With no hesitation, we would like to express our intention in this project and discuss the scopes involved in this post. It is an honour to give our very best to share with you, every business aspects involved with the implementation of RFID in F&N Warehouse Management System.
Our objectives are:
To integrate RFID Technology in Storage and Distribution Network to achieve systematic product handling and storage.
To maximize data accuracy of product movement and minimize the human-related risk of management.
- To achieve Real-Time Monitoring of Distribution and Excellent control of Product Quality within Distribution Network.
However, our project is started with an unexpected challenge...
One of our group members -- Tzuu Bin is having two-weeks business trip in Thailand. We have to carry out the discussion via MSN and e-mail, using "inefficient" internet service providers at both sides.
First, we have to discuss the scope for this project, which we think is rather broad and challenging. We cannot deny the fact that cost is the ultimate "STOP" caller in every ambitious and wonderful dream.
We came to a conclusion that RFID tag should be attached to the pallet or case, not on every single item (product). The latter will increase the cost tremendously, without bringing any clear economic impact. Domestic consumers will not benefit as the tag does not benefit them at all. Most importantly, the embeded RFID tag in the product packaging can hardly be recollected for recycling. The return on investment (ROI) could be very low.
If we consider tag on either pallet or carton crate, the tag can be easily recycled for each product cycle, the quantity of tag purchase can be shrank to 60000 at
the initial investment, with annual replacement of 5000 for damaged tags (assumption). This saves a lot compared to tens of thousands per day.
Then, we need to outline the stages (phases) of RFID-technology implementation. With constructive discussion held and adequate research done, we concluded the following three phases of roll-out .
Phase 1
Phase 2
- Technical Assessment
- Pilot
- Integration assessment
Phase 3
Besides, the support from top management is strictly required. We intend to convince the stakeholders with the following benefits gained over the proposed investment:
Cost – Working Capital Reduction
Adoption on RFID technology enables less man-hour on quality inspection and prevents manual recording of information for each crate and pallets, thus reducing human capital cost in warehouse.
Revenue – Profit Increase
- Reduce labor costs in stores and warehouses (long-term).
- Decrease inventory with better information management.
- Reduce shipping loss and inventory loss due to mis-manifest, mis-routed,
pilferage, damage, shortage and duplicate order.
Improve asset visibility, leading to improved asset utilization and working capital efficiency.
Improved Product and Service Quality
Improve product return management - manufacturers could quickly locate and recall faulty products, even before they reach consumers.
Legal and Regulatory Requirements
Temperature control ensure safety and quality, ensure longevity (shelf-life) of food products.
Improve Customer Satisfaction
Better information management of stock level will assist sales department in making necessary business decision, assisting customers on orders and enquiry.
Real time information can be obtained for quick management decision, e.g. routing, sorting and recalls.
Increase inventory accuracy, assist accurate demand planning and reduce inventory cost.
Next, we have to decide the timeline. We estimate 15 months of transition and implementation.
In order to formulate the budget required for this project, we have to list out all the resources we need, and do research on the costs from available sources online.
In the meantime, we also discuss on the hidden cost that might appear during the implementation of RFID in warehouse.
The basic but critical elements of a RFID system include tags, printer/encoders, reader/encoders (interrogators), sensors, middleware (for data-filtering and data-flow management), and, if needed, some software adaptations to enable legacy applications and systems to receive RFID-generated data.
The integration of the RFID into the existing program (hardware and software system) and the support from third-party technical consulting team constitute major percentage of our costs. The team is required to provide single technical consulting engagement or execute a complete turnkey international solution through its comprehensive reseller and systems integration network.
Subsequently, we have to define who are the participants (or stakeholders) required in this project and their roles and responsibility respectively.
Job Title | Duties |
Project Manager/s | Manage the progress of the project and make sure the tasks are executed within budget. |
IT Department | Concerned with technical information regarding the physical integration of the RFID system into the current IT infrastructure. This includes information such as the hardware/software structure, security issues and standards. |
Process Management group | Interested in a potential change of processes when implementing an RFID system, the integration of new processes into the existing business processes, and evaluating how processes can operate more efficiently. |
Legal Department | Handles the legal issues associated with RFID and requires information such as related legislation, to ensure that the firm is complying with all relevant national legislation. |
Human Resources (HR) Department | Need to be provided with information regarding topics such as health implications from the use of RFID or also employee rights |
Communication Department | Requires information on RFID so that it can communicate information to various parties. |
Then, we have also converse the expectation of stakeholder and the critical success factor.
- Management
- Finance (sponsoring department)
- Team member
- RFID Technology supplier
- RFID service provider (consultant)
- End user
Expectation & Success Factor
- Creating strong internal and external motivation for improvement
- Developing a clear RFID strategy
- Partnership with competent RFID providers
- Strengthening mutual understanding in organization
- Top management support and commitment from leadership
Tactical/management level
- Determining which practice should be incorporated into RFID system
- Facilitating equipment vendor’s investment
- Integrating RFID into a existing IT architecture
- Proper staff training
- Starting with small RFID project (trial)
- Utilizing a cross-functional team
- Avoiding major process change/ limit process changes
- Coordinating improving procedures
- Integrating the data collected
- Lack of comprehensive facts and data
- Using cost-effectiveness reusable tags
The following assumptions were made in preparing the Project Plan:
- Management will ensure that project team members are available as needed to complete project tasks and objectives.
- The Steering Committee will participate in the timely execution of the Project Plan (i.e. meeting when required)
- The Project Plan may change as new information and issues are revealed. Mid and upper management will foster support and “buy-in” of project goals and objectives.
The following represent known project constraints:
Implementing a fully functional RFID system incurs multiple costs, including tags, readers, printers, infrastructure, consulting, training, change management, and service provider fees. There is also the cost for additional labor that will invariably be needed with early stage of RFID deployments.
Automation process through RFID technology requires a new working methods ad performance measurement for the supply chain in F&N. There will be significant impact on the whole organization, especially on warehouse operating protocols.
Thus, the designation of RFID system must consider new processes and procedures to automate tasks and decision making, as well as considering the impact on the whole organization.
Risk to the nature of business
Although RFID is a mature technology; it is not popular among dairy product manufacturers. The lack of ROI information upon RFID deployment increases the risk of the business nature.
Additionally, RFID technology is widely deployed in U.S and Europe country but not in Singapore. The lack of established local vendor and experienced consultants in the region are few issues we have to consider.
At last, your comments and constructive suggestion are strongly welcome.
