Smart labels trial promises step improvement

Logistics operators across a wide range of industries are expected to adopt Radio Frequency Identification smart labels rapidly, following successful completion of trials by a major food distributor.

The most advanced trials on product tracking and tracing in the retail world are entering their final stages at Sainsbury's regional distribution centre in Allington, Kent.

Using 'smart labels' instead of bar codes, logistics automation specialists from Omron Europe BV will soon be able to follow every individual item through the distribution chain, completely automatically.

This means that stock control becomes an exact science with every item individually recognised and with no possibility of operatives entering inaccurate information.

This will pull out massive costs from the distribution process and improve efficiency by an order of magnitude.

It also means that if substandard or contaminated product enters the supply chain, every single item can be traced instantly as soon as the problem becomes apparent.

The technology will transfer to other logistics fields rapidly.

Indeed, major airlines, parcel handlers and other logistics systems operators are already in advanced discussions with Omron about adapting and adopting the technology for their own industries, as are several manufacturers who want to track components through assembly processes.

'Smart labels' are based on radio frequency identification (RFID) technology.

Each contains a tiny silicon chip and an antenna, so can send and receive information to and from base stations or 'portals' located at key points throughout the supply chain.

The portals forward the information to a central computer controlling the whole distribution process, which is thus automatically updated as items progress through the chain.

With this 'perfect' information available to the logistics managers from the smart labels, no stock need ever go astray nor exceed its sell by date.

At present smart labels are relatively expensive, ranging from as little as £0.70 for the basic tag in high volume, to several pounds for tags with special packaging.

However Omron says that once they are manufactured in large numbers, economies of scale will reduce their price to pennies and they will become as disposable as today's bar codes.

"This cost reduction step is inevitable," says Steve Coffey - Omron's RFID Marketing Manager for Europe.

"All the operating and production technology exists, it is now simply a matter of managing the uptake of the system by user industries." Sainsbury's trial is currently based on its range of chilled foods, which have a short shelf life so have to be transferred from manufacturer to consumer rapidly and efficiently.

In the trial the individual items do not carry a smart label as yet, it is their distribution crates which are tagged.

This will prove out RFID, after which the technology can be extended to item level.

The Sainsbury product manager leading the project is Mark Gillott.

"For the trial, we have tagged several hundred crates and these come into the distribution centre from the chilled food manufacturers on dollies carrying up to 40 crates at a time.

By simply passing through the portal at Goods Inward, every crate's arrival at Allington is individually logged onto the regional distribution computer.

"Later their storage position within the warehouse is automatically uploaded too, along with each crate's contents information and the use by date (which is vital for efficient logistics with chilled food)." When a store orders chilled food for delivery, the computer automatically tells the warehouse managers which crates to pick, ensuring the correct product rotation.

"This is a level of control that is simply impossible to achieve with bar codes, manual data entry or any other system.

And even better is the fact that it is totally automatic, enabling more efficient use of labour resources." While Gillott is enthusiastic about product tracking, he also recognises the potential with product tracing: "The big food scares of recent years, such as BSE infected beef and baby food that has been tampered with, will be easier to manage and control because the location in the supply chain of all affected product will be instantly available.

Or if, say, a manufacturer of electrical goods has to have a product recall due to a production problem, we will be able to remove the offending items from wherever they are in the supply chain instantly and so can be confident that consumers will remain safe." The trial began about two years ago.

Sainsbury had started off using a 2.4GHz system, but found this unsuitable for its needs, so approached Omron which had just developed a far more practical 13.5MHz system, based on the open I-CODE chip from Philips Semiconductors.

Prototype RFID equipment was installed at Allington and also at the nearby Sainsbury supermarket in Sittingbourne for the first stage of the trial.

This has now been replaced with 'serialised' equipment, i.e the perfected design, for the final proving stage of the trial; and 13.5MHz is set to become the industry standard operating frequency for RFID.

Gillott says the business case for adopting RFID is justified by the cost savings and efficiency gains within the distribution centre alone.

"Rolling out RFID smart labels to the whole distribution chain from manufacturer to final purchaser will create a step change in the performance of supermarket supply." And Coffey is, if anything, even more excited than Gillot.

He sees the bigger picture of technology transfer: "Within a few years we will be making smart labels in high volumes, such that their price won't impact upon the sales price of most goods on sale in the high street." Their greatest attraction is that they remove the need for any manual intervention, yet generate perfect logistics information.

This will allow any logistics or distribution operation to be run at 100 per cent accuracy.

"Airlines are very interested in RFID for baggage handling and as a regular business flyer I am really looking forward to never having my luggage lost ever again!".

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