Winning With Wireless

Dec. 21, 2004
In manufacturing, going wireless means developing a strategy for tracking what matters most -- via technologies such as RFID (radio frequency identification), bar codes and machine monitoring. The results revolutionize the enterprise.

Wireless accelerates supply chains, boosts revenue, empowers lean manufacturing and simplifies the task of locating and tracking inventory and assets. Wireless technologies also are supporting remote monitoring, predictive maintenance and machine control functions. In addition, wireless features are becoming an integral part of some products, adding value throughout their service life. The challenge lies in researching, selecting and executing the most effective wireless strategy -- fast. How fast? Consider how quickly wireless fantasy moves to wireless possibility: In a now-classic IBM television commercial first aired in October 1999, the camera follows a browsing retail customer who wanders from shelf to shelf stuffing items in his coat pocket. As he begins to walk out the door, a security guard stops him by saying: "Sir you forgot your receipt!" The ad's presumption is that wireless product identification technology had eliminated the need for conventional checkout lines! Today, retailers could use RFID to make that a reality. To gain a perspective on just how ubiquitous wireless will become, consider the office of the future envisioned by IBM Corp., New York, and Steelcase Inc., Grand Rapids, Mich. Their evaluation project, called BlueSpace, uses sensors and wireless technology to create an interactive office environment that automatically adapts to the needs of the occupants. Steelcase says the intent is to provide an environment that facilitates productivity via employee comfort and personalization. Some of the BlueSpace components are beginning to enter the market. The RFID Revolution The Auto-ID Center for RFID opened at the Massachusetts Institute of Technology (MIT), Cambridge, Mass., in 1999 and began field tests in 2001. The Center's self-described mission is to "assemble the building blocks to create an Internet of things." To accomplish that, the Center is designing an infrastructure and developing RFID standards to create a universal open network for identifying individual products and for tracking them as they flow through the global supply chain. (Vendors are now ramping up production of hardware based on the Center's specifications with the goal of having hardware and software commercially available by the fourth quarter of 2003.) Like bar codes, RFID offers automatic data capture. But unlike bar codes, it is not a line-of-sight technology. The antenna on the RFID microchips transmits the identification information to a reader that converts the radio waves returned from the RFID tag into a form that can be passed on to computers that can make use of it. While a bar code scanner has to "see" the bar code to read it (which means people usually have to orient the bar code toward a scanner), RFID codes can be read as long as they are within range of a reader. "That automates the process, increases data accuracy and reduces the cost of gathering information," says Kevin Ashton, executive director and an executive-on-loan from Procter & Gamble Co., one of the Center's three founders. (Gillette Co. and the Uniform Code Council, which administers bar code standardization, are other founding sponsors; today sponsors, both end users and vendors, number almost 100.) The Center's goal stretches beyond cost cutting in the supply chain. It embraces the revenue-producing efficiencies made possible by using microchips and radio waves to automatically identify individual items down to and including the retail level. Those opportunities exist in every step of a product's passage to a customer. The benefits can start in the manufacturing plant and even can provide unique value while the product is in service. For example, wireless is a key feature of an "intelligent" bearing announced by the Timken Co., Canton, Ohio. Now in test for rail car applications, the Guardian bearing "has the potential to detect, earlier than by current methods, damage to bearings, wheels and tracks that can lead to derailment," says Sam Williams, chief engineer-rail. The self-powered sensing system transmits data (speed, temperature and vibration) to a receiver located on the train. The data can be stored locally or networked with onboard or off-site computers for immediate action or stored for further analysis. "We have introduced the next generation of technology that will revolutionize the rail industry," concludes Timken's Thomas S. Dupaski, president-rail. Remember the IBM television commercial predicting the refrigerator with enough intelligence to wirelessly call for service when needed? For production equipment, that, too, is becoming a reality via an industrial consortium led by Jay Lee at the University of Wisconsin, Milwaukee (View Machinery As 'Functional') The Auto-ID Center's vision is of a world where computers will be able to identify any object, anywhere, instantly, says Ashton. "Put a tag -- a microchip with an antenna -- on the product to be tracked, and suddenly a computer can 'see' it." By 2001 the Center and a group of its sponsors launched its first field test within a real-life supply chain. Pallets, carrying inventory such as paper towels, were embedded with RFID tags carrying unique Electronic Product Codes (EPC). The trial is still under way with 11 participants, including manufacturers, retailers and technology partners. The intent is to test RFID's ability to bring maximum transparency and clarity to an entire supply chain. Information Or