Drinks companies that want to get to grips with radio barcoding (RFID) without making a major financial commitment are being urged to join a new industry initiative designed to spread costs and share learnings.
The scheme, devised by consultant Rescu Solutions and software firm Spartan Solutions, is looking for drinks suppliers to support a six-month RFID trial designed to help participants build a business case around the technology without spending a fortune.
Rescu Solutions director Robert Ellis, who used to head up the supply chain function at whisky firm Whyte and Mackay, says the project will be set up at one of the participating companies and used as a learning forum for the whole group. A couple of companies are already on board, he says. However, the more that take part, the lower the costs to each participant. If 10 suppliers sign up, a £100,000 RFID project will only require a £10,000 investment from each party, he says.
"We recognise that drinks companies are reluctant to release major resources and funds even although they know that RFID could make their supply chains more efficient.
"They need encouragement to invest in a project where doubt exists over returns on investment, particularly when margins are still being squeezed. The implementation plan will include an element of live testing of various RFID devices to determine the best locations for tags and antennas, to pallet and case level."
It will then examine the impact on operations of tag fitment and reading, identify areas where process re-engineering will be required and study the implications of software integration to existing back end systems as well as look for internal return on investment.
"The aim is to highlight opportunities for the future incorporation of RFID into manufacturing and logistics operations, from bottling operations to warehousing or despatch to delivery," he says.
The project will also seek to link the supply chain back to raw materials suppliers and forward to warehousing and logistics service providers to understand how they are preparing for RFID, he adds.
"We will look at the possibilities for linking glass, corrugate and other bulk goods suppliers into the RFID infrastructure for automated receipt of goods. We will also investigate the possibilities for central buying for the UK drinks industry of tags, readers and software."
Tesco has not yet issued a mandate to suppliers and is currently focused on tracking goods between depots and stores, he concedes.However, the fact that it is kitting out its entire depot network with RFID tag readers is a pretty good indication that it will ask for case level tagging from suppliers at some point, he suggests (see pages 36-37).
"The problem is that people don't see the urgency because they haven't had a call from Tesco or Asda yet. But they will, and if they don't know what the costs and benefits are, they will be in trouble further down the line."
Pooling resources will help companies get the learnings while keeping costs to a minimum, he says. "We will tailor the project around what participating companies want. So if they want to focus on cases, pallets or, container loads, we can do that."
Jim Green at partner Spartan Solutions adds: "Going it alone means setting up a group untrained and inexperienced in RFID and learning on the job. This will lead to each company carrying the full cost of individual projects. By working together, common project elements can be carried once and the costs can be spread over all participants."