RFID IN THE AUTOMOTIVE PARTS SUPPLY CHAIN
Most automotive parts distributors and suppliers have heard of RFID and may already use it in their warehouses
RFID technology is based on Radio Frequencies received by a RFID scanner which communicates via a signal transmitted from the tag/label antenna.
This permits a signal to be read from the RFID circuitry, transmitting information encoded in the tag. Some of this information is mandatory, and some information can be user defined relating to the product or business processes.
Scanning a large number of items when performing inventory processes like receiving goods, picking items or stocktaking using a standard barcode can be time consuming.
Using RFID technology can scan multiple items, making it faster and therefore more efficient than the more common barcode scanning technology.
As such, it is especially important for parts suppliers with large inventories and/or regular movement of goods with high value items to consider investing in RFID technology to streamline their supply chain.
Case Study: CFI Australia
CFI Australia warehouses a large number of inventory products using RFID labels to manage inventory control.
These products are distributed all over Australia, New Zealand and Fiji through a service network. CFI Australia is responsible for monitoring serial numbers for warranty processes, so accurate tracking is essential.
CFI Australia’s ISO 9001 facilities and operations serve as a benchmark in automotive parts distribution. Chief Operations Officer Mike Hadathy has reportedly implemented significant changes over several years resulting in continued growth for the company which also provides a 3PL service consisting of handling small components and pallet break down.
Across his varied career, Mike had obtained experience with barcode data capture solutions, labelling applications and ERP systems like SAP.
He was also experienced in RFID Technology and assisted in its implementation at CFI Australia, overhauling its inventory management methods by adapting RFID quickly into its existing barcoding system over a six month period.
As part of the implementation, CFI Australia has benefited from SATO RFID Printers providing a quick labelling solution with encoding product information using specialised software; ReCapture Software Development; DENSO RFID Scanners; and Fixed Reader options.
The existing barcode system had been time consuming when inventory control was needed, with scanning a single 1D barcode and manually counting items creating a ripe environment for human error while having to scan every single serial number for stocktakes or handling orders could take several hours – for a full stock take of high valued products including serial number records, this could even take a full day. With the new system, inventory control reduced from a full day of counting to a two-hour operation.
In addition, inventory control for missing products could hold up processes and create delivery delays. For instance, previously if the warehouse was short of a part number linked to a serial number, trying to find the item was like looking for a needle in a hay stack.
However, with the RFID system, missing items can now be identified when placed in the wrong location throughout the warehouse as RFID Technology provides a scanning option when looking for a missing item, similar to using a metal detector. Meanwhile, the DENSO scanner alerts you if the missing item is near, so you can find its location.
As a result, the new system has saved CFI Australia not only time, but also costs, labour and shipping time.
It has also increased its productivity and stock cycle counts which has benefited its stock management processes with inventory control currently sitting at 99.5 percent.
The benefits of this are clear – having accurate inventory means customers can receive products listed in stock and products can be easily identified for picking.
To undertake the implementation, CFI Australia worked with Recapture which provides consultative advice on data capture hardware and software, including RFID scanners, RFID label printers, consumables (RFID labels and tags) and accessories.
To find out more about how CFI Australia manages their inventory and stocktake procedures with RFID, call CFI Australia on 03 9267 8700 or email email@example.com