newsworthy
RFID survey: mixed signals
NOT LONG AGO, THERE WAS MUCH CHATTER ABOUT WIDESPREAD
adoption of RFID. But if the results of a recent DC VELOCITY survey are any indication, many companies have still not embraced the technology, and a large share of
those who have implemented RFID are doing so by customer mandate.
An online study conducted among the magazine’s readers earlier this year
showed that while some companies have indeed adopted RFID, the technology has
yet to gain widespread traction in distribution operations. All told, less than one-third— 31 percent—of the 116 survey respondents said they were using RFID.
Many of those users appear to be reluctant players in the RFID game. When asked
why they began using the technology, the biggest share of the respondents— 39 percent—said it was primarily to comply with a customer’s directive. (In recent years,
several large retailers like Wal-Mart Stores Inc. and government entities like the
Department of Defense have imposed tagging mandates on some of their suppliers.) That was the case with Virginia Beach, Va.-based Navy Exchange Service
Command (Nexcom). Nexcom tags all of the ocean containers it ships overseas to
stores on naval bases (the tags contain information on who
owns the container and where it’s going). According to a
senior logistics executive at the organization, Nexcom is
tagging those containers in order to meet a Department of
Defense requirement.
Not all tag users are convinced of the technology’s value.
One survey respondent, the chief information officer of a
third-party logistics service provider that ships tagged cartons to three Wal-Mart DCs, questioned how much supply
chain visibility the retailer was actually getting from the
RFID tags. The CIO—who requested anonymity—noted
that instead of reading the tag when an item was removed
from the box and stocked on a shelf (thereby capturing data for replenishment purposes), Wal-Mart does not actually read the tags until it bales up the empty cartons
for recycling. Furthermore, he said, Wal-Mart does not require an electronic
advance shipment notification prior to the merchandise’s arrival at its DCs—which
indicates the mega-retailer is also forgoing the opportunity to use RFID to record
the receipt of goods upon delivery.
Technical difficulties
Although compliance with customer mandates has been a driving force in RFID
adoption, it’s not the only factor. Twenty-five percent of the survey respondents
said their primary reason for implementing RFID was to improve inventory tracking. Another 14 percent cited “increased supply chain visibility,” and 8 percent said
they used RFID to save money.
As for how RFID saves users money, one survey respondent reported that RFID
had helped his company slash shipping costs. Promega Corp., a Madison, Wis.-based biotech company, is using RFID tags to track inventories of reagent chemicals stored in specially equipped freezers at customer sites. Whenever a customer
takes a reagent from the freezer, a reader in the unit’s door records the withdrawal
and automatically relays the information to Promega. That up-to-the-minute info
on inventories has cut down on the company’s need for expensive overnight deliveries to avoid stock-outs (Promega pays the freight on large orders). “It’s p. 12
Mecalux closes
on purchase of
Interlake assets
Mecalux, a Barcelona,
Spain-based designer and
maker of storage systems,
has acquired for $30 million
the assets of U.S.-based UFC
Interlake, a storage systems
company currently operating under bankruptcy protection. Mecalux says the
transaction, which includes
the acquisition of four plants
in the United States and
Mexico, dramatically
expands its presence in the
North American market.
A federal bankruptcy
court approved the transaction after no other bidders
came forward to purchase
the assets, Mecalux says.
The company’s U.S. division
will be renamed Interlake
Mecalux.
The UFC Interlake facilities are in Pontiac, Ill.;
Sumter, S.C.; and Mexicali
and Matamoros, Mexico.
Mecalux already operates
facilities in Chicago and in
Mexico.
Mecalux says that once
market conditions improve,
the new U.S. division will
aggressively expand its
sales volumes in storage
systems and technology
throughout the country. It
expects that, over time, sys-temwide sales will be split
evenly between Europe and
the United States.
