The automotive industry has been talking up the potential of RFID for decades, but with budgets strapped, there appears to be no rush to bin the barcode
At the end of the production lines at Ford’s giant Cologne assembly plant in Germany, a robot places a passive RFID tag on each vehicle. Following end-of-line testing, the vehicles – coming out at a full capacity of 1,950 Fiesta and Fusion models each day – are then driven off, with the RFID tag triggering the raising of a barrier.
Also triggered by the RFID tag, a large display screen facing the oncoming vehicle then informs the driver of the destination to which it must be taken. There are three options: the plant’s rail terminal, its trucking compound, or its inland harbour.
In place for around three years, the plant’s end-of-line gate release system is a rare glimpse of the actual operation of a track-and-trace technology that many in the automotive industry and beyond once thought would be ubiquitous by now. Yet, 20 years or more in development, RFID seems fated to be permanently regarded as ‘the next big thing’.
A robust track and trace capability is certainly fundamental to the successful working to supply chains as complex as those of the automotive industry. Yet apart from islands of advanced technology such as Cologne’s gate release system, the industry is largely reliant on the barcode – generally in its familiar 1-D ‘vertical lines’ manifestation, a technology that is turning 58 years old.
And in terms of delivering a robust track-and-trace capability, the barcode leaves something to be desired – especially at a finished vehicle level.
“It’s amazing to many of us in the automotive industry that package delivery companies such as Fedex and DHL can offer a track-and-trace capability that works globally, whereas we struggle with ‘islands of information’ that only provide part of the track-and-trace picture,” says Rick DeMuro, Ford’s director of materials planning and logistics for Asia Pacific and Africa.
“Especially in terms of built-up units and finished vehicles, where the value is significantly greater than a typical Fedex air package, there’s a significant lack of global visibility,” he points out. “We have tools and techniques that tell us approximately where a vehicle might be, but not at the unit-by-unit level of precision that is required. Quite simply, the ability to track vehicles all the way to the final customer would be a great advance.”
It’s an advance becoming more necessary all the time. The severe downturn has resulted in what DeMuro describes as “a significant change of mindset”.
“We don’t ever again want to swamp dealers with inventory in the hope that they can sell it,” he says. “Leaner finished vehicle supply chains are essential: instead of 60 days of supply sitting at the dealer, we should be managing with 60 days in total [through the supply chain] – meaning that somehow, some day, we as an industry are going to need to do track and trace on finished vehicles. Dealers and automobile manufacturers need to know the information.”
In short, as the world moves into the second decade of the present century, it’s fair to ask: will the automotive industry ever wean itself off the barcode? Or, perhaps more simply, should it?
Barcoding has, after all, served the industry well. Take Miami, Florida-headquartered global transport and logistics giant Ryder System. Ryder delivers about 50 billion parts to lineside each year, with nearly all of them reliant upon barcoding for track and trace, says Jim Moore, the company’s vice-president for automotive, aerospace and industrial markets.
Collected from suppliers on scheduled pick-ups, a single pass of a barcode reader across an industry-standard AIAGcompliant label transfers a wealth of digital information, and serves to update in near real-time database records at both Ryder and the automotive manufacturer for whom the parts are intended.
“Once a part has been called, we track it for the life of the shipment,” he says. “Sometimes the location update is GPSbased, and sometimes it’s manual, sent over the web by cellphone to indicate that a ‘position point’ reporting milestone has been reached,” he says. “The fact that it’s barcode-based and not, for example, RFID doesn’t mean that we don’t have a very good idea of the status of every shipment.”
And the same barcode-enabled disciplined choreography that delivers inbound parts is increasingly finding its way into the aftermarket parts distribution chain. Ceva Logistics, for instance, uses barcode labels to provide track and trace of parts from distribution centres to the dealer, explains Jeff Hurley, senior vice president for automotive.
Totes and cages of parts are scanned as they are loaded onto the delivery routes, which confirms the build-up of a fulland- valid load, and which is then tracked to the dealer and scanned onto the dealer’s shelf.
The benefits of the approach are extensive. “It makes sure that all the parts picked for the order get on the truck, verifies that all the parts were delivered to the dealer, tracks the inventory of totes, and makes sure that none of the totes go out of the loop, and reduces shortage claims by dealers,” enthuses Hurley. “It’s a considerable improvement.”
Yet barcodes have their limits, which become more obvious when they are applied to finished vehicle logistics. Barcode labels attached to vehicles’ windscreens can be bleached by the sun, and obscured by frost or ice. And should it prove necessary to open a vehicle door to read the label from inside, there’s the ever-present danger of damage to bodywork.
Such limits would suggest using RFID, but it remains far from an industry-wide solution. Even at Ford’s Cologne plant RFID is used for just a part of the finished vehicle supply chain. Coupled with GPS or position locating technologies, for instance, active RFID tags (which require batteries, unlike the passive tags in use at Cologne) have been demonstrated to deliver improvements in yard management.
At Gulf States Toyota, for instance, a regional Toyota distributor in the United States, which distributes more than 190,000 cars annually to 145 dealers in the south-east of the country, active RFID tags from Zebra Technologies subsidiary WhereNet has been used to reduce vehicle processing times and increase effective capacity.
In Europe, the same WhereNet real time location technology has been used by Land Rover to locate routes and schedule finished vehicles through critical post-production processes to improve plant and driver utilisation, and on-time dispatch to shipping ports or dealers.
