Case Study by Consultant Mayur Tolia on Digitization of Logistics Activities using RFID

Tacit Learning | 5 mins

Mayur Tolia presently a freelancer has rich experience in the logistics domain; especially in digitisation projects. 20 years of verifiable track record with 16 years at India's leading cement manufacturer, 12 years into Logistics/Supply Chain. Intrapreneurial and commercially astute with extensive and highly transferable cross-functional experience. Highly skilled at Program / Project management of enterprise level strategic projects to harness business benefits through through collaborative, cross-functional and innovative problem solving as a Subject Matter Expert (SME). Specialist in Digitalization based Business Process Re-engineering (BPR). Dynamic, motivated and composed change agent with a fervent passion for attaining the unachievable by means of analysis and collaboration. Skilled in strategic product development and in leading high performing, multi-locational teams in the ideation, development, and execution of high-impact, innovative and human-centric technology implementations. Thrives on innovation, cross-functional team leadership and in delivering exceptional results whilst recalibrating people's perception to effectively raise the bar. Consistent high performance recognised in form of 6 internal promotions and through numerous external awards and accolades at elite industry forums.

Following is a snippet of digitization as a case study to streamline the logistics processes by using an RFID. Digitization not only proves to be useful in arriving at a leaner process but also is sustainable (longevity) for the long-term as an initiative undertaken, having said that the project was found to be even environmentally conscious as unnecessary internal movement was eliminated and safer for vehicle movement and routing. Better utilisation of vehicles implied lesser transports and thus lesser utilisation of fuel.

Project Details

One of the leading cement companies in India implemented UHF RFID based logistics improvement project. Unlike other RFID projects which merely are used for "asset identification", herein the RFID generated information is "put to intelligent use" to automate the entire vehicle flow right from its entry at yard to all the stages of shipping cycle until it moves out of the plant.

Scenario and Root causes

• Traffic jam /congestion outside plants disturbing local community
• Uncontrolled movement of truck drivers & helpers
• Lot of paper work for loading cement
• Crisscrossing of the trucks - increasing accident probability
• Traffic discipline & monitoring in-plant
• Lack of in-plant truck movement visibility
• Lack of Asset (Truck) utilization visibility
• With the high volume of trucks managed by this plant , a technology support to

improving operational efficiency and OH&S was evident.

Business Objectives:-

• To minimize business continuity risk by improving safety norms
• To increase business sustainability, enhance brand value and improve corporate image
• To make plants safer & greener
• Reduce congestion near plant gate and inside plant
• To reduce SAP process cycle time
• To provide traffic visibility to logistics managers for efficient vehicle planning & management
• To ensure effective management control for better decision making
• Reduce trucks inside plant and also the time taken for loading (gate-in to gate-out) thus reducing risks inside plant

These led to the conceptualization of Project SPEED. Each letter of the acronym SPEED communicates the very inherent objectives of the project as below :

Safety : Improving safety of all stake holders in and around plant by limiting no. of vehicles available at all stages of the shipping cycle

Productivity : Optimizing packer utilization through continual flow of trucks as per run rate

Efficiency : Reducing detentions of trucks at any stage of shipping cycle time thus improving "asset utilization"

Ensuring customer Delight : Using RFID technology to provide end-to-end visibility to operational teams for better order execution time / delivery compliance.

Customer here is defined as:-

• Internal customers: Plant Management, Packing house/ Operations and Logistics team - Real time information visibility helping in quick and timely interventions on exceptions/ deviations.

• Intermediaries: Transporters, Truck drivers & helpers - better asset utilization (and hence profitability) through improved Turn-around-time, visibility into loading sequence helps truck drivers plan their rest/food etc.