Myths? Data accuracy, actually its absence, is the critical issue for Ashton: "To a surprising extent, businesses operate today on information that has the quality of myths. The arrival of RFID will, in effect, turn on the lights and identify what is really happening." His example: "Contrast the discrepancies you get from talking to a typical vice president of supply chain with visiting his or her warehouses. "Often the vice president of supply chain will describe a new perpetual inventory system that provides 98.5% accuracy. That executive will brag about achieving two days to customer and boast 'it's not a warehouse anymore, it's a distribution center!' "A reality check at the warehouse may disclose something quite different. The possibilities: seasonal items from five years ago piled in one corner, nobody knows where everything is, and that everything gets 'touched' 15 times between entering and leaving the warehouse. "Tragically, the supply-chain executive may not even be aware of those warehouse scenarios -- that manager's numbers may not provide a clue." He says the success of the Auto-ID Center will be built on those kinds of enterprises finding out what they don't know. Ashton says the immediate implications of RFID are cost efficiencies through data availability and the elimination of bad information. "For the first time, we will really know what the supply chain looks like. But that's only the beginning. It will eventually mean a whole new way of doing business." He foresees "a revolution in how products are manufactured, tracked, sold and recycled." RFID technology has been around since World War II, but existing RFID implementations are usually closed-loop proprietary systems. A typical scenario is the company that is tracking goods that never leave its own control. To be effective throughout a supply chain, standards need to be established for such system components as RFID readers. The second challenge is cost. The electronic tags cost about 30 cents each, substantially above the 5 cents most analysts think are appropriate for most packaged goods sold at retail. Yet the cost should be considered in terms of what the technology can solve. For example, how did Gillette Co. justify its January order of 500 million RFID tags from Alien Technology, Morgan Hill, Calif.? Very clearly, Gillette sees a revenue connection in RFID. "We have a very simple goal for Gillette products," says Paul Fox, Gillette's spokesman. "We want the products to be on the retail shelf when and where the consumer wants to buy them. The reality is that today, that is not the case. It is a severe problem, which many, many companies within the consumer-product goods sector face." In the U.S. it is estimated that the retail industry is losing about $70 billion annually. Part of that loss, about $30 billion, comes from the product not being on the shelf. The other half comes from losses within the supply-chain environment. Fox describes those losses as real or virtual -- originating from data inaccuracies prevalent in the supply chain. "For example, assume Wal-Mart orders a hundred cases of our Mach3 razor blades. Then when they arrive, the blades are mistakenly entered as 10 cases. As far as the inventory system is concerned, you've effectively lost 90. The same thing happens if those cases are mistakenly entered as shampoo. Theft is another factor." Fox says Gillette became a founding sponsor of the Auto-ID Center in 1999 to help develop RFID as a solution. For Gillette, the Center has a very simple goal -- create the 21-Century bar code by attempting to overcome the two characteristic shortcomings. First, bar codes classify items only by groups. Fox cites an example: "if we had 10,000 bottles of Coke, the bar codes on all of them would be identical. There would be no way to identify one or multiple bottles from the rest. The other disadvantage with bar codes is that they need to be scanned, a process that normally requires human intervention." With RFID technology, a tag containing an electronic product code could carry a unique serial number that could be matched to a pallet, a case of products or even to an individual item. And because it is electronic, it does not require human scanning. It can be done remotely. Tracking individual items through the supply chain becomes an easy possibility. In product recall situations, RFID makes it possible to locate only affected items. Since every item is given the ability to identify itself, products stolen in the supply chain are easily spotted when they reappear. The Center's catch phrase: "turning each object into a computer." Gillette is involved with four field trials, the first being the Auto-ID field trial. Gillette's second and third field tests involve two retail sites -- Wal-Mart at Brockton, Mass., and Tesco's Cambridge, UK, store. Both locations also are testing an intelligent shelf that can communicate the greatest of all customer annoyances, the empty shelf. A low stock situation either alerts management or actually initiates an order on its own. The shelves also could alert store management to conditions suggesting theft -- such as abnormally large amount of stock being removed at one time. While the Auto-ID Center's founders understandably have a bias for the technology's revenue potential in consumer-packaged goods, analysts see broader benefits. For example, Robyn Levine, principal consultant, RFID, IBM Global Services, cites one client, a truck manufacturer, that is employing RFID to identify trucks as they proceed through a 50 station assembly line. "The need to specifically identify each chassis is the result of off-line processes, like painting, that make it impossible to