RFID Asset Tracking 5 Keys to Success

Transcription

1 RFID Asset Tracking 5 Keys to Success Delivering Real-time Visibility to the Enterprise 2011 OATSystems

2 RFID Asset Tracking: Keys to Success RFID and RTLS are being widely deployed in multiple industries for asset tracking applications, within manufacturing facilities, distribution centers, trailer yards, maintenance depots and elsewhere across the value chain. Real-Time Asset Tracking projects vary based on the assets themselves, the environment in which they are tracked and the business processes and corporate functions they impact. Over the past decade, OATSystems has deployed hundreds of RFID and RTLS applications, tracking assets as diverse as electronic components, aircraft fuselage, agricultural seeds, tissue samples, reusable transport items, controlled pharmaceuticals, industrial machinery, lab equipment and storage trailers. As a result of this extensive experience, we have learned that regardless of industry, company and business function, successful RFID Asset Tracking implementations share five common characteristics. This guide details these Five Keys with process-specific examples and case studies. The 5 Keys Start with a High-Impact Business Process Streamlining a core business process with RFID will yield a faster, more measurable return on investment than an isolated pilot program. Start where it really matters. Align with Organizational Objectives. Improving customer service, quality or performance metrics (e.g. Lean Manufacturing, Six Sigma projects) will drive internal support, and often funding, for your project. Enable Enterprise Systems. Enhancing ERP, Program Management, MMS, MRO, Asset Management systems and other critical enterprise systems with real-time data and validation processes can yield greater advantages, in less time, than a standalone RFID system. Don t Reinvent the Wheel. Using a proven RFID Auto-ID application platform, making use of packaged solutions and working with a seasoned partner can shave months off your project plan. Prepare to Succeed. Success leads to more success, so don t risk being stuck with throw-away technology when you re tasked with a broader charter later in the game. Note: Although RFID and RTLS are referred to specifically within this document, UWB, Wi-Fi, along with other Auto-ID and sensor technologies may be used interchangeably for real-time enabled applications.

3 Start with a High-Impact Business Process. A high-impact business case is a clearly-defined operational process that is directly related to the bottom line. Automating a high impact business process (especially one that is manual, costly and inefficient) with RFID or RTLS increases not just asset visibility, but the visibility of the project itself which can lead to more corporate resources and support for your deployment. So while it may be appealing to experiment with RFID technology in an isolated area of your operation, this may not be the best approach. The following table lists some of the most common cross-industry business processes for RFID Asset Tracking: COMMON HIGH IMPACT BUSINESS CASES CROSS INDUSTRY Business Process: Functional Area(s): Assets Tracked: Why RFID / RTLS Asset Tracking?: High-Impact Performance Metrics: TOOL TRACKING Manufacturing Aftermarket Service Field Operations Specialized Equipment Tooling High value assets, high cost of capital Specialized assets are difficult to source/replace Out-of-Spec tools can compromise quality and safety High cost/potential risk of tracking right-to-use tools Risk of FOD (Foreign Object Debris) High penalties for inefficiency, noncompliance Significant reduction in duplicate inventory & spares Less rework, fewer quality issues due to out-of-spec tools Reduction in regulatory fines for missing right-to-use tools Reduced labor costs for locating tools, FOD prevention CHAIN-OF- CUSTODY TRACKING Logistics Transportation Critical Shipments Hazardous Cargo Labor-intensive transport & customs paperwork, confirmation processes Multiple logistics providers Risk of material breach, mishandling Risk of regulatory fines Faster revenue recognition, fewer disputes Streamlined customs clearance, Lower documentation costs Improved customer satisfaction WORK-IN- PROCESS TRACKING WORK ORDER TRACKING Manufacturing Components Subassemblies Batch #s Custom Orders Reusable Containers Reverse Logistics High level of working capital allocated to inprocess manufacturing Quality initiatives require higher visibility into each manufacturing step High level of rework, make-goods impacting profitability Labor costs for locating missing orders, expediting shipments Reduction in non-performing inventory and assets Reduction in scrap material, due to closer tracking of batches/expiration dates Reduction in rework, make-goods Reduction in labor costs for exception handling, transportation costs for expedited shipments

4 (cont.) Start with a High-Impact Business Process. The following table lists some of the most common industryspecific business processes for RFID Asset Tracking. INDUSTRY-SPECIFIC BUSINESS CASES Industry: AEROSPACE AUTOMOTIVE CHEMICALS Asset Tracking Applications: Tool/Tooling Tracking ATA 2000 Part Marking Audit and Attestation Warranty/Recall Tracking Kanban Management Line-Side Replenishment Hazardous Material Tracking Container Pedigree Batch Tracking CASE STUDY: WORK-IN-PROCESS TRACKING A Heavy Equipment Manufacturer had significant inventory of 95% complete orders. Missing a single part or requiring rework, these orders were not contributing to revenue, but tying up inventory, warehouse space and working capital along with customer orders. CONSUMER PRODUCTS DEFENSE INDUSTRIAL MACHINERY MEDICAL DEVICES/ BIOTECH OIL & GAS PHARMACEUTICALS Warranty/Recall Tracking Batch Tracking Tool/Tooling Tracking Kitting and Shipping WIP, Whole Goods Tracking Kitting and Shipping Tooling Tracking Clean Room Tracking Indirect Material Tracking Clean Manufacturing WIP Equipment Tracking Indirect Material Tracking Personnel Tracking Batch Tracking e-pedigree Controlled Substance Tracking The company worked with OAT to RFID-enable its SAP ERP system, gaining up-tothe minute visibility into Work-in-Process, materials inventory and finished goods. As a result, errors and rework have virtually been eliminated, while reducing labor and inventory costs and speeding delivery to customers. Start with Business Processes That Are: Well-defined Labor-intensive Directly related to performance metrics

