May 03, 2004I can’t remember the last conversation I had about an RFID implementation that didn’t settle on government agencies and large, multi-national retailers changing the face of supply chain management. Certainly these large organizations are pioneering a significant transformation of the global supply chain, but what many people overlook are the small to medium-sized businesses that have been using RFID technologies to improve their business for years. These businesses, with anywhere from $1 million to $500 million in annual revenues and one to 1,000 employees, are expected to have the highest growth of information technology spending this year, according to the research organization Aberdeen Group.
Automatic data collection (ADC) simply gives small to medium-sized businesses a competitive edge. They can see ROI potential in a way that many larger businesses cannot. In many North American small to medium-sized businesses, wireless solutions already have had a major impact. For example, a recent Gartner study stated that wireless applications have contributed to a 90 percent decrease in put-away and location errors for businesses. In fact, the small to medium-sized businesses I’m referring to have achieved as much as 35 to 40 percent reduction in inventory cycle counting time, and overall productivity has jumped 12 to 15 percent. Gartner even predicts that by 2005, 40 percent of inventory intensive small to medium-sized businesses will have some type of wireless tracking strategy.
That comes as no surprise to those of us who see firsthand how ADC technologies are making a mark with small businesses. One company we’ve worked closely with is Paramount Farms, the world’s largest supplier of almonds and pistachio nuts, which is using RFID to improve efficiency and productivity. The Paramount team knows that when the harvest is ready, it won’t wait. Failures in equipment and technology can be disastrous when the window of opportunity for gathering food at its peak is so small. Paramount found the means to improve efficiency and productivity in a small but powerful RFID system. Eleven handheld computers, three access points and three RFID tag readers supply the grower with the tools to keep up with business and to expand it. (For more on this implementation, see CASE STUDY)
Embracing RFID means Paramount managers are able to get more with less. For example, they found they could scrap plans to enlarge the company scale house because the Intermec system helped cut initiation time for processing new crop loads by 60 percent. Getting information in real time allows workers to make better management decisions, especially during the pressure-packed harvest. After installing the new automation system, Paramount’s receiving department got so efficient at equipment logistics that it reduced leased trailer usage by 30 percent.
The scope of Paramount’s pistachio receiving operations at harvest is significant – 20 million pounds per day to be received, recorded, weighed, pre-cleaned, sampled and processed.. With this kind of volume, the importance of the RFID-based Grower Receiving System cannot be overstated. The company now has complete confidence in the integrity and the accuracy of its data.
Paramount can foresee refinements to the system that would further improve its business. For instance, the company envisions linking the RFID Grower Receiving System to a secure, self-service Internet portal so its suppliers can do transactions and access their account history from their own computers. That would eliminate the back-and-forth paperwork now required to do business, forge contracts and address issues, and could lead to automated payment through electronic funds transfer.
RFID has great potential to help large retailers and manufacturers. But we shouldn’t lose site of its potential to help small to midsized businesses compete. Companies such as Paramount Farms have already proven that RFID and other advanced ADC technologies can help them to grow their businesses by creating new efficiencies.
Mike Wills is vice president and general manager at Intermec Technologies, an Everett, Wash.-based provider of RFID and other automatic data collection technologies. To comment on this article, please click on the link below.