Vanderlande Industries offers solutions for storage, distribution, express and parcel services, baggage handling, and the production industry. The enterprise also produces cross-sorter belts, primarily used for large distribution centers and express handling operations. The cross-sorter currently uses the barcode on packages and boxes to identify the products and to direct them through the right exit on the cross-sorter. Vanderlande integrates RFID information into its process management software to automate the material handling systems at distribution centers, airports, and sorting centers for express logistics.
Therefore Vanderlande approached Capgemini to help the enterprise identify how RFID technology could be of use for this kind of cross-dock operations. First, the enterprise wanted to explore the impact on the different software systems like back-office and cross-docking management systems. Furthermore, it wanted to be prepared when its customers asked for RFID support on the cross-sorter systems. This led to a discussion in which Capgemini also approached SAP to identify how it could help Vanderlande with the setup of the system and to create a platform where the parties involved could explore the implementation of RFID and leverage this with customers. A blueprint was made in October 2004, and the realization started end of January 2005.
Bridge between theory and practice
The RFID Experience Center was opened in Veghel on April 14, 2005 with the aim of demonstrating RFID in the live environment of a distribution center. The initial installment of the center took about 2.5 months. The Center has been designed as a bridge between theory and practice. It is the product of collaboration between SAP, Capgemini, Vanderlande, Tyco, Intel, Philips and HP. Together, they want to show how RFID can change the logistics process. The partners bring different skills to the table: SAP is responsible for software and support, Vanderlande delivers the cross-sorter and hosts the environment, Capgemini offers SAP and RFID consultancy and project management, Tyco delivers RFID readers, Intel provides the noFilis RFID middelware solution, UPM raflatac and Philips deliver tags based on Philips chip technology, and HP administers servers.
The center offers a portfolio of consulting, technology, and outsourcing services. Visitors will find a complete cross docking distribution center that enables them to track every step of an exemplary logistics process at first hand. By seeing a concrete, practical example, they can understand what RFID could mean for their own organization. The benefits – increased productivity, improved quality, less obsolescence and less inventory –, as well as possible problems such as read rate influencing factors (fluidity, metals) are run through on the basis of their own example. It is even possible to run a physical test based on own products and to discuss the outcome for a customer’s business case. “The business case for the implementation partners is the marketing exposure and the opportunity to show how RFID can be a breakthrough in the industry, for example retail, manufacturing and logistics,” says Ard Jan Vethman, Global RFID lead Capgemini. “Only when a client sees the combination of quality, efficiency and visibility improvement in a real life setting, he can start to reflect on what this means for his organisation.”
Technology that really packs a punch
The center is now utilized to educate (potential) customers on three different aspects: How does the technology of RFID work? How can RFID be integrated into a backbone SAP application, for example mySAP ERP including SAP LES? What is the business case behind RFID? The partners invite enterprises to have a free session of half a day that includes a presentation on the latest status of RFID, an explanation of the business case, and a visit to the RFID Demo. After this, an in-depth discussion takes place on the specific areas of RFID that could be of interest for the particular customers, who can use this detailed information to create their own vision of the RFID’s potential in their organizations. Normally, the session starts with a discussion on the general potential benefits, after which the group tries to verify these potential benefits by the business process of customer’s own organization. Normally this leads to insight on the specific benefits and the challenges which have to be faced, including problems and their possible solutions. Some companies for example used the outcome of the discussion to start some internal investigation on the possible impact of an RFID implementation.
In the Vanderlande Innovation Center building, which is about the size of two soccer pitches, different material handling equipment is set up for test purposes. At the cross-sorter, which measures about 30 by 40 meters, the customer can run through a complete cross-dock process. Here, two pallets with goods are received from two vendors through a receiving gate. Without any human intervention, the RFID tags are read and transferred to the SAP Auto ID Infrastructure (AII) software. It receives and processes the electronic data of the receiving devices in real time and links the read information directly with the business processes. If there is a 100 percent read rate, the goods are received as a goods receipt in the SAP backbone application. If there is a less than 100 percent read rate, the operator is informed and transfers these goods again to the receiving gate.
Afterwards, three customer orders are created, based on the goods just arrived. A pick wave, a grouping of the customers orders which need to be picked in one run, is created, which is sent through SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI) to the Vanderlande cross-dock software. The operator brings the physical goods to the infeed of the cross-sorter, where they are placed on the sorter belt. At the infeed, an RFID reader scans the goods. Based on the RFID code, the Vanderlande software detects the unique item and connects it with the right customer order. Since every customer is connected to a unique exit, known as a “chute,” the Vanderlande software knows where to place the goods. When all goods have been sorted, the operator packs them on a roller container which is also tagged, and gives the confirmation at the chute. As a result of this confirmation, Vanderlande sends a pack confirmation to mySAP ERP and SAP AII via an interface using SAP NetWeaver XI. It also posts the information about which unique goods – the RFID tags – are placed on which container for which customer. Finally, the visitors group walks through the gate again to place the goods in the truck for shipment. By pulling the container through the gate, the goods are issued, the invoice is sent and an advanced shipping notification containing the RFID data is sent to the customer – all by using SAP.
The first year has been a journey
Since its opening in April 2005, more than 200 customers have already visited the center. “Of these 200, some 20 customers are currently working already with RFID, using components of different suppliers including suppliers which participated in the set-up of the experience center, and we are holding discussions with some 20 more customers on how to get to the next step,” says Vethman. There have been several upgrades to the environment, which has now finally reached the level of steady deployment. This is a result of the implementation of the Generation 2 UHF tags. This latest generation of tags has brought more reliability and speed to the process. The recent upgrade to Generation 2 took about three weeks, including a lot of additional improvements such as a read rate improvement, and on-line/real-time visibility of the read rate on a hand held device.
The upgrade to Generation 2 tags now makes it possible for tags and deliveries to be identified without extra manual identification in the system. Finally, the Intel noFilis solution has also been implemented to improve the reader device’s management. “We can now demonstrate a solution that is ready to be rolled out and that can have a very positive impact on the business of our customers. They also recognize this and have all reacted very positively to the extra information that they receive in a visit to the RFID Experience Center,” explains Ard Jan Vethman.
A hand-held solution has recently been implemented so that the warehouse employees are empowered to solve mismatches directly, for example when not all the expected boxes are delivered. “We demystify RFID for our customers and make it reality. We are confident that we can demonstrate the full power of RFID and that we really can identify true benefits for our customers by applying RFID,” says Ard Jan Vethman.