Order Fulfilment Technology that Impacts Bottom Line
Because concepts like omnichannel and online sales are changing the way companies do business vision and clarity in manufacturing, sorting, warehousing, and shipping of products is more critical than ever. Completing these tasks with accuracy is critical to a company’s bottom line.
The Problem
A customer of Northern Apex, a manufacturer and distributor of children’s equipment, including ride-on toys, strollers, and high chairs needed to meet a new contractual mandate from one of their customers. The mandate required that all boxed items be tagged with an RFID label before leaving the manufacturer’s facility. The RFID labels would enable the manufacturer to provide ASN’s (advance ship notices) to the customer so they would know exactly what was being shipped and be able to perform an automated goods receipt and confirm the contents of the shipment.
What is RFID?
Radio Frequency Identification (RFID) is the process and physical infrastructure used to automatically track and identify tags attached to objects. The tags contain electronically-stored information: a unique identifier, and potentially additional data, that is transferred to a reader via radio frequency waves. The most basic RFID system has two main components, an RFID tag and an RFID reader. The tag is a small radio transceiver that has a least two components, a microchip that holds data and the electronic circuitry required for transceiver functionality, and an antenna used to send and potentially receive radio signals. The reader is a larger radio transceiver that has at least the same two components as the tag. The reader is connected to a computer network or system to which it sends the information it has received from the tag.
There are two primary RFID systems: passive and active. In passive RFID systems the tags contain no power source and instead collect power from the interrogating radio waves provided by the reader. Without an on-board power source, passive tags have a range of communication that is usually short, less than 30 ft. In active RFID systems the tag has a local power source, such as a battery, and has a much longer transmission range, up to 1.2 miles in open fields. The onboard power source makes active tags more expensive than passive tags. RFID does not require line of sight (unlike barcode) so tags can be imbedded in the object or inside a box etc., and can be read from a distance, making it the perfect choice for a large manufacturing and shipping operation.
The Solution
At the end of their production line each product package had a label applied that contained a passive RFID tag. As the label was applied, the RFID system fed data consisting of the unique identifier for that product into SAP via the RFID infrastructure. This allowed for an automated inventory backflush of completed assemblies.
Crossdocking
At the end of their production line each product package had a label applied that contained a passive RFID tag. As the label was applied, the RFID system fed data consisting of the unique identifier for that product into SAP via the RFID infrastructure; the SAP, which in this case was in another country, verified receipt of the data. This allowed for an automated inventory backflush of completed assemblies. This allowed the production management team to know what had been completed and what still needed to be completed; as well as which raw components were still available in inventory. After receipt of the unique identifier data is verified by the SAP system, the items are then packed onto pallets in fixed quantities which are determined by product type, e.g. product X is always loaded in quantities of 30, and moved onto trailers. As they are moved onto the trailers, the pallets are scanned by the RFID dock door portals and if the correct number of tags per product type are present the system confirms the pallet as ‘complete’ and if the number is incorrect the system alarms ‘incomplete’. When the pallets arrive at the manufacturer’s warehouse the pallets of product are again scanned as they move through the warehouse dock doors and the material move is again documented in their SAP system. This verifies that it arrived and logs the amount of time the product was in transit.
Order Fulfilment
The outbound shipping conveyor in the warehouse is fitted with RFID readers. When an order is entered and ready to be pulled and shipped to the customer, the shipping staff scans the barcode on the delivery document and the shipping information for the delivery is accessed by the order fulfillment system. The system gives the operator the proper sequence the order should be loaded in meanwhile, the software validates the quantity and guarantees a proper line item match. The fulfillment record of the completed order is then automatically transmitted back into SAP to facilitate the generation of advance shipping notices (ASN’S) and invoices.
To further streamline the shipping process, the manufacturer saw the value of integrating the RFID order fulfillment system, the SAP order based shipping information, and ConnectShip, their multi-carrier shipping solution. This integrated feature creates the appropriate carrier’s label, notifies UPS or other carrier and freight companies when a shipment needs to be picked up, where it’s being sent, and what is included in the shipment. The most recent enhancement is a double-sided pack list printer that was put in place to alleviate manual folding and stuffing of pack lists. The functionality of the printer has allowed the drop-ship process to be efficiently improved. The manufacturer gained some additional advantages by leveraging this mandated use of RFID labels, including reduced charge-backs, automatic material movements and backflushing of their shipping processes. These advantages also led to a more in-depth RFID deployment with their ConnectShip system and double-sided pack list printer.
These processes have radically increased efficiency and decreased errors for this manufacturer, saving them time and money. After the RFID/barcode integrated solution was up and running, mistakes and complaints from customers have decreased dramatically; claims from their customer have decreased by over 90%. In addition to customer complaints decreasing, they have seen significant savings in over-shipments and missing items.