Managing a successful reusable pallet or packaging program is a complex business. To suggest that a singular cure-all such as 3rd party rental/management or RFID (in the absence of a more holistic approach) will solve the lion’s share of inefficiencies is to do a disservice to customers. The reality is that reusable assets require significant management effort within and among organizations. Reusables spend much of their time “behind enemy lines” in the domain of trading partners that may or may not have any formal incentive to manage them with care. Just because a pallet or container has an RFID chip, there is no guarantee that there will be readers to track their movements, or that there will be any accountability or resolve for their return.
There is a larger, commercial element that is required to ensure the success of RTI initiatives, with or without RFID, and to be sure, there are other variables other than asset management that drive interest in RFID. With this in mind, we welcome the comments below of Angus Wofendale of Foxwood, in response to the Motorola white paper on RFID for RTI management.
This White Paper provokes me to write on two counts:
I recognise that “Returnable Transport Items” is a commonly used term to describe durable equipment used for the transportation of product. However, as to whether the items are “returned” is not inherent in the design – it is a possible outcome from the systems and procedures applied in any one supply-chain. The fact that items are frequently lost is testament to the fact that they are not necessarily “returnable”. I think the term “Reusable Transport Items” is certainly a more accurate description. The item designs and composite materials are specifically selected to ensure the items are robust and durable, enabling them to be reused many times over a working life. It is this capability that makes them a cost-effective alternative to one-trip packaging.
Commercially successful RFID applications are rarely about controlling RTI. The significant benefits come from the ability to enhance product visibility and control. I have previously been involved with the Marks & Spencer application of RFID, with tags affixed to their 6.5million plastic crates. RFID has dramatically improved:
Picking accuracy verification at Supplier ensuring the right product, with the right code-life, is despatched to the right DC
Advance notification of product despatch to downstream DC locations meaning picking operations can commence later, safe in the knowledge that product is on its way.
Reduced Goods-in checking time at DC, some “Gold Standard” suppliers do not have their deliveries checked at all.
These benefits alone have saved M&S £millions. They have not used RFID to control the plastic crates. The crates just provide a durable way of reusing the RFID tag.
Even if RFID tags are used to control RTI, perhaps where the RTI is of high-value and therefore appears to substantiate the investment in tags and portals, no RFID tag or even GPS device is going to prevent RTI theft or destruction. Being able to say that a specific RTI was delivered to a location and thereby making a claim for its return or replacement often fails, due to the commercial implications on the relationship between the parties. I have been in discussions with clients using steel roll-containers and IBC’s who have a very real problem of theft, especially with the World price of steel being so high. We are all aware that some large Pool Operators do take successful legal action against their clients, for RTI loss. But, it does not enhance the client relationship and has a detrimental effect on the Pooler’s reputation. Unfortunately the whole subject of RTI rarely gets the attention it deserves in commercial operations, where the principal focus is on moving and selling product. It’s not until the RTI stocks have run out that suddenly its critical supply-chain role is fully appreciated!