Southfield, Mich. (Vocus) September 30, 2010
AIAG, JAMA, JAPIA and Odette today announced an all new ‘Global Guideline for Returnable Transport Item (RTI) Identification’. The four organizations from North America, Japan, and Europe created the Joint Automotive Industry Forum (JAIF), to work closely together on global automotive standards.
This guideline represents a significant milestone for the international automotive industry when applying RFID for tracking and tracing returnable containers throughout the supply chain. It is the culmination of a major project which started in 2007 and was completed in August of this year.
When companies were asked in a survey “Does your facility have a problem with returnable containers?” the answers that came back were conclusive. 76 percent of companies confirmed that they encounter problems; 36 percent were related to operational downtime due to lack of containers; 28 percent with expediting due to missing materials or containers; 18 percent down time due to dunnage and 16 percent with other related issues.
Returnable containers have a long history of pain points for the automotive industry. These include the challenges of ownership, maintenance, losses, and special shipping charges throughout the supply chain.
The automotive industry spends many millions of dollars on problems surrounding returnable containers annually.
- The percentage of container budget expended by companies to replace non-disposable containers/racks is greater than 7%
- Industry costs to cover the many problems of re-usable racks and totes is well above $750M annually in North America alone
“Lost” returnable containers will continue to cause supply chain down-time and loss of productivity unless an adequate system can be introduced to gain visibility of and control their whereabouts better. The JAIF has come up with a workable open-loop, standards- and RFID-based solution that can do just that.
Given the RFID initiatives occurring within the industry, as well as the burgeoning international RFID standards that are becoming available, the opportunity existed to create guidelines for automatic identification technology that could address recommended business processes as the price of RFID technology drops.
This guideline provides guidance for the use of radio-frequency identification (RFID) for the handling and tracking of any size returnable container utilizing a single passive RFID tag as an asset identifier. It identifies minimum data requirements as well as semantic and syntactical recommendations, based on the application requirements identified by the trading partners. It further provides specific recommendations for the air interface communications standard to be used for RFID tags.
The working group was especially keen to ensure that the outcome of the project complies with all the relevant ISO standards to ensure worldwide cross-border and cross-industry interoperability and interchangeability.
This guideline does not supersede or replace any applicable safety or regulatory marking or labeling requirements, but can be applied in addition to any other mandated requirements.
It provides a basis by which we can improve our capability of projecting, and creating, positive ROI.
The high level cost/benefit categories that drove the need for a solution were replacement costs of returnable containers, increased visibility of shipments, reduction in lost shipments / extra shipping charges because no racks available now, increased uptime for production when you know where your racks are, and better line scheduling due to rack availability/un-availability (i.e., Don’t’ do the 60 minute tool change on the line if you know you are not covered with racks to put your product in.)
One large European vehicle manufacturer stated their “…long-term goal is to implement an integrated, paperless production and logistic chain throughout their whole group”. A recent pilot project showed how they are able to reliably integrate this innovative RFID technology into their business processes at a low cost / positive ROI. These new guidelines will enable that technology to be rolled out worldwide for all automotive players.
The impact of the solution provided by the guidelines include a potential to significantly improve business processes, redeployment of personnel/assets, better visibility of shipments throughout the supply chain, data accuracy improvement / increased confidence in data obtained, reduction in production down time and a tool for better ROI analysis
The guideline will be available soon from AIAG at http://www.aiag.org or by contacting the other regional organizations directly.
AIAG was founded in 1982 by General Motors, Ford Motor Company and Chrysler Corp. to develop and share best practices to create a leaner, more efficient supply base. Since then, AIAG has grown and evolved to address increasingly complex global supply-chain, manufacturing and quality issues, and now has tools and processes that can help diverse industries improve their performance by protecting and enhancing corporate reputations, rooting out waste and inefficiency, uncovering cost savings and improving quality.
AIAG Contact: Lorrie Kinney