UPS pilots an RFID rollout

Managers say testing opens up opportunities

How is UPS, one of the world’s largest logistics companies, approaching RFID? Like many companies, it’s launching pilot deployments to better understand the business case for a wider rollout.

“Understanding how RFID can impact our business processes through efficiencies or faster, better information is the challenge we face today,” says Bob Nonneman, an industrial engineering manager at UPS.

The company recently began a series of RFID pilot tests both in its package delivery business and its supply chain solutions business, which serve many customers who must comply with upcoming RFID mandates.

In one pilot, Nonneman says, passive RFID tags are replacing bar codes on reusable fiberboard tote boxes used to shuttle packages through UPS’s automated facilities. The goal is to extend the life of the tote boxes and to reduce the read-failure rates of the barcodes, which tend to wear off over time. In another pilot, RFID tags have been attached to UPS trucks in an effort to cost-effectively monitor vehicle activity moving on and off the property at three different locations. “The goal is to eventually automate our arrival and departure process,” Nonneman says, “through an integration of RFID technology, wireless technology, and potential electronic lock technology.”

Much of the work to date has involved tinkering with the details of specific applications to achieve the right cost and performance trade-offs, Nonneman explains. For example, UPS has tried to balance the longevity of the tote box with the life of the tag, or to balance distance from the reader with the speed of the truck. Another challenge has been reducing the high rate of reader failures.

“The manufacturers have quite a ways to go. We’ve had quite a few failures out of the box,” Nonneman says. But he notes that reader manufacturers are constantly leapfrogging one another and recently have come out with so-called “agile” readers, which are software upgradeable and can support multiple protocols. He also says reader performance has been highly application-dependent, and choosing the right reader for an application is a key success factor.

Integrating RFID with UPS’s software systems has not been difficult because unlike most enterprise software applications, UPS’s code is already designed to uniquely identify and track individual items and capture all the data associated with them. “Moving information along with the goods is nothing new to us,” he says.

Based on the successes so far, Nonneman sees many opportunities for UPS to expand its use of RFID; for example, in the handling of hazardous materials and high value items, which currently require more human involvement. “RFID can provide double-checks without a lot of human intervention,” he says.

Nonneman’s advice for companies thinking about RFID? “Just get started,” he says. “Choose a pilot that’s small and manageable ... once that snowball starts rolling, it’ll pick up speed on its own.”

Copyright © 2004 IDG Communications, Inc.

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