Toshiba - The Interview - leaders in RFID for warehouses and supply chains
 Radio Frequency Identification (RFID) technology has been around for over 60 years, but it is only in the last decade that RFID has become recognised as a feasible investment for companies looking to transform their manufacturing, warehousing and supply chain operations. Today's RFID applications are affordable, offer an early return on investment and enable investing companies to experience new heights of efficiency. Toshiba is one of Europe's leading suppliers of RFID for warehouse and supply chain applications, and recently implemented one of the largest RFID supply chain solutions in Europe. Rob McGregor, Toshiba's Business Development Manager - Identification & Printing Division, spoke to Warehouse & Logistics News.
Warehouse & Logistics - First of all, Rob, how long has Toshiba TEC Retail Information Systems been involved in supplying RFID solutions?
We have been involved in RFID for over five years, initially on 13.56MHz HF and now with both HF and UHF, with respective read ranges of 0.5m to 5.0m.
WLN - How big a part of your global business now is RFID-related?
RFID-related business accounts for below 5% of our current turnover, but the proportion is growing exponentially. By contrast, demand in the EU for standard barcode and label-based products is leveling but will remain a significant chunk of our business for the next few years.
WLN - How is Toshiba TEC Retail Information Systems structured to deliver RFID solutions?
RFID is a complimentary offering within our identification and printing division. We manufacture RFID-ready barcode printers and RFID consumables - tags and smart labels. It's hard to go to market with a single component; clients prefer complete solutions, so we developed RFID@TOSHIBA which we will launch soon, to support this. We've 10 subsidiaries across Europe with around 20 people working on RFID sales.
WLN - How big a part of your UK business is RFID?
Our UK RFID team numbers just under 10. We've developed a handful of live customers and have some exciting enquiries, which we are progressing.
WLN - What areas of the RFID canvas do you cover?
Our business development team provides consultancy and project management, RFID software, consumables, Implementation Services and after-sales service. Our RFID hardware combines Toshiba's print-based solutions and equipment from 'best of breed' third party providers we apply the same principal to RFID software.
RFID@TOSHIBA will offer a complete end-to-end solution - we believe it's unique in Europe.
WLN - Rob, your job title is Business Development Manager - Identification & Printing Division. What geographical area do you cover?
I look after UK based clients but many of these are pan-European companies. I'm part of Toshiba's European RFID task force which works across continental Europe and developed the RFID@TOSHIBA strategy.
WLN - Where is all your RFID technology developed?
The majority of software and consumables are developed in Europe: the hardware is produced in Japan.
WLN - How are you going about marketing your RFID expertise to customers in the UK?
We attend the major seminars and exhibitions, the RFID Networking Forum and RFID Return on Investment. We also hold regular Toshiba-sponsored events they're free by invitation through our account teams - the next one is in May. We also have a large database of customers who use our barcode and label products.
WLN - What kinds of companies stand to benefit from your RFID technology?
They range from SMEs to multinational blue chips, from single site manufacturers to companies with 15 factories and major logistics chains. We cover a number of vertical sectors - aviation, retail supply chain; document tracking for local and central government; financial and banking; healthcare; automotive; and logistics (3PLs.)
WLN - Companies don't want to be left behind in adopting this technology - everyone remembers the IT revolution of the 1990s, and how quickly that transformed the face of business! What is the current level of uptake of RFID technology in the UK and Europe?
Twelve months ago companies didn't understand RFID, but now they appreciate what the technology offers. Increasing numbers are reviewing their business processes and evaluating where RFID can fit. We're seeing dramatic increases in RFID adoption: a year ago it was maybe 100 companies, now it's several hundred, and a year hence there will be several thousand.
WLN - What size of company are the typical adopters?
The early adopters have been the SMEs: the major blue chips like to test and analyse new technologies well in advance. The retail and FMCG companies have been looking at RFID for the last 18 months, but are not likely to adopt yet. However, the smaller SMEs who recognize a clear business case are starting to implement.
WLN - What kind of operations are they using RFID for?
The operations deploying RFID vary across the vertical sectors. In aviation bag tagging is one of the clearest cases for RFID as there's a defined cost for each misdirected bag. In the warehouse RFID is used for track and tracing goods and stock visibility. Items can be booked in and tracked at pallet or pack level. RFID enables automatic allocation of warehouse space and triggers invoicing once goods leave the warehouse. In the supply chain, RFID ensures that goods are visible anywhere around the world where there are compatible readers.
WLN - What are the benefits to a company of a given size of investing in RFID, in terms of improved supply chain efficiencies?
The benefits are significant and measurable! In a recent project for a German manufacturing client the introduction of RFID reduced double handling by 90%.
Time saving can be significant too. All barcoded goods on pallets need to be scanned - a time consuming process. RFID tags can be read simultaneously saving several minutes' scanning per pallet.
WLN - How does RFID make goods more visible across the supply chain and beyond?
With barcodes you need complex shipping notes and it involves a manual process; with RFID the tagged items are read and verified on arrival in the warehouse, and again when they leave - this results in better visibility.
WLN - How does RFID improve tracking and tracing of products and shipments?
RFID gives 99% track and traceability enabling operators to pinpoint the item within the supply chain RFID also extends to case level tagging.
WLN - What sort of reduction in shrinkage and shipping errors can you expect with RFID?