• External customers: Actual customer placing the order - benefit for him/her = shorter shipping cycle leading to quicker order execution / delivery

The shipping cycle is divided into stages and RFID readers are installed at each stage. The RFID tagged vehicles are tracked right from their entry at the parking yard gate and the SAP check-in transaction is done automatically. Various data of vehicle like its loading capacity, route, and statutory validations - are available on-line and real time to logistics team to do planning and assign orders to the truckers based on their ageing. Each truck is preassigned the loading bay and is guided to the spot through various audio-visual aids and auto pulling. System also controls the total no. of vehicles inside the plant at any point of time. The custom developed software provides all the various logic, algorithms in automating the vehicle flow as per the packer run-rate and vehicle ageing. Real-time dashboards are available for various stake holders to act upon. SMS alerts for exception get generated to specific recipients.

The project may be defined more as an IT enablement of a logistics process through intelligent use of RFID. The base system remains SAP ERP to which the RFID application is seamlessly integrated.

Challenges faced:-

• Technology challenges : We needed technology which would be cost effective, with low maintenance and yet higher accuracy and stable enough since any failure incidence would impact our dispatches / plant operations drastically
• Change management : The implementation involved lot of change management since the legacy of manual / less disciplined way of working was about to change to a very transparent and disciplined process.
• Software development issues : Instances of software not performing as expected, stability etc.
• Implementation challenge : Miss-counts due to readers unable to sense the tags

Mitigation:-

• Lot of brain storming, evaluation of various technologies and vendors led us to the selection of right technology.
• Frequent dialogue with key stake holders, making them participate in the implementation, taking their feedback/ concerns and addressing them suitably and bringing about clarity and transparency in As-is and To-Be process supported by strong commitment and enforcement of the new process.
• Issue wise tracking, debugging, root cause analysis and incorporating the learning into refining the coding
• Correct orientation of readers, proper configuration as per location requirement, ensuring traffic flow aligned with reader locations, shielding from interference etc.

Benefits and how the solution deployed has helped the customer

• Drivers can check a dashboard on a large LED Smart TV located in the parking yard to know when their turn comes for loading cement, and this has led to more timely movement of trucks through the loading process. Early alert also helps them plan their other activities.
• Now, trucks are preassigned for loads and get queued up on the assigned loader only with due validations to match trucks with loader capabilities.
• Managers can track the movement of trucks during each stage, including arrival in the loading areas and departure from the plant, and know when a maximum allowable number of trucks are in the facility.
• The company can now more easily keep track of which trucks are available in the parking yard on a real-time basis. This increased visibility of available trucks allows plant logistics team to more efficiently schedule dispatches, which is leading to improved customer satisfaction.
• With automatic control of the number of vehicles inside the plant, the predefined routing of vehicles based on location, and tracking the type of order (whether it's outbound or inbound), and the reduced physical movement of truckers outside their trucks, the safety conditions within the plant have improved substantially.
• The new system has also reduced paperwork and manual checks. The entire process is electronic, and drivers don't even have to leave the trucks while going through the plant.
• Reduce the average time it takes a truck to move from entry gate to exit by about 40%

Impact on business performance:-

· Cost Savings

• On an average we could gain approximately 1%-4% freight reduction through reduced detention, more no. of trips per truck etc.
• At the same time the impact on improvement in vehicle and traffic safety has been enormous which cannot be directly computed in rupee value terms.

· Improving Market Share

• High road volume plants post RFID implementation, have been able to manage smooth dispatches all through the months. Even with lesser trucks available at times, the plant operations have been not impacted with almost nil down times of packers due to non-availability of vehicles.

· Employee Productivity

• The project has helped in achieving better Quality of work life for all stake holders right from the employees to the external stakeholders
• The real time visibility has led to reduced physical movement of human personal from yard to plant
• One person per shift is able to manage multiple weigh bridge operations as the manual data entry has reduced
• Drivers are not required to get down at any stage of the shipping cycle. Moreover there is system based auto-cap on the total no. of vehicles inside plant at any point of time. This has reduced stress levels on traffic marshals, safety officers who were always on their toes to manage inside plant vehicle and human traffic
• Seamless real time SAP integration has reduced manual data entry into the system thus allowing the person to engage in other activities
• The logistics team now is able to focus more on planning rather than the day to day mundane operations and fire fighting.

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