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AIAG Continues Work on Container Tracking Standard
Article courtesy of Frontline RFID
Sept. 7, 2005 -- The Automotive Industry Action Group (AIAG) has made progress on updating its RC6 guidelines for returnable container tracking. The group is currently examining automatic identification, data collection, and supplier electronic communication technologies -- including RFID -- that could help manage returnable racks, pallets, and totes in the automotive industry.
Members of the work group provided an update at the recent AutoTech conference in Detroit, along with results of a study on returnable container challenges conducted by the AIAG and AMR Research Inc.
"We don't know the full cost of the problem," said Angela Fisher, manufacturing information systems manager at Lear Corp. "But the process feels like something that is not in control and is probably costing us a lot more than we think it is."
The AIAG work group has approved a business case model and plans to move forward with a pilot once appropriate technology has been identified. The RC6 guidelines were first established in 1991.
Fisher said the group wants to leverage existing AIAG, ANSI , and ISO standards, and that the new guidelines "will not eliminate bar codes or human-readable information" on the containers. The group will avoid mandates and use RFID "only where it's sensible," Fisher said.
According to Kevin Mixer, research director at AMR, replacing reusable racks and totes costs the industry more than $750 million annually. With better container management, suppliers and OEMs hope to reduce lost shipments, reduce container replacement costs, increase up time, improve production scheduling, and increase visibility.
The AMR/AIAG survey found that 76% of respondents reported having some challenges with containers. The most important operational challenges for container management were:
- Operational down time due to dunnage (18%)
- Operational down time due to lack of containers (36%)
- Expediting due to missing material or containers (28%)
The majority of respondents (61%) indicated that less than 5% of operational down time was due to container management issues, while 26% indicated that between 6% and 10% of down time could be blamed on container issues. Mixer said that vehicle manufacturers have the most pain.
When asked what percent of their container budget was used to replace non-disposable containers or racks, the majority (59%) spent less than 5% on replacements. Another 20%, though, spent 6% to 10% of their total budget on replacements, and another 13% spent between 11% and 20% of their budget on replacing lost or damaged containers.
RFID is not widely used for container tracking, although at a previous AIAG event an executive from pallet manufacturer CHEP indicated that at least one OEM was testing the technology. Other companies in the industry also use RFID in closed-loop systems.
Currently, most companies use labels or stickers to identify their returnable containers. About 6% of respondents to the survey are using RFID tags, while 30% use heat stamping.
Only 4% of respondents have a fully deployed RFID system; another 2% plan to implement in 2005, and 14% are planning to evaluate the technology this year. Sixteen percent are piloting RFID, but a full 41% have no plans to use RFID.