Tuesday, February 5, 2008

Thailand's RFID Truck and Logistics Tracking


Active RFID technology helps keep SCG Logistics' lignite shipments on schedule


Radio Frequency Identification (RFID) technology has proved itself in the logistics sector with a large Thai shipping company, SCG Logistics Management, effectively using active RFID technology to manage a fleet of delivery trucks.

With a total of some 3,000 trucks, the SCG Group transports more than 200 different products and has a total of over 7,000 transactions a day and RFID has improved the efficiency of its logistics and inventory management in the transportation of lignite.

SCG Logistics Management system management department manager Vinit Vichittanaporn said the company provided distribution services to all regions of Thailand, including making international deliveries to Laos, Vietnam and Cambodia.

Vinit said that various products required different management approaches but stressed that the technology deployed had to depend on business needs.

RFID was suitable for a job that had a lot of transactions involving a large amount of automatic, real-time data, he said, adding that the company had begun by implementing a transportation management system (TMS) in 2001 to optimise the logistics system.

In the original transportation model, SCG Logistics had faced many problems. Vinit cited the company's distribution of lignite which had to be taken from the mine at Mae Moh in Lampang to three cement factories in Saraburi at Taluang, Kangkoi and Tawong.

Some 800 trucks made 150 trips a day transporting lignite for 15 carrier companies. "The trucks had to wait for one another and they often had to switch to other plants if the storage space at the plant they had gone to was full, and this had caused extra fuel costs," Vinit explained.

He added that before there had been no visibility to monitor fleet capacities, with long waiting times for trucks and a lot of documents such as shipping documents, courier invoices, weight reports that had to be filled out. Moreover, there was the problem of data delays and inaccurate invoices, he said.

Thus, SCG Logistics had looked for a solution and had made a comparison between an RFID- and a GPS-based (geographic positioning service) approach. The company had decided on RFID and started implementing it at the end of 2005 and today the technology has been applied to lignite shipments and would be further expanded to manage the logistics of another two raw materials: gypsum and coal, he said.

During the pilot testing system, the company exploited active RFID technology at a 2.4GHz (microwave) frequency.

The active RFID tags were attached to 30 trucks while the readers were placed at the destinations, such as at the entrances to the mine to read data from a distance while the trucks were moving and at weighing machines in order to compare the weights of products at the origin and the destination.

"We also integrated the RFID system with our ERP and the real-time enterprise application integration (EAI) systems," Vinit explained.

SCG's RFID web tracking was also connected to its customers' ERP system and thus customers did not need to key in the fleet data because this information would show on their monitors in real-time. It also could track the status of each truck during the transportation.

Initially, said Vinit, the company had faced network failures, a lack of integration of the systems, disconnections between weighing stations at the mine and at the plants, power failures, human errors, non-processed procedures and issues with new trucks and carriers.

However, the company was eventually able to get accurate information since RFID chips have a unique identifying number and the system was free from human intervention that would ensure that they would get reliable truck identification and arrival times, he said.

With accurate, real time information on individual vehicles, an operation plan that would maximise the usage of each vehicle could be worked out. All the information was in electronic format and this could easily support paperless operations, such as the calculation of fleet charges.

"Contractors are also happy because the information is in real time. The drivers can get their wages as soon as their job is done and need not wait a long time, as had been the case before," Vinit said, adding that the company could reduce the number of workers involved.

The company is now implementing RFID to track imported coal from Ayutthaya to its customers and will implement an RFID reader at the stockpile. SCG Logistics Management now plans to expand RFID to other fleets in the near future, such as to those shipping gypsum and rolls of paper.

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