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Case Studies

TNT Logistics N.A. Initiates an Intermec RFID Pilot with Error-Free Load Validation

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TNT Logistics N.ATerry McIntyre bristles at the idea of mandates. In his job as manager of technology services for TNT Logistics N.A., he routinely comes up against such commands. Many of his company’s clients are suppliers to the major retailers that have the muscle to dictate how pallets of goods arrive at their loading docks. And those retailers want nearly everything to come tagged with radio frequency identification, or RFID.

“Most of the initiatives that are going on right now with RFID are driven by mandates,” he said. “Major retailers are mandating that if their suppliers don’t do something by a certain date, they will be penalized. We’re not playing in that mandate space, where they call it ‘slap and ship.’ We saw the value in RFID and wanted to do it to enhance our value to our customers, not have our customers force us to do something that we didn’t want to do.”

The value in such a self-prompted approach is that TNT Logistics N.A. can avoid the sort of anxious implementation that sometimes accompanies change directed by outside entities. TNT Logistics N.A. found it could take its time with research and development, participating in one of six worldwide pilot programs funded by its parent company, Amsterdam-based TNT Corporate.

“It’s a corporate-wide initiative to train all of our business-development people in what’s going on with RFID in the world,” McIntyre said.

With relative leisure, TNT Logistics N.A. could analyze pilot results to be sure it had the best RFID system for itself and its customers. Of those six pilot programs, McIntyre’s system emerged as one of the most successful. Boasting error-free load validation, the pilot features RFID tags, readers and antennas from Intermec Technologies.

Auto Focus

As a third-party logistics provider, TNT Logistics N.A. serves clients who want to outsource almost any aspect of supply chain management. Headquartered in Jacksonville, Fla., it can handle logistics for warehousing, transportation, engineering design and site selection, among others. Clients include a home-improvement retailer, a window manufacturer and an electric company, but the automotive industry makes up the bulk of its customer base.

A big-three automaker, one of TNT Logistics N.A.’s main clients, agreed to participate in the pilot. TNT workers in the pilot program use an RFID system to validate outbound loads of parts leaving a material support center in Detroit for the nearby automotive plant’s assembly line.

Phase one of the pilot tracks only small-lot parts. These can be windshield wipers, lug nuts, seat belts or other parts that come many to a box and don’t have the sort of sequenced installation requirements that, say, a drive shaft would have. In the small-lot department, workers can grab a handful of bolts from a plastic tote knowing that any of the bolts in the box will do.

For parts that make up major automotive elements with a specific installation sequence, load validation is far more critical. Deliver a shipment of four-wheel-drive parts to a section of plant assembling two-wheel drive cars and the whole assembly line can shut down. Such business interruptions are tremendously costly, both to the automotive plant and to the company that delivered the wrong parts.

Ultimately, one of the pilot’s most beneficial applications will be in validating loads of these sequenced parts. Because the first phase has been so successful, TNT Corporate is funding the pilot’s second phase, already under way. Phase two will move the RFID system into the automotive plant to track parts.

Down to Nuts and Bolts

In TNT’s material support center, workers shuttle loads of small-lot automotive parts by forklift truck to awaiting trailers. Before moving each load to its outbound staging area, a forklift driver consults a truckmounted mobile computer for loading instructions. Real-time messages travel to the mobile computers from TNT’s main network through a Tibco message routing box built into the Manhattan warehouse management system.

An on-screen menu gives workers a number of loading options to choose from. “The system already knows how many racks are required for each load because all the products have been associated with RFID tags on each rack,” McIntyre said. “You have a load number, the system tells you what door to go to, and it tells you how many racks are supposed to be on that load.”

Forklift drivers typically pick two racks of boxed parts at a time, driving them through an RFID portal lined with Intermec® IF5 tag readers. The readers bounce a radio signal off passive 915 MHz Intermec RFID tags on each rack of parts, which reflect tag data back to the reader and on to the network. If the rack matches what the system shows is needed for a particular load at the correct portal, the pertinent data line on the mobile computer will flash green for “valid.”

If anything is amiss with a load – the driver tries to take the wrong parts through the right portal, for instance, or vice-versa – the mobile computer screen will flash an error message. Should the driver ignore the error warning and attempt to unload the racks anyway, the mobile computer will lock up.

Each 53-foot trailer holds 24 racks and takes about an hour to fill. Every hour, TNT delivers a trailer load of parts to eight routes within the automotive plant. Each route gets a three-rack shipment. After delivery, the driver returns to the material support center to take another load.

The new RFID system has eliminated most of the downtime once associated with filling a trailer. Where before trailer loading would have to wait until all eight parts pickers had brought their filled racks, now the trailer is continuously loaded as pickers arrive. “It’s really improving accuracy, but it’s also improving efficiency,” McIntyre said. “Validation accuracy for small lots, at this point, is nearly perfect, about 99.9 percent. We practically have no errors.”

McIntyre credits the forward thinking of his parent company’s president with initiating the changes TNT Logistics N.A. has undergone in the area of RFID. He describes his ultimate boss as “very technology savvy.” TNT Corporate understood that RFID was going to be the next big thing for supply chain management. “It’s going to be very similar to what bar codes were ten, twelve years ago,” McIntyre said. His company wanted to get in on that next big thing for reasons that had little to do with mandates.

“We didn’t charge our customers,” McIntyre said of the pilot programs. “This was something we were doing on our nickel to get experience and learning.”

As the TNT Logistics N.A. pilot program expands and explores the possibilities of RFID, Intermec equipment and know-how will help McIntyre and his crew use the technology to better serve customers. Mandate or not, that’s all he really wanted to do anyway.