic is a commodity in the street," says Eduardo Valdes, the VP of MIS at Gruma, a company in Monterrey, Mexico, that owns Mission Foods. Local authorities in Southern California, for example, recently called the company to notify it that more than 250 trays had been found in a location that was processing plastic items.

Food products come into Mission Foods' U.S. warehouses from its manufacturing plants on plastic trays, which then go out when the company's independent distributors pick up orders.

Mission Foods is one of the world's largest producers of corn flour and tortilla products, providing nearly one-quarter of all tortillas sold throughout the world. The company operates production plants throughout the United States, as well as in Europe and China.

In 2009, the firm's managers decided they needed to halt the loss of trays, and set out to find a technology solution to the problem. "We were looking for a system that wouldn't create extra work for our warehouse personnel," Valdes says, "something that would follow the natural picking and shipping process, but that would tell us who is taking the trays."

After evaluating several options, the company deployed an RFID-based tracking system from Intermec at its warehouse in Dallas, Texas, in December of last year. "It took us four months to test and implement the system," Valdes says. Among other benefits, the system enables Mission Foods to keep tabs on which independent distributors are removing trays from its warehouse at a given time, as well as which are returning them, thereby providing greater accountability for missing trays.

By replacing the cartons with returnable plastic trays, the company hoped to save money, with RFID helping to ensure that the trays are returned.

While Mission Foods was testing the RFID system with the plastic trays used to transport heavier products, such as tortillas, management opted to replace the non-returnable carton containers used to carry lighter items—tortilla chips, for instance—with the returnable plastic trays. The carton containers cost about $1 apiece, Valdes says, so "we were basically throwing a dollar away" each time such a container was used.

By replacing the cartons with returnable plastic trays, Valdes explains, the company would ultimately save money. But the key to making the investment work was ensuring that the trays would indeed be returned to the company—and that's where the RFID solution would be a huge help.
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