BY JAMES A. COOKE, EDITOR AT LARGE
TRACK AND TRACE
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Even after it set up a sophisticated supplier communication portal, Ingersoll Rand
experienced delays obtaining inventory visibility. An RFID system changed all that.
AS ANYONE WHO HAS TRIED KANBAN WILL TELL
you, just-in-time production demands up-to-the-minute
information on the whereabouts of inbound parts and
materials. Because the manufacturer keeps very little inventory on hand in the plant, there’s virtually no room for
error. For that reason, operations managers are particularly
eager for assurances that the material needed to keep the
factory up and running will be delivered on schedule. And
that means full visibility into incoming shipments.
A case in point is Ingersoll Rand, which uses kanban
scheduling at a plant operated by its Trane air conditioning
and heating systems division in Tyler, Texas. To obtain the
necessary visibility, the company three years ago set up an
online portal to provide a central communication platform
with suppliers. Through that digital portal, Ingersoll Rand
was able to obtain real-time visibility into the inventory on
hand at suppliers throughout the world.
But there were still some hiccups in the information flow.
For instance, the company had no quick way of determining whether the right materials had been delivered when a
truck arrived at the facility. Under the process it had in
place, workers recorded the receipt of incoming goods by
scanning bar-code labels. It could take as long as 30 minutes
to scan all the items in the back of a truck.
Thirty minutes might not seem like a long time, but in a
kanban operation, that’s a fairly serious delay. The manufacturer began searching for a swifter solution—which it
eventually found in radio-frequency identification (RFID).
BETTER VISIBILITY THROUGH RFID
A business of Ingersoll Rand Co., Trane makes residential
air conditioner and heat pump condensers at the Tyler
plant. As part of its operation, it brings in materials such as
compressors, electrical components, packaging, plastics,
refrigeration units, and raw components from more than
100 suppliers. More than half of those suppliers are based in
the United States, while another third are located across the
border in Mexico and a small fraction in Asia.
The establishment of the online portal in 2008 was an
attempt to streamline communications with those suppli-
ers. “Prior to setting that up, we had multiple systems for
[exchanging] information with suppliers,” says Michael
Smith, the multi-site material and supply chain leader for
Ingersoll Rand’s Tyler operations. “We had spreadsheets, e-
mail messages, and EDI [electronic data interchange] sys-
tems. We wanted a common communication system.”
While setting up the portal was a step in the right direc-
tion, the company expects its new RFID program will take
performance to the next level. In June, Ingersoll Rand began
working with some key suppliers to place tags on inbound
shipments. The tags in this case are passive devices made by
Alien Technology of Morgan Hill, Calif.
Now, when a trailer arrives at the Tyler plant, it passes by
an antenna that reads the RFID tag. Information encoded
in the tag is then uploaded to the electronic portal and
made available for immediate viewing.
The time savings have been downright impressive. Smith
