RFID to reduce loss on returnables

The Joint Automotive Industry Forum (JAIF) has drawn up a new set of guidelines for RFID tracking and tracing of returnable containers in the supply chain.

 

The Global Guideline for Returnable Transport Item (RTI) Identification is the result of a project looking into problems affecting ownership, maintenance, losses and special shipping charges.

 

JAIF is a working forum that includes North America’s AIAG (Automotive Industry Action Group), JAMA (Japan Automobile Manufacturers Association), JAPIA (Japan Auto Parts Industry Association) and the European automotive industry action group, Odette.

 

The project, which was started in 2007 and completed in August this year, drew on the expertise of those involved in automatic identification and data collection standards, EDI and material handling, as well as returnable container suppliers and providers of automatic identification solutions.

 

Companies were asked ‘Does your facility have a problem with returnable containers?’ and 76% companies confirmed that they encountered problems with the industry spending millions of dollars per year to put them right. Of those problems, 36% were related to operational downtime because of a lack of containers while 28% were the result of missing materials or containers.

 

The five-year study found that the percentage of container budget expended by companies to replace non-disposable containers and racks is greater than 7% and that industry cost to cover problems associated with reusable racks and totes is well above $750m annually in North America alone.

 

It was also found that ‘lost’ returnable containers would continue to cause supply chain downtime and loss of productivity until an adequate system was introduced to gain greater visibility.

 

As was revealed during a dedicated to session on packaging at the recent Automotive Logistics Global conference in Detroit, the figure for loss rates in North America is similar to that in Asia, with as much as 8% per year across regions. But when it came to visibility Chrysler packaging engineer Camille Chism said that the results of a survey of tracking methods completed by Global Engine Manufacturing Alliance (GEMA) at the beginning of 2009 showed a decided lack of RFID methods. “I did not get anyone to respond that they were using RFID at that point,” she said.

 

Visteon’s global manager of packaging engineering, Tim Nickel, added that the industry needed to “install a mindset of cooperation”.

 

JAIF has now provided guidance for the use of RFID in the handling and tracking of any size of returnable container using a single passive RFID tag as an asset identifier.

 

“You've got to have something for people to go on before they can adopt the technology," said AIAG's program manager for supply chain management, Morris Brown, ahead of the release of the guidelines. “Hopefully, people will use the guideline as they look into the technology on a pilot basis."

 

According to the AIAG it complies with all relevant ISO standards to ensure global cross-border and cross-industry operation and is applied on top of existing mandated safety and regulatory demands.

 

By looking at the replacement costs of returnable containers, an increased visibility of shipments and a reduction in the lost shipments, JAIF states the potential benefits involve increased uptime for automotive production and better line scheduling.