5 Align with Organizational Objectives. The more measurable the scope, and the more tangible the results, the more support your project will receive. An RFID pilot in the back room could be considered a cost center, while a project that improves customer service, quality or cost efficiency can be a business driver that supports revenue and/or profitability. Many of these business drivers are close at hand. Organizations measure core business metrics on a regular basis, often through a Six Sigma or Lean Manufacturing initiative. Aligning your RFID project with these metrics can provide additional internal support while enabling you to show the tangible results of real-time asset tracking in the context of the overall business. As an additional benefit, these initiatives may be well-funded because they directly support corporate objectives, serving as an additional budgetary source for RFID projects. COMMON OBJECTIVES BY BUSINESS FUNCTION Function: Business Objectives: EXECUTIVE TEAM SIX SIGMA/ LEAN MANUFACTURING SUPPLY CHAIN / SOURCING / LOGISTICS MANUFACTURING FIELD SERVICE / MAINTENANCE ASSET MANAGEMENT Predictable Earnings Higher Profitability through Cost Control Zero Defects Reduction in Excess Inventory Lower Cost of Goods Sold Reduced Sourcing Costs Streamlined Documentation Controlled Transportation Costs Higher Throughput On-Time Delivery Reduced Dwell Times More Efficient Inventory Utilization Shorter Repair Times Reduced Rework Increased Parts Availability Improved Asset Utilization Lowered Operational Risk Align Your RFID Project with: Business Objectives Six Sigma / LEAN Initiatives Performance Metrics

6 Enable Enterprise Systems. ERP, WMS, MRO, Field Service Management and Asset Management systems are the lifeblood of many manufacturing and logistics operations. RFID and RTLS-enabling enterprise systems incorporates realtime production and delivery status into day-to-day business metrics. This enables manufacturers, logistics and service providers to uncover and address process errors before they impact production schedules, product quality or customer deliveries. Enterprise systems can also provide a built-in process framework for your RFID project, reducing deployment time and decreasing time to value. The following table includes common integration scenarios: Integrating RFID with Enterprise Systems ERP Enterprise Resource Planning MES Manufacturing Execution WMS Warehouse Management MRO Maintenance & Repair Operations MMS Materials Management Program Management BAM Business Activity Monitoring EAM Enterprise Asset Management Field Service Management Verify physical components against bill of materials Trigger inventory replenishment Locate missing parts & equipment Flag and expedite critical work orders Track physical products at each stage of testing and assembly Confirm custom orders match manifest Locate missing parts & equipment Verify manifest and destination for outgoing shipments Prevent mis-shipments with visual/audible alarms Track finished goods inventory and location Verify parts & equipment against service order Monitor installation and maintenance history Locate recalled or expired service parts Verify parts & equipment against service order Monitor installation and maintenance history Locate recalled or expired service parts Verify parts & equipment against service order Monitor installation and maintenance history Locate recalled or expired service parts Automatically update dashboards to reflect real-time: Physical inventory levels Orders shipped Operational efficiency Instantly locate physical assets across the value chain Monitor service maintenance history Manage compliance and audit requirements Confirm parts inventory requirements, truck manifests for service orders Monitor tool usage and maintenance history Locate recalled or expired service parts

7 (cont.) Enable Enterprise Systems. The example below illustrates a check-in/check-out process at a tool store. RFID is used to associate specialized tool requirements, work order and operator information at the point-of-use, while validating that information against WIP tracking and Maintenance schedule information in enterprise systems. In this case, the RFID-enabled system provides an alert to the service technician that the tool being checked out is due for calibration (therefore avoiding potential quality and safety issues from using an out-of-spec tool). EXAMPLE: AN RFID-ENABLED TOOL TRACKING PROCESS ERP / Program Management System Get Work Order Details from ERP / MMS / MRO System Update with New Location Status Validate Against Maintenance Schedule Update Work Order Status OAT Tool Tracking Get Specialized Tool Requirements & Location Check Out Tool at Store #3 Read Tool Information Send Service Details Auto-ID Devices & Sensors RTLS, Wi-Fi, Barcode, Active/Passive RFID, Stack Lights, Alarms Alert! Tool# Operator Feedback is due for scheduled! calibration CASE STUDY: KITTING & SHIPPING A Specialized Aircraft Manufacturer worked with OAT to track subassemblies and whole goods being shipped directly to customers, integrated with their existing ERP system. This resulted in reduced costs for outbound shipping and reduced labor costs for preparing customs paperwork. Enrich Enterprise Systems with: Richer Asset Movement Data Real-Time Alerts Exception Handing

