Issue #13 | January 27, 2005

Still not convinced that RFID can bring ROI? Consider this: work-in-progress (WIP) manufacturing environments are utilizing RFID technology and despite the "in-progress" context, there's nothing unfinished about these results. CFOs across the manufacturing industry are waking up to the fact that RFID can dramatically streamline automated processes to increase quality and through-put.Some background: WIP projects are common in the automotive industry. If you've never set foot in an automotive factory, let me try to paint the picture. The assembly process is divided into multiple stages. During stage one, the vehicle chassis is placed onto something called a "carrier". A carrier is a steel frame with wheels. (Remember, the chassis has no wheels at this point and it needs to move around somehow.)

As the vehicle-in-progress moves from stage to stage, additional components are added onto the chassis until it's finished. Depending on the vehicle being built, there may be hundreds of stages. Not all auto manufacturers assemble this way, but you get the idea.

Here's where it gets interesting: A typical manufacturing plant may have thousands of partially assembled vehicles throughout the facility and it's extremely difficult to differentiate them without reading the serial number. The same applies for the components going on the vehicle.

Years ago, manufacturers began using bar codes to improve identification and tracking. But there was a rub: bar-code printed labels don't hold up well enough under manufacturing conditions and bar codes etched in metal don't read accurately. Additionally, as components are added, the line of sight to the bar code can become obstructed, therefore making it nearly impossible to obtain an already difficult bar code scan.

In a typical WIP application, an assembly line worker using a bar code gun scans the vehicle barcode to let the manufacturing system know that it has entered a stage. This manual process may only take a few seconds (assuming an easy scan) but those seconds add up over the course of a day.

The real glitch comes when someone forgets to scan the bar code. Not only can this omission cause mistakes in tracking and metrics, but it can mess-up a special order. Most manufacturers build special order vehicles on the same line as the other vehicles. Further tracking challenges arise if the vehicle is removed from the line due to an exception, such as damage that requires repair. The vehicle bar code must be scanned again once it's moved to the repair area. This re-scanning is one of the most commonly forgotten actions.

Enter RFID. RFID technology replaces, or complements, the bar code technology because it offers benefits such as:

greater durability of the RFID tag than a bar code label;

no human intervention for scanning,

no requirement for line of sight capability;

faster and more accurate read rates.

Manufacturing environments are harsh places for equipment. In these solutions, the RFID tags must be encased in plastic or another durable material to help it withstand dirt, oil, washing, temperature variances, and physical impacts. The tags have screw holes for mounting directly on to metal carrier.

For you purists reading this, yes, you can mount RFID tags directly on metal so long as there is minimum 1/8" inch distance between the antenna and the metal. Otherwise, the tag will short out and not function.

The tags I've used cost around $3.00 each. At first blush, that may seem expensive, but consider that the tag, like the carrier, is used hundreds of times. So the per-use cost is less than a penny. That's a much better value than a single-use tag that costs 20 cents.

RFID antennas are mounted at each stage. At stage one, the bar code on the vehicle chassis is scanned and is associated with the number on the carrier's RFID tag. After that, there is no longer a need to scan the bar code. The RFID reader automatically notifies the manufacturing system when a vehicle enters or exits a stage. For special orders, the RFID reader is connected to a computer that displays exactly what tasks are to be performed for the specific vehicle as it enters the stage. Once a vehicle leaves a stage, the stage number is recorded so that if a vehicle is taken off the line, the system knows exactly what stage to return it to.

What gives these RFID solutions an ROI? First, there are measurable benefits from time savings and error reductions. Secondly, the project costs are known. They are fixed assets (readers, tags, cables, etc.), installation and integration services, and minimal on-going support costs. Based on these savings, it doesn't take a CFO to determine how long it will take before the ROI occurs. I've seen an ROI in as little as 12 months since errors involving vehicles can cost thousands of dollars each.

The moral of the story? ROI isn't about the destination; it's about the journey.

Written by Louis Sirico
Copyright ? 2005 Louis Sirico