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Iveco works closely with logistics company Kuehne+Nagel, which manages Iveco's 190,000 square meter logistics center in Turin. The two companies partnered with supply chain consulting firm Alfaproject to develop RFID systems - part of the company's PARTS.iD project.
Paolo Guidi, head of sales and marketing at Kuehne+Nagel, said it was the first project in Europe to use RFID technology to manage spare parts in the automotive industry.
Iveco, which sold 192,000 trucks in 2008, supplies parts to trucks and buses that have been shipped through the company's network of nearly 3,500 authorized repair points in 100 countries. When the vehicle needs to be repaired, the authorized repair site will need to place an order with Iveco if it does not have the required parts. Many orders must be completed overnight and sent to the repair shop the next day. Due to the tight delivery time and the number of parts, Iveco is often prone to errors when shipped. This is why the company decided to launch the PARTS.iD project, hoping to increase the speed of picking and shipping.
The availability of parts is a key factor in securing Iveco's profits, said Stefano Fantini, head of the company's customer service supply chain. Iveco's goal is to provide customers with complete, complete parts through fast and stable delivery.
In January 2008, in the first phase of the project, Alfaproject conducted a feasibility study proposing RFID to improve the process of shipping, picking and shipping. Iveco agreed with the proposal and was aware of other uses of the technology - ensuring that the Iveco parts that customers use to repair the vehicle are genuine, not counterfeit.
At the time, Iveco decided to connect the Kuehne+Nagel RFID system at the Turin distribution center. The two companies began investigating the supplier's willingness to the project in March 2008 and installed a beta version of the system at the distribution center in May.
At the Turin Distribution Center, Kuehne+Nagel receives the parts shipped from the supplier and moves them to a receiving area. The worker then used an Intermec print encoder to create an adhesive label containing passive inlays in accordance with EPC Gen 2 and ISO 18000-6c. The label is encoded with a unique ID number and printed with a barcode and other information. The barcode is the same as the label ID number so that the dealer can use the same tracking number.
The employee affixes the label to the outside of the storage component box. Depending on the cost of the parts and the specific management process, the company implements single-item labeling on some parts and others at the box level. Iveco said that before expanding the application, the company labeled 50% of its parts to develop and redefine RFID processes in operations.
“By 2010, the company will label all shipments from Turin,†said Alfaproject management partner Alessandro Dandolo.
“We don’t ask suppliers to label themselves now,†Fantini said. “Because the company’s own labeling is enough to define the application process.â€
When the box is finished labeling, it is placed on the pallet and loaded onto the cart. The truck driver drags the cart through an Intermec portal reader that reads the tag ID code. When the green light is on, the system instructs the driver to move the parts to the warehouse for storage.
When the customer places an order, the system generates a pick list, and the forklift driver uses a handheld barcode scanner to take the required parts. The driver then moves the parts to a scale for weighing and RFID identification. Since the goods had to be weighed before being sent to the repair center and a fixed RFID reader was installed on the scale, Iveco and Kuehne+Nagel chose not to use RFID technology to sort the goods from the warehouse. When the goods are weighed, the RFID system confirms the correctness of the goods. If the item is in error, the system sends a new pick order to the handheld strip scanner. When the goods are weighed and confirmed, the system generates an RFID shipping label, and the staff attaches the label to the box or part.
Next, the forklift operator loads the parts onto the truck, passes an RFID door reader, and the reader reads the RFID shipping label (the reader accepts instructions to search only for specific labels). If everything is ok, the system lights up in green, prompting the operator to load the parts onto the truck.
At the end of 2008, the RFID system was fully operational. In order to save costs, only two warehouses in the first phase of the project were equipped with door-to-door readers.
For parts sent to other areas, the RFID tag was last read when the shipping label was posted. At the warehouse entrance and exit, the worker reads the label barcode and the system confirms that the correct item is delivered to the correct location.
In the next few weeks, Iveco plans to install a reader at a distribution center in Madrid to identify the labeling components shipped from Turin.
In addition, Iveco is considering using RFID to track back the parts that need to be repaired in the opposite logistics.
Iveco Expands RFID Component Tracking Application Scale
Iveco - Fiat Group's subordinate truck and bus manufacturer - plans to expand the company's RFID system for processing receipts, sorting and parts, and ensuring the authenticity of parts. The system has been in operation at the Iveco Torino Distribution Center for a year, and the company plans to apply it in a distribution center in Madrid in the next few weeks.