But not everyone is enthusiastic about RFID’s potential. At Van Buren Township, Michiganheadquartered Visteon Corporation, for instance, global director of material planning and logistics, Patrick Bauer, reports that RFID is not currently supported, “as we believe the cost outweighs the increased track-and-trace capability.”
On its own, RFID is little more than an electronic label that can be read in conditions where paperbased barcodes labels can’t be read – such as when obscured by frost, or dirt, or when subject to damage – but not without its own limitations including transmission and reception difficulties in metal-rich environments.
In simple terms, RFID offers no real track-andtrace advantages over barcode labels apart from a productivity increase that stems from not having to physically scan the label with a reader. In theory, RFID tags can be read remotely, simply by driving a truck past an RFID reader. Although tests don’t always achieve a 100% success rate, most experts reckon that in broad terms the technology is ‘production ready’.
This small productivity increase apart, RFID’s inherent track and trace capabilities only come from bolting-on other technologies to the basic RFID platform that must, in this case, take the form of the more costly (albeit reusable) active RFID tags, rather than passive RFID variants.
And it’s here that the cost-benefit analysis begins to crack at the seams. Take Land Rover’s WhereNet implementation, for instance. Although achieving enviable levels of track and trace, and delivering undoubted productivity benefits, the infrastructure investment has been considerable.
Besides around 4,000 active RFID transmitters, which are temporarily attached to new vehicles as they roll off the assembly line, some 50 magnetic ‘exciters’ positioned at key process points monitor the flow of vehicles as they move around the complex. Furthermore, a local infrastructure of 130 wireless location sensors provides positioning information.
In short, it’s not cheap. Enter another competing technology, GPS, which promises to provide location information without a local area network of location sensors: the GPS unit ‘knows’ where it is, and the active RFID tag to which it is attached can simply broadcast that information when prompted to by an RFID reader.
But even though GPS-enabled active RFID tags offer an undoubted theoretical track-and-trace capability, is it one that would actually benefit the industry?
Certainly, there are those that question the need. Richard Barker, managing director of London-based outbound logistics execution system provider Sovereign Business Integration, is certainly one voice questioning the logic of GPS-enabled active RFID tags as a track-and-trace technology.
“Does the industry really need to know every second of the day that a vehicle is in a compound along with 12,000 other vehicles? In practice, what it needs to know is when that vehicle moves,” he argues. “It’s the same with ocean, road and rail freight: you need to know when the vehicle is loaded and unloaded, rather than tracking its journey every mile of the way.”
Equally, he points out, there’s no need to track events and status update at the individual vehicle level, provided that logistics systems contain explicit links between individual vehicle and the means of transport.
“If there’s a change of arrival date or time, it’s more sensible to know it at the ship or train level, rather than at the level of the individual vehicle: the cost of equipping every vehicles with GPS-enabled RFID tags is high,” he points out.
Just as fundamentally, while individual vehicles might be able to communicate that they were late, any information about a revised arrival time must logically come from the operator of the ship, truck or train: the individual vehicle cannot know or communicate this.
Investments in RFID technology – GPS-enabled or not – are not going to be automatically waved through the approval process at Ford, despite the proven success of the Cologne investment.
“RFID will be used where it makes sense,” insists Howell James, Ford’s UK vehicle logistics manager. “At Cologne, particular circumstances helped RFID to simplify the process and make it more efficient. But we haven’t yet extended this to other plants, or indeed other parts of the outbound logistics process. Every capital investment project has to fight for funding, and be judged on its merits – even more so in this economic climate.”
For Steve Jones, group managing director of softwareprovider Vehnet, the issue is less to do with RFID versus barcode, and more related to the lack of track-and-trace systems to synthesise the data. While he notes that there are many large, global inbound providers, the outbound structure is different. “For inbound, all the shipments are flowing from a capillary network to a heart, a point of consumption, the factory. Outbound has few if any such global players and flow is reversed, from a central point to dealers, involving a multitude of carriers and modes, who are regularly changed by the OEM and do not have the financial horsepower to invest in systems.”
Yet the timing isn’t without irony. After years of debating how to handle RFID, industry-wide standards have now embraced the technology. Revision seven of AIAG’s B-11 RFID standard came out in July 2008, for instance.
“We’re now data-carrier agnostic,” says AIAG’s Michiganbased manager for supply chain management, Morris Brown. “It’s all about the data, not the device, and from an AIAG perspective, it doesn’t matter if it’s a 1-D or 2-D barcode, or an RFID tag.”
Industry body Odette, which has recently released a standard for tracking pallets (read p30), is also due to publish a standard relating to the use of RFID tagging in finished vehicle supply chains, reports the consortium’s managing director John Canvin.
The specification for RFID tag-enabled ‘smart labels’ will call for a wealth of detailed digital information, he explains: vehicle model, VIN, assembly plant, destination address, fuel type, date of production, transport handling requirements, and OEM-specific additional information.
Better still, the standard is one of three linked RFID standards embracing the entire automotive supply chain, which would, at least, offer the prospect of an industry-wide single track and trace solution.
But while a number of automotive manufacturers have reportedly expressed an interest in adopting them, the economic environment hasn’t helped. “Investment initiatives are being postponed,” says Canvin, ruefully.
Once again, it seems, RFID has a great future ahead of it – perhaps. No doubt, much will depend on whether OEMs move toward adapting global standards for RFID, something that for vehicle logistics has never really happened even for barcodes. “The vision has not been set by the OEM community to establish global standards for supply chain events,” says Jones. “That is far more important than mandating the use of RFID or barcodes."