I can’t think of a scenario more challenging where RFID is concerned. But that didn’t stop this Lodi, CA, cooperative, which produces canned tomatoes and fruit, from jumping onboard the Wal-Mart mandate back in 2006.
PCP’s Jim Farmer, director of distribution operations/logistics, and Peter Wtulich, chief information officer and vice president of information services, provided highlights on this RFID implementation at RFID Journal’s EPC Connection event in October.
“Our products are really a worst-case scenario for RFID,” declared Farmer.
After forming a cross-functional team and strategizing on its approach, PCP began a rollout in early 2006 based on an upper management commitment and a $400,000 investment for the first phase of its RFID implementation. PCP would not take a “slap and ship” approach, deciding that was an expensive, short-term view. And that’s despite obstacles, including limited resources, low-margin products, powerful magnets used in manufacturing, and excessive heat from the shrink wrappers used in its packaging production operations. Also, its on-demand RFID system is done in an operation that conducts 1,100 changeovers weekly.
“We wanted to turn the data into information using a scalable solution that would integrate into our enterprise resource planning software,” said Wtulich. In addition to collaborating on RFID with Wal-Mart, PCP also partnered with OATSystems (www.oatsystems.com) and IBM (www.ibm.com).
As an indication of how far along the company has come in the past two years, the two presenters noted how a verify and reject step helped lead them from a 33% read rate to a point where reads on its packaging line are 99.7%—and the read rate on the product that it ships is 100%.
“Generation 2 RFID technology was a lifesaver,” noted Farmer. In 2006, it did begin to use the data to address out of stocks. “With RFID, you can see the movement of product through the supply chain,” said Wtulich. “That’s phenomenal—[RFID] has ‘blown the roofs’ off stores.”
PCP noted that there are seven data points in stores, or more than three times the information it had before. Plus that information is provided 48 times faster than non-RFID methods, with updates and alerts every 30 minutes, Wtulich added.
PCP reported that with RFID technology, out of stocks improved more than 100%, and its promotional efficiencies doubled. Currently, the company is expanding the tagging of items and product lines.
“We’re ready when any other retailer asks that we RFID-tag our products,” said Wtulich.