Tag, You're It

March 20, 2006
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HOLLAND — Herman Miller is using Radio Frequency Identification Device tags to keep track of its returnable packaging totes, which have a tendency to end up on the beach, under desks and in garages everywhere.

Suzanne Fisher, package engineering manager for Herman Miller Inc., said the company has had a problem with its returnable totes, which are used to contain various furniture parts, “walking off,” and has spent $300,000 to $400,000 a year on replacing them, due to damage, misplacement, attrition or introduction of new product.

“We were having trouble keeping track of our returnable packaging totes,” she said. “We thought if we had a system of trying to keep track of those, that would help.”

Though the RFID tags cannot help locate a missing tote that it is more than eight feet from the tag reader, Fisher said the system can determine the last place the tote was, which may help locate it. So far, Fisher said, the tags have resulted in a 10 percent reduction in purchases that would have been necessary if totes had been lost.

Fisher said Herman Miller initially began using the RFID system in June 2004, with parts for its Caper chair that were supplied by Techno-Coat Inc. in Holland. The next step is expanding the program to include another supplier that uses totes that are different than those that Techno-Coat uses. Fisher said the goal is to have that happen by this summer.

Proper tag placement on the totes initially was a concern, Fisher said, especially because the totes are stacked. After trial and error, she said they determined the tags should be placed under the lips of the totes, where they are protected.

“You don’t want to damage your antennae,” she said.

Using RFID instead of barcodes saves time and, therefore, money.

James Higgins, RFID specialist for Unified Barcode and RFID located in Palatine, Ill., worked with Fisher on the system. Higgins said that Wal-Mart, one of the first companies to use RFID on a large scale, determined that it costs a nickel for manpower every time a barcode is physically scanned.

“It would take a worker maybe a half hour to collect it all,” Higgins said of scanning each individual package on a pallet.

RFID, however, only has to be in the portal to be read, so it is not necessary to have someone physically scan each object; the information on the tag can be picked up without being visible.

“We collect that data in about six seconds,” Higgins said.

Higgins said RFID works best for those who need to track a high number of items very quickly or who have a large number of data collection points.

There are two kinds of RFID tags: passive and active. The passive tags need an energy source to function, while active tags have their own battery pack and can be read from farther away. The tags are read by sensors in the portal and information is relayed to a software program that keeps track of the data.

Passive tags can be read within eight feet of the reader and have a low cost (20 cents) or less) compared to active tags, which can be read from 100 feet away but may cost anywhere from $5 to $100.

RFID tags, active or passive, are really very small computers, Higgins said. The passive tags can hold up to 26 characters of data, while the active tags can hold up to 125,000 characters. Active tags can be set to monitor conditions such as temperature and ambient humidity, which can be used to monitor the condition of perishables, for instance, and other variables in shipping.

Higgins said the biggest challenge of RFID is the high expectations that people have without understanding the technology.

“People get very excited when they hear about the great things that RFID can do,” he said.

But the technology doesn’t necessarily serve everyone.

For instance, conditions of extreme heat and cold must be taken into account when determining the adhesive used. And the process of phasing in the system can be time consuming.

“Because this works well at one place doesn’t necessary mean it’s going to work well with you,” Higgins said. He suggests companies plan to phase in RFID over a period of time, slowly testing the technology.

“Many companies see the cost savings, and they want to run and they want to run fast,” he said.

Herman Miller has been balanced in its approach to RFID, Higgins said, starting with one supplier and gradually planning to add others.

While the project has cost Herman Miller between $16,000 and $18,000, Fisher said that prices have come down considerably since she began implementing the system.

“You could probably do it for half that now,” she said.

Though the new system has taken six to nine months to implement, Fisher said it will take less time to implement in the future.

“I’m hoping that we will adapt this type of technology in our products to help keep track of inventory in our products instead of just the packaging material.”    

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