predict the progression of units on the line. With RFID, chassis delays in painting queues are irrelevant since RFID recognizes units as they reenter the production line." Asset Management In addition to boosting supply-chain velocity and visibility with RFID, other wireless applications also can solve asset-management issues, says Matt Armanino, vice president, business development, WhereNet Corp., Santa Clara, Calif. "The ability to quickly connect mobile workers with mobile operational assets helps accommodate variable customer demand." The company, founded in 1997, offers real-time locating systems for relatively complex, expensive parts and manufacturing assets. "Today's manufacturing is characterized by substantial investments in enterprise-level software systems that are intended to manage assets in an operational setting," says Armanino. "A decade or more ago, most of these systems were transactional. Today, data availability determines the effectiveness of these . . . systems." WhereNet's customer wins range from tracking and managing vehicles at Ford Motor Co. plants to locating trailers at a 230-acre facility of ES3 LLC, in York, Pa., a supply-chain services firm. WhereNet's application partners include GE Medical, GE Fanuc, Symbol Technologies, EDS, Unisys, FMC and Siemens. Typically the system works in tandem with wireless local area networks and bar code data-capture products to provide users with up-to-the-minute business information from a single, integrated tracking system. WhereNet says users normally experience a time-to-benefit of about 30 days and a complete return on investment in nine to 12 months. At ES3, wireless is a business model enabler, says Geoff Davis, executive vice president. "The critical advantage is that WhereNet's wireless location technology gives us instant visibility of all 1,900 trailer slots in our yard." By avoiding conventional manual tracking methods, Davis estimates that ES3 is able to get tracking information instantly with one-third of the labor requirement. "More importantly the risk of spoiled cargo, late departures, lost trailers and excessive detention are avoided." ES3 is a supply-chain services firm that co-locates inventories of multiple manufacturers. Wireless is breaking the boundaries of fixed machine monitoring and control. On the production floor, operator interface panels (aka HMI or human-machine-interfaces) are traditionally constrained by being machine or panel mounted. But what happens if a problem occurs on one machine or an entire line? An operator might have to walk hundreds of feet from the fixed control panel to the trouble spot and back again until the problem is solved. Manning both the trouble spot and the control panel doesn't solve the problem, and it increases injury risk. Even slight misunderstandings could cause serious harm to the employee at the trouble spot. Process equipment also could be jeopardized. Portable HMIs could be the wireless answer. Rockwell Automation, Milwaukee, suggests using them along with the fixed panel-mounted HMI. Users accrue at least three advantages, says the company. First, system downtime is reduced by the resulting faster machine set-up and changeover time. Secondly, time-efficient troubleshooting and maintenance reduce costs and keep machinery running better over the long term. Last, but not least, human and mechanical resources are protected. Rockwell offers portable HMIs in both wireless and cabled versions. In a pure maintenance context some plants find wireless monitoring systems especially useful when new or newly overhauled equipment is installed, says Lars Ruuth, business development manager, SKF Reliability Systems, Technology Ventures, San Diego. He cites a study indicating that infant mortality is common to 72% of industrial equipment. "The advantage of wireless equipment is that it is easy to deploy and can be quickly moved to monitor other equipment." SKF's wireless systems monitor and correlate vibration and rpm with specific machine events. Holistic Strategies The challenge in the diversity of wireless applications is to avoid the trap of point-solution thinking, says Peter Orr, director of product marketing, Epic Data Corp., Vancouver, Canada. "Whether it is bar code scanning or RFID, the need is to acquire a more holistic view -- to look at the capture of any enterprise information in the context of the whole supply chain. Try to avoid the thinking that says 'all we want to do with this information is to figure out how much material we have in the warehouse.' " Deciding on the data collection technology is becoming more difficult due to strategic consequences. While the Auto-ID Center indicates that bar codes will continue to offer value, its members are actively evolving an RFID revolution. One example is the supply-chain execution solution from the team of Manhattan Associates, Symbol Technologies and Alien Technology. "The value creation opportunities with RFID are significant, and the technology will change the face of business," says Manhattan Associates' Eric Peters, senior vice president, strategy, marketing and alliances. Adds Matrics Inc.'s Tom Coyle, vice president of supply-chain solutions: "The adoption of RFID into the mainstream of the supply chain is inevitable. A key to success with RFID is clever implementations; knowing the capabilities and limitations of the technology and making the best of these capabilities within your operations. Getting an early experience with this new technology is critically important. Only those end users who have first-hand knowledge will be able to maximize its impact on their supply chains."

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