Taking Inventory
According to the From Barcode report, two-thirds of Australian businesses believe that the most significant benefits from RFID will be in the form of improved inventory management, then elimination of shipping errors and improved on-shelf availability. Data that supports those goals will be imperative.
Not surprisingly the major barriers that were nominated were the cost of the tags, the cost of the RFID hardware, and also the reliability of tags and readers. The cost of RFID software (middleware) was also nominated as a significant challenge.
Despite these hurdles, Australian companies do seem to be outpacing Europeans in the RFID race, which was rammed home to Colovos and Drasic during their trip in the northern summer. They visited a number of fresh produce suppliers in Germany, Belgium and the UK, and also Microsoft's Navision headquarters in Denmark. After committing to spend $3 million on the new ERP system, the trip delivered a welcome confirmation of their decision according to Colovos, and also gave them further insight in how to streamline processes and information systems.
He says he was impressed that UK supplier Greenvale, which is significantly larger than Moraitis, managed to run its entire information systems with a team of five, compared to Moraitis's current rollout headcount of eight. One of his prized photographic mementos of the trip is a shot of Greenvale's sparsely populated IT shop.
"For the sake of 10 working days we got six months' experience," he says. Although the trip was organized on their behalf by Navision and its Australian reseller Dialog, Colovos and Drasic paid their own way. Colovos estimates the trip cost the company around $25,000, "but we picked up $100,000-$150,000 worth of information".
SIDEBAR: Tomato Juice
Thanks to a $200,000 systems upgrade, produce supplier Testarossa has a fresh new outlook on its business
Testarossa is based in Tatura, Victoria and supplies around three million trays of hydroponically-grown tomatoes each year through fruit and veg supplier Moraitis.
The business, run by Eric and Frances Testa, is in the throes of a $200,000 major systems upgrade, replacing paper-based information systems with barcodes, and installing a new fruit grader.
It is also the test bed for Moraitis's $30,000 adventure with RFID.
Tomatoes from 18 growers supplying Testarossa are graded and packed into 10 kilogram boxes. The barcodes on the tomatoes identify which grower the tomatoes came from and who packed them; this information is automatically captured by a barcode reader on the grader.
According to Moraitis CIO Con Colovos, the barcode system and the RFID system can sensibly operate in the same environment - but at around 60 cents a tag, RFID is just too expensive to be used at box level. "Until tags come down to a sensible price we will just have the tags on the pallets, although eventually we can RFID at carton level."
Each tag will feature the same pallet's serial shipping container code, and up to 32KB of other information, says Colovos. "This is intended as a pilot proof of concept, so we will store information such as the grower of the produce, whereabouts the fruit was grown, the date the seedlings were planted, the date they were picked, details of the quality assurance program.
"We want traceability back to the seedling," he says, adding that this will provide deep information about each pallet of produce. By understanding how long the tomatoes took to grow, what the moisture content in the soil was, when they were picked, when they were packed, when the were delivered, and when they ended up in a supermarket it would be possible to reduce the amount of spoilage and identify any flaws in the process or product.
In September the company took delivery of 10,000 tags, an RFID tunnel, RFID readers and hardware needed to run the system, and was operational last month. Colovos plans to run the pilot for 30-90 days.
Ultimately the information from the RFID readers will be fed into the Navision ERP system, which nine weeks after delivery was being put through its test paces at Moraitis in preparation for rollout by February. To facilitate that, Colovos is trialling middleware from IBM, which will sit between the RFID hardware and the Navision platform. Later he hopes a middleware solution will be available from Microsoft allowing RFID tag information to be fed easily into the Navision system.
"If the proof of concept works we will put in an RFID tunnel here which will receive the goods from Shepparton (Moraitis's main Victoria depot). Then we will be ready to roll out," Colovos says.
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