Excess and Obsolete Inventory: Everybody’s Responsible
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Having just attended the RFID Live 2013 conference in San Francisco, I was reminded of the myriad applications for RFID in tracking assets, monitoring systems and transmitting key data to and from sensing and recording devices. As I considered the potential uses of RFID technology for purchasing and operations people, I mentally formulated an end-to-end supply chain solution that could be developed and implemented with the help of some convergence with existing infrastructures and technologies. Let me know what you think but first some background:
In a relational database such as an MRP system, there are keywords or flags that tie the various data tables and fields together. A purchase order (PO) number field would be a key entry that would cross reference all of the data entered onto the PO. In a fully relational database with thousands of tables, the key fields on each table become the central points of reference with all relative data associated.
One would not use a line item number on a purchase order as a key because every PO has identical line item numbers. In other words, the text phrase “Item 1” would be on every single PO. The search result using the operator “Item 1” would bring up every PO in the database. That search would be useless. However, the line item itself is a specific part ordered by manufacturer’s name and manufacturer’s number, quantity, due date etc. So here is my idea:
The supplier uses passive (not battery powered) RFID tags associated with each shipment. These augment the paper barcodes already attached. The outer carton RFID tag data includes a list of inner contents sub-tags by line item filled on the PO for this particular shipment. (A passive tag can hold up to 2KB of data or approximately 400 text words of average length.)
Here is where it gets innovative for the supply chain: Many of the carrier logistics companies like FedEx, UPS, TNT, USPS, have tracking websites that if the buyer has received the shipping number he or she can get on the site, put in the number and find the status (whereabouts) of the shipment, but will not know if the shipment contains all of the line items, or if there are back orders for an incomplete quantity for a line item.
Also, if a common carrier’s customer signs up for push notifications, when the order ships, the email is updated every time another scan is performed along the supply chain. (Better than just having to open the tracking website and performing a top level (outer carton) search.)
PROS of existing tracking technology: Faster and more reliable than just waiting for the supplier to call and notify of the shipment. (The call may or may not happen.)
CONS of existing tracking technology: No information on inner carton contents as picked and packed by shipping department. No line item level delineation and consequently no partially filled order notifications to the buyer. This results in very unpleasant surprises when a build is scheduled and not enough product comes in to complete a kit. Last minute alternate searches and expedites or short builds disrupt factory flow and allocate human resources under duress.
Proposal with RFID, custom API, and some intellectual elbow grease: When a purchase order is created with the associated line items and quantities, have a company coded script run in the enterprise system such that a clone of the PO is pushed to a cloud location with no backend attachment to the enterprise system. (Physical firewall). Having prepared for this system, every line item is automatically assigned a computer generated UID (unique identification number) including PO number and date of order. This data is forwarded to the supplier at the time of the order and uploaded to the company cloud. These data fields also become part of the content of the RFID tags for the inner carton contents.
The supplier imports the tag data into the order fulfillment process software and anytime the item is picked and packaged, the (Warehouse Management System) polls the order fulfillment data and prints the RFID passive tag inclusive of the PO number, line item number, quantity, and -- at the time of shipment when the tracking number is assigned, the tracking number is written into the tags as well. Now the outer package RFID tag contains the parts, the quantities, the PO number, line item number, and the tracking number.
The supplier’s email push notification is sent to the receiving company’s cloud portal and the PO number becomes the key match point where a dynamic, real time table is updated with every scan along the carrier’s route and supply chain. A push notification also goes to the email of the buyer of record so the buyer can access the updated tracking table via a quick email embedded link with password to determine what exactly is in transit at line item resolution. The initial scan would reveal a partial shipment and an early heads up to expedite or place another order with a different supplier. At the very least, the buyer can call the original supplier and find out why the order was shipped short and what the immediate remedies are.
Bonus benefit: Because the cloud data is a permanent record cross referencing due dates with actual delivery dates, the data can be mined for supplier performance reliability analysis.
When the parts actually reach the customer, there are no surprises, no emergency, last minute actions required as with this application, the RFID technology has just given greater visibility of the individual links relevant to the transportation and handling logistics of the supply chain.
This RFID enabled enhancement for purchasing would yield an incredible efficiency and accuracy gain for businesses across all industry sectors. Wouldn’t this implementation make your job as a buyer a lot more pleasant?
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