Tracking of Returnable Packaging and Transport Units with active RFID in the grocery supply chain

Abstract

The fresh products supply chain still has room to improve and increase efficiency and even become an intelligent supply chain by means of automating simple but valuable data flows which will be the foundations and first stage for developing new value-added services. The Spanish company ECOMOVISTAND has developed an innovative and ecological packaging and transport unit, called MT, for the grocery supply chain, which can be used in the entire product cycle; that is, the MT serves (1) as packaging at the producer, (2) as transport unit, (3) as storage at warehouses, and (4) as display stand at the supermarket, all in the same mechanical system, being thus a Returnable Packaging and Transport Unit. An MT needs the support of information technologies to achieve its true potential. In this paper we show the work developed in collaboration with ECOMOVISTAND in order to turn the MT into an intelligent product platform by embedding Active RFID tags. Data flows are integrated into an information system, called MEGASTAND, which allