June 2007 | Case Studies | I.T. Toolkit

Box Ho! RFID Replaces Telescopes

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Tired of playing hide and seek with its containers, CIMC finds a new RFID system to help locate product in its yards.

A nearly endless variety of products moves around the globe in shipping containers. For China International Marine Containers Group (CIMC), though, the container itself is the product. And just like any other product, the shipper needs to keep track of its location.

The world's largest manufacturer of shipping containers, headquartered in Shenzhen, Guangdong, China, CIMC moves its product out of more than 20 manufacturing plants and 40 container storage yards across China. It delivers to major shipping and leasing companies in Asia, Europe, and North America.

Although each container is made to order, the boxes look an awful lot alike. And in a yard that relies on workers to manually record ID numbers from the sides of containers, then spot and retrieve the right containers as needed, similarity breeds inefficiency.

In the typical CIMC facility, workers receive a container at the storage yard gate, record its arrival on a shipping list, direct it to a quality checking zone and, if it passes inspection, assign it to a forklift driver who takes it to a storage zone.

The driver writes down the container ID and location, and yard staff enter that data in CIMC's information system. When it is time to retrieve the container for delivery to a customer, a driver hunts for the box in the location noted on the pickup list.

Scoping the Yard

Workers use telescopes to locate containers in the yard. But that method doesn't always work well.

"The containers are so packed in, even a telescope is sometimes not able to make out the container ID," says Shouquin Zhou, director of CIMC Smart and Secure Container Group.

The manual process presents other challenges. When a worker writes down a container ID, for example, it might take one or more days for that data to be entered into the computer system. Or, a worker writes a number incorrectly, sending a driver to the wrong storage location.

And, the extra time needed to hunt for misplaced containers while all the other work of the yard continues can translate into higher costs. "Sometimes the yard has to rent extra forklifts," Zhou notes.

Further problems arise because supervisors and employees use two-way radios to communicate across storage yards.

"Misunderstandings occur because voices don't always come across clearly," Zhou says. "And workers have to rely on memory to complete assignments correctly."

Not surprisingly, CIMC executives wanted to implement technology that would capture information about container movements in real time, eliminate paper, regulate daily workflow, and improve the ability to plan work.

CIMC has achieved those goals at two of its facilities, and hopes to implement similar changes at the others over the next three years. The improvements come thanks to a yard management system using passive RFID tags that CIMC developed with Laudis Systems, Edison, N.J.

Founded four years ago, Laudis Systems provides RFID-based technology for tracking assets through the supply chain.

"The system works for high-ticket, high-volume products that are susceptible to being misplaced or lost," says Laudis CEO Frank Ritota.

In the United States, PPG Industries uses the Laudis Sequor system to locate materials and products in its Tipton, Pa., auto glass plant. Laudis is also developing a system for a New Jersey computer recycling and asset management company.

Come Together

For the container yard application, the two companies collaborated to adapt Laudis' system to CIMC's requirements; CIMC designed the RFID tags. CIMC chose to work with Laudis in part because it was impressed by the vendor's RFID experience and three-dimensional location capabilities.

Laudis' software provides a 3D graphical view of a company's assets. In the PPG plant, for example, four pallets of product might be stacked one on top of another.

"The system can zoom down into the third pallet from the top and identify its contents," Ritota says. "It also can identify the height of the pallet stack through RFID readers and computers installed on the material handling equipment used to put away and retrieve product."

At first, CIMC considered using an active RFID tag, which is powered continuously by an internal battery. Instead, Laudis helped it design a ruggedized passive tag, which powers up only when it receives a signal from the reader. "The passive tag costs $5; an active tag costs $50," Ritota says.

A flexible plastic housing protects the tag. "The tag can be applied to a container, then forgotten," Ritota says. "It was designed to withstand the rigors of shipping."

One factor contributing to the implementation's success is the use of passive RFID tags on metal containers.

"Metal can definitely wreak havoc by creating interference challenges for the wireless RFID technology," Ritota says. Strategic use of insulating materials solves this problem, he adds.

Along with the forklift readers, which scan the tags as containers are put away and retrieved, the system uses readers at the yard and factory gates to scan IDs as containers pass in and out.

CIMC started using the system at one storage yard in September last year, and at a second this April. Under the new process, as a container passes out of the factory gate, an RFID tag is attached and a reader records its ID. At the yard gate, a second scan notes that the container has arrived for storage.

Using a CDMA wireless network, the reader transmits the ID to a system on a forklift truck, which then displays instructions to the driver. When the driver places the container, the system records its location.

Forklift drivers don't have to enter data as they work. "We've kept them out of the loop, eliminating human error," Ritota says. Drivers could make a mistake, though, by failing to follow instructions displayed on the screen. If that happens, the system sends an alert.

"The system tells drivers what to do and where to go," Ritota notes. "If a container is put in the wrong place, an alarm notifies the driver."

Because the system records the container's location, the driver knows exactly where to look when it's time to retrieve it. As the container leaves the yard, the reader there scans it for a final time to note its departure. Then the tag is removed for reuse.

The new system provides more accurate and current information than the previous process. By eliminating manual procedures, it allows CIMC to check containers in and out in less time, saves time spent searching for misplaced containers, and reduces labor.

CIMC expects to see a return on its investment within one year. To date, the system has produced these results:

  • Eliminated four searches for misplaced containers per month.
  • Eliminated the loss of about eight containers in transit per year.
  • Reduced by 50 percent the need to lease forklifts for the yard during peak demand times.
  • Improved shipping accuracy by nearly 100 percent.
  • Eliminated one hour's worth of yard checks per day.

Over the next three years, CIMC plans to install the system in about 40 of its yards, as well as in seaport facilities. "CIMC's goal is to make RFID tags an essential part of the container to increase global supply chain management efficiency and reduce asset management costs," Zhou says.

Laudis is pursuing other contracts in China, including one aimed at tracking barge traffic as it travels from the interior to the coast. The company already has a contract to implement a system at one port.

"If we do well with it," Ritota says, "we have an opportunity to track barge traffic down the Yangtze River, all the way to Shanghai."

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