8 Don t Reinvent the Wheel. RFID middleware, applications, readers and tags have matured significantly over the past several years. In all likelihood, the business challenge you are facing has been faced before and resolved. Ruggedized tags and readers have simplified the implementation of RFID in harsh, industrial environments. Sensor data management (tracking 1000s of asset movements per day) and enterprise systems integration have been streamlined with sophisticated RFID middleware platforms. Experienced solution providers have implemented dozens of RFID projects in similar environments to your own. Using proven hardware, a proven RFID application platform and working with a seasoned partner can shave months or more off your project plan. The diagram below illustrates the benefits of using an RFID application platform to process real-time events locally and to add business context to high volumes of sensor data. HOW RFID MIDDLEWARE PLATFORMS MANAGE REAL-TIME SENSOR DATA Packaged RFID and RTLS applications can simplify deployment even further. Choosing a configurable application that is built with a proven RFID platform will enable your project to easily scale and adapt as your business needs evolve. The most common RFID/RTLS packaged applications for manufacturing, logistics and service operations are listed below: Tool Tracking Container (RTI) Tracking Kitting Work Order Tracking Line-Side Replenishment Work-in-Process Tracking Indirect Material Tracking ATA 2000 Part Marking Shipping & Receiving Whole Goods Tracking Yard Management IT Asset Tracking Equipment/Lab Tracking Cycle Counting Directed Put-away

9 (cont.) Don t Reinvent the Wheel. With more companies adopting RFID technology, there s no need to start from scratch with custom deployment, or a protracted tag research project. Configurable RFID Application Platforms often come with pre-packaged workflows which can be easily tailored to meet your needs. EXAMPLE: RFID-ENABLED WORK ORDER TRACKING PROCESS Receive Work Order #, Bill of Materials Validate Components in ERP System OK? Send Work Order Data to Station 005 Alert Operator with Stack Light Work Order Data Fields: Order # Line Items Quantity Customer # Operator Tooling Requirements Allocate Inventory Start Assembly at Station 005 Receive Order Data & Create Work Instructions for the Line Items Send New Order Information to Work-Instruction Management, Including Current Locations of Items Required by Order & Available Quantities Update Work Order Status in ERP System CASE STUDY: BATCH TRACKING A Process Manufacturer was experiencing errors on a new product line: Product formulations with specific batch # and lot # attributes were often blended incorrectly, resulting in high volumes of scrap material. The company worked with OAT to track raw materials and finished product through manufacturing to distribution and to customers, integrated with its existing ERP system. The resulting system provides automated tracking of raw materials and finished product, significantly reducing scrap material and increasing warehouse efficiency. Jump-Start Your RFID Project with: Packaged Applications RFID Middleware Customizable Workflows

10 Prepare to Succeed. Success leads to more success, so make sure you re not stuck with throw-away technology when you re tasked with a broader charter. Ensure that you ve built in plenty of room for growth, with an application platform that can scale to the enterprise, and with configurable software that can be easily adapted to different use cases, business units and facilities. The following diagram illustrates how RFID Asset Tracking can provide increasing value to the organization. RFID projects are often justified based on the benefits of locating a critical asset (Step 1). Once the project is implemented, however, additional benefits based on exception handling and error-proofing (Step 2), associating data with key business metrics (Step 3) and continuous improvement (Step 4) are often realized as well. Preparing at the outset for this level of visibility and value can help ensure a scalable solution that fits the enterprise s needs in the long run. ASSET TRACKING: GROWING THE VALUE PROPOSITION Example: Using a Tool Tracking Business Case 3. What is the Asset Producing? 4. What Could the Asset Be Doing? How can we do it better next time? Continuous improvement metrics Assembly status Program status Order status Working capital allocation 2. What is the Asset Doing? Haz Mat requirements Calibration status VMI, Right-of-Use 1. Where is the Asset? Critical customer order/ service due Imminent auditor visit Potential production delay Future-Proof Your RFID Project with: Scalability Flexibility Reporting Metrics

11 About OATSystems. OATSystems has helped over 100 companies take advantage of RFID and RTLS to streamline operations, enhance customer satisfaction and increase bottom line results. OAT is the recognized Auto-ID solution leader with software that empowers businesses to achieve a competitive advantage and ROI from RFID & RTLS. As a pioneer in the development of Auto-ID technology, OAT has been setting the standard in RFID over the last decade and has provided RFID & RTLS-enabled solutions to leading companies such as Airbus, Monsanto, Parker Hannifin, Chevron, Kimberly-Clark, Cephalon, Shell and others. A division of Checkpoint Systems (NYSE:CKP), OATSystems is located in Waltham, MA, and has a development office in Bangalore, India and various direct sales offices and resellers around the globe. Contact OATSystems today at or and get ready to take control of your operations. For specific information on Asset Tracking applications, visit Corporate Office: OATSystems 309 Waverley Oaks Road, Waltham, MA USA