Sumitomo Electric Lightwave Boosts Productivity in Its Warehouse

By Claire Swedberg

The North Carolina manufacturer of fiber-optic cables has been using EPC tags to track raw materials, and plans to tag the reusable reels that it ships to customers in the near future.

Sumitomo Electric Lightwave, a North Carolina manufacturer of fiber-optic cables, reports that radio frequency identification has increased its production by 40 percent annually, without requiring the hiring of additional warehouse employees, due to an increase in efficiency of tracking the locations of raw materials. Sumitomo is using the technology to track the materials—such as reels of steel tape and Kevlar yarns, as well as boxes of plastic materials—as they flow through the company's warehouse in Research Triangle Park.

"We wanted to improve raw-material flow and reduce the amount of [data-inputting] transactions we had to do," says Cosby Dudley, Sumitomo's production-planning manager, who described the deployment during a presentation at RFID Journal LIVE! 2011, held last week in Orlando, Fla. The RFID solution was provided by Mid-South Marking Systems, based in Memphis, Tenn. Within the next year or so, the company intends to expand its use of the system to track smaller raw materials, along with the shipping and subsequent return of reusable steel cable reels.

Cosby Dudley, Sumitomo Electric Lightwave's production-planning manager

Sumitomo Electric Lightwave—a subsidiary of Sumitomo Electric Industries, in Japan—is a manufacturer and supplier of fiber-optic cable and related equipment for homes or businesses.

The company's warehouse is a busy place, with just two employees responsible for moving raw materials to the assembly area, in addition to tracking the location and stock volume of each of more than 100 types of materials within a 75,000- to 100,000-square-foot area. Moreover, the warehouse supervisor was responsible for recording and storing data regarding each material movement throughout the facility—which was time-consuming and could result in decreased productivity.

In 2007, the company began offering new products, thereby increasing activity at the manufacturing site. These new products required new raw materials, and the warehouse inventory increased from 120 unique raw materials to approximately 150. "If a raw material ran out," Dudley says, "we knew it could have a serious negative impact on our schedule."

To manage the supply of raw materials, Sumitomo needed to know the movements of those materials throughout the shop floor—but occasionally, Dudley explains, these materials could not be located. "Because of the size of our facility and the number of possible locations for material, it may take one to two hours to do a good investigation of a negative quantity," he states. "This was a substantial amount of time for the warehouse manager." Therefore, workers manually recorded every transaction—each movement from one part of the warehouse or assembly site to another—on paper, which was later input into the system by the supervisor.

The company's business forecast indicated that in 2008, it would require about 40 percent more raw materials than it had the year prior. Subsequent years had indicated similar steady growth.

According to Dudley, many of the raw-material items had bar-coded labels on them, in order to help expedite identification. "The bar codes we had weren't easy to read," he says, "and it still required an individual to do a transaction each time material moved out of the warehouse."

In late 2007, the warehouse opened talks with RFID vendors, but found that prices and experience levels varied widely. In fact, the first three companies seemed to have little knowledge of how the technology could be used for this application. One firm required $10,000 to perform an onsite engineering study, Dudley recalls, while another was willing to conduct the study for $3,000. "We couldn't understand the huge differences," he says, "and we felt we didn't want to pay someone to tell us whether or not it would work. It didn't seem that hard to test it and see if it would work, but we didn't have any RFID equipment."

Mid-South Marking Systems provided equipment and software for trials, free of charge. During those trials, Dudley says, Sumitomo was then able to tag one of each of 150 types of materials. Toward the end of 2007, the firm built a portal with four antennas, through which workers drove the materials by forklift. By early 2008, Mid-South Marking Systems and Sumitomo were installing the system.

In the warehouse, Mid-South Marking Systems installed three Alien Technology ALR-9900 EPC Gen 2 RFID readers at portals through which forklifts would pass while transporting raw materials to the assembly area. The company also provided RFID labels made with Alien ultrahigh-frequency (UHF) Gen 2 tags. Sumitomo employed a Zebra Technologies RX110xi printer-encoder to write a unique ID number to each tag, as well as print the item number, description and RFID tag number on the front. An RFID label, along with a non-RFID label printed with identical data, was then attached to each reel or box of material.

Sumitomo had experimented with tag positioning, reader antenna location and power settings during the pilot to determine if it could optimize the readings, and was confident that all tags could be read as they passed through the portals. Mid-South Marking Systems also provided its Portal Track software, to capture each read event and link the location information with each tag's unique ID number. That information is transmitted to Sumitomo's enterprise resource planning (ERP) system, where the company's software determines what material has passed through that portal, and whether it will need to be replenished.

"Mid-South Marking has been a great guide for us as we've made this trip," Dudley says. "We are still in contact today. They make changes to the software based on our requests, we buy our labels and some supplies from them and we've also bought an additional printer from them."

Each reader portal comes with a light stack that illuminates yellow while tags are being read, green for a completed read, and red for a non-read event.

Additionally, the company purchased a Newcastle Systems NB380 cart that holds not only the Zebra printer-encoder but also a plain label printer for non-RFID labels, an Alien ALR-9900 reader wired to two Alien reader antennas and a laptop. For inventory counts, a worker wheels the cart around the warehouse, and the reader antennas capture the unique ID number of every tag within its vicinity. The NB380 cart has a built-in industrial battery (and a charger) to power the interrogator, laptop and printers.

In the two and a half years that the system has been in place, Dudley says he met with three key players affected by the project; the company's IS manager, accounting manager and warehouse supervisor. "All said they would do it again, knowing what we know now," he states. "Accounting said the implementation was seamless to them. They didn't have to make any changes, and they feel like we have better accuracy when we report raw material numbers."

Over the coming year, Sumitomo Electric Lightwave plans to begin tagging smaller inventory items, such as containers of fiber and ribbon. What's more, the company plans to utilize the system to track reusable steel cable reels. "We have a few thousand steel reels that travel the country, taking cable to our customers," Dudley explains. "Keeping track of these assets is a cumbersome issue." Some reels remain at customers' sites for months before being returned. Sumitomo hopes to employ RFID to track the departure and return of these reels, he says, noting, "That will be our 2012 goal."