99% of shipping errors can be eradicated by RFID - it automatically crosschecks what's shipped really is shipped.
WLN - What kind of business information is analysed and made available to the organisation using RFID? How quickly is it visible?
It depends which area of the supply chain you're in: at the end, where there's a need to invoice as goods leave, information is available in real time. RFID means companies can process invoices straight away through their ERP solutions, and track and trace stock.
WLN - How fast is UK industry catching on to RFID's benefits?
Awareness of RFID technology and what it can do is probably ten times greater than a year ago and growing. RFID technology is ideal for businesses that have a higher inventory than they would like, RFID can reduce this, cut down on buffer stocks and increase cash flow - the challenge is in implementation.
WLN - To recap, what can RFID do that barcode scanning can't?
RFID offers many benefits over barcodes. RFID tags contain a read-write option so that data stored on a RFID label can only be read or modified by authorised users. There is no limit to data capacity; a barcode is restricted to 50 bytes. To read a barcode you must be able to see it - 'line of sight'. There are no tight controls on where an RFID tag should be positioned the only requirement is that it must be within the field of the reader and not blocked by metals or water. Barcodes can only be read one at a time however RFID readers can read up to 200 tags per second. Barcode reading is a manual process: RFID is automatic and gives fewer errors, and requires less resource.
WLN - So when would you NOT use RFID technology?
RFID tag prices are coming down steadily, but there will continue to be instances where the cost is prohibitive, like fast moving low cost grocery items - it will be many years before we see RFID tagged baked beans.
WLN - To what extent is UK industry's adoption of RFID being hampered by fear about the technology, and ignorance about what it can do?
Fear of technology is relevant but there are now more resources available to help understanding of RFID. We still need to raise awareness of what RFID can do, the different RFID components and how it can be used effectively.
WLN - So how will RFID@TOSHIBA come to the rescue?
RFID@TOSHIBA will provide the end user with a one-stop shop for the different component parts of an RFID solution. Ensuring the correct style and specification of tags, identifying the correct readers, printers, encoders and middleware, all of which need to be compatible.
WLN - The high operating cost of RFID has often been said to be the limiting factor in whether people adopt RFID or not. How much do your tags cost?
It became a limiting factor because RFID manufacturers supplied the RFID inlays to smart label converters. Now, with our patented 'SPRINT' short pitch RFID encoding technology, we can print and encode directly into RFID inlays and insert them onto items. The cost of case-level tagging was prohibitive, at 15-20p per smart label, but once we supply in volume the costs is around 5.5p per tag.
WLN - What do you do to encourage customers to have a look at the RFID technology that's out there, and how it could benefit them?
As part of RFID@TOSHIBA we will be running roadshows for clients who want to adopt RFID. The first step is defining the application, and the correct technology for it.
WLN - How does someone reading this know if his or her company will benefit from having an RFID solution from you? What will it cost them, roughly?
If they can identify areas in their business process that need improving, RFID is a resource that can help. The cost is impossible to predict, but when we quote for RFID solutions customers are surprised that the cost is lower than expected.
WLN - How long before they see a return on their investment?
From 12 to six months.
WLN - What are the stages from first enquiry to go live?
We start with a consultancy visit, then achieve proof of concept by going to site, tagging items and 'reading' them. At the proposal stage the correct kit and vendors are identified, we then go to a pilot project pinpoint the accurate criteria and, finally, deploy the solution.
WLN - How many RFID installations have you carried out so far in the UK?
We've done a handful of installations, in manufacturing and healthcare. We're at pilot stage with some 3PLs, and are carrying out a supply chain project for a returnable asset manufacturer.
WLN - You recently implemented one of the largest RFID supply chain solutions ever seen in Europe. What were the challenges that the system was brought in to overcome?
The client had a huge stock handling operation during the last five days of the month, when 40% of total sales were shipped; there was also a massive peak on the last working day. Fulfilling the requests of each customer was a large task in itself: add to this the time pressures involved, the increased risk of errors with double booking, space problems and product availability delays.
WLN - How long did it take for the system to go live? What did it cost?
Discussions started in April and the solution was implemented by October. The cost of installation was around 100,000 Euros, with ongoing tag and support costs a further 100-150,000 Euros per year.
WLN - How long before the client saw a return on their investment?
That particular client saw a return in six months.
WLN - What recognised technical standards are your RFID products made to?
Within our RFID business, all our products and solutions conform to the ISO standard and EPC Global. As a business we're also involved in the EPC Global committee.
WLN - How easily scaled are your solutions as companies' operations change?
All our solutions are designed to be scalable, from applications with a single RFID reader to environments with hundreds. One of the main targets for RFID is achieving scalability and being future-proof, to allow companies to grow and replicate the same solution elsewhere.
WLN - What external factors do you see impacting on demand for your RFID solutions?
The biggest problem is speed of uptake, we have identified vertical sectors who would benefit from RFID. We now need to overcome customer fears and raise awareness of the technology which we hope to achieve through RFID@TOSHIBA.
WLN - Finally, where do you see your RFID business going from here?
Our target is to make our RFID business as large as our current barcode and label business within 3-5 years, and so double our present turnover.
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For further information about this company's activities in the warehouse and logistics industry please contact:
Toshiba TEC Retail Information Systems
Tel: 0870 890 7200
www.toshibatec-eu.co.uk |
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