Identification technology for Work In Process applications is evolving

wipI have had countless conversations over the years regarding barcode vs RFID. Most of those discussions I explained that both technologies have their own unique set of features and benefits and it is rarely the case where they are competing. I still stand by that general argument except when it applies to Work In Process applications. Looking back over the last four to six years there is evidence of a major evolution from barcode to RFID in the production process.

I guess the next question is why is this happening? I am not sure I have the definite answer, but there are a couple consistent factors that tend to come up when we are installing RFID in place of barcode:

Automation – True automation means there are no manual processes. When an operator has to pull a trigger on a barcode scanner the scan is not automated. Even with fixed barcode readers the barcode will sometimes need to be presented to the reader by an operator holding the part. With fixed RFID scanners the part is automatically scanned even without a direct line of sight and even in poor lighting conditions.

ROI – At first glance a barcode solution may seem to be more cost effective than RFID. However, things that need to be taken into account when going the barcode route are: specialized lighting, data management, longevity of the barcode in a harsh environment, etc. With RFID the tags can be read in complete darkness, the data can be managed locally, and the tags are built to survive harsh conditions. In addition, the cost of paper RFID labels has become manageable in the last couple years.

This is definitely something I will be keeping my eye on going forward. With a renewed focus on automation, identification technology will become more and more important as we move toward true automation.

To learn more about industrial RFID systems visit www.balluff.us.

“Team” Spells Success In Traceability

If you’ve ever considered a traceability project, like asset tracking for instance, you’ve probably also done some homework into the different technological ways to implement it, from barcoding to using RFID (radio frequency identification). And possibly, while doing that research, you may have seen some presentations or read some articles or whitepapers that have talked about the “team” of stakeholders required to implement these projects, especially if involving the scale required for a facility, or even multiple facilities. Well if you’re a manager reading this and involved with such an endeavor, I’m writing to tell you, take this stakeholder team thing seriously.

In many respects, there are rational fears in getting a stakeholder team together in the early stages of these projects, like the conceptualization stage for example. These fears include: Blowing the project out of proportion; Creating mission creep; Even derailing the project with the others self-interests. Again, all can be valid and even come true to a certain extent, but the reality is that most, if not all of the time, these same stakeholders will also identify the potential opportunities and pitfalls that will either help build the REAL ROI case, and/or help prevent the unseen wall that will prevent success.

These stakeholders can range from operational management (warehouse to manufacturing, depending on the target), IT, financial, quality, and engineering, just to get the ball rolling. You must always be careful of allowing the project to slip into “decision by committee”, so hold the reins and have the project lead firm in hand. But by bringing their input, you stand to satisfy not only your goal, but likely the shared goals they also have, validating and strengthening the real ROI that will likely exist if traceability is the requirement. You will also likely find that along the way you will bring improvements and efficiencies that will benefit the broader organization as a whole.

Once you’ve established the goal and the real ROI, reinforced by the stakeholder’s inputs, that is the time to bring in the technology pieces to see what best will solve that goal. This is many times were the first mistake can be made. The technology suppliers are brought in too soon and the project becomes technology weighted and a direction assumed before a true understanding of the benefits and goals of the organization are understood. Considering a project manager before bringing in the technology piece is also a great way to be ready when this time comes. When you’re ready for this stage, this will typically involve bringing in the vendors, integrators and so forth. And guess what, I’m certain you’ll find this part so much easier and faster to deal with, and with greater clarity. If you have that clear picture from your team when you bring in your solution providers, you will find the choices and their costs more realistic, and have a better picture of the feasibility of what your organization can implement and support.

Not to kill the thought with a sports analogy, but a team united and pulling for the same goal in the same direction will always win the game, versus each player looking out for just their own goals. So get your team together and enjoy the sweet taste of ROI success all around.

For more information on Traceability visit www.balluff.us/traceability.

RFID ROI – Don’t forget the payback!

traceability_1Just recently, while visiting a customer wanting to implement an RFID asset tracking solution, it occurred to me that ROI (return-on-investment) should always be the ultimate goal for most uses of RFID. What brought this to mind? It was because we were discussing technology before understanding what the ultimate ROI goal was. I’m sure you could say this was failure from a sales perspective, but I’m sure at some point you have also found yourself caught up in the technology seeming so promising and exciting in terms of its benefits, that you lost track of why you were there in the first place. Also, many times, the technology stage is where equipment suppliers and/or integrators are brought in.

As with most projects of this nature, they get started because someone says something like “why don’t we do XXX, it will save us money, time, trouble, loss or get us in compliance” or all of the above and likely more. But this same thought can get lost going through execution. RFID projects are no exception. Many successful RFID implementations show it can bring large benefits in short and long-term ROI not just in asset tracking, but manufacturing, warehousing, supply chain and so on. But the implementor must always keep track of the ROI goal and be willing to share this with their internal stakeholders, supplier and integration partners to be sure everything stays on track and technology does not take over for technologies sake.

Unfortunately the ROI is not always calculated the same for applications. Typically ROI can simply be measured in time period until the investment is paid back or the money saved over a given period of time. The most simplistic way of calculating payback or ROI is: Cost of Project (calculated at the beginning) / Annual Cash Revenues (expected savings) = Payback Period. Unfortunately the rub comes in when calculating the detail in the two factors. This can be because the cost of the project is not totally encompassing and/or revenue does not take into consideration factors like interest costs or variations in production, for example. As this will ultimately become the measure of successful projects, really understanding ROI is critical.

Factors in Annual Cash Revenues are factors the implementer needs to understand and grasp as the reasons for undertaking a project. These factors will typically involve several aspects of their business, including savings from greater efficiency, lower cost in storage or inventory, less scrap, higher quality standards (less failure returns), compliance benefits, etc. In fact, this part is difficult to encompass here in this forum. But Cost of Project has some factors I can point out. In the example I raised in the beginning, the customer needed to not only address the read/write equipment and tags (including handheld’s), but also the cost of installing all the possible variations in tag types used during manufacture, common database/software needed, bringing distributors and field service on board, integration providers costs (internal also), training needs, software licensing, start-up and support cost, and so on. So in a manufacturing line, it starts with the new equipment, but must include the PLC/database programming, pallet modifications, station installation, spare parts, start-up and training for example. In warehousing, it might include new equipment, loss of facility equipment like forklifts or warehouse area, facility modification like electrical for example, ERP and WMS implementation or integration, commissioning and training.

One thing to consider toward understanding these factors before implementing a total enterprise solution, whether in warehousing, supply chain or manufacturing is to consider a pilot or test/trail program to determine as many factors as possible and test the results before committing to the full investment of the complete project.

So in your next project, remember to include your stakeholders and partners in your end goals, try to encompass all the factors and don’t forget the payback!

To learn more about RFID visit us at www.balluff.us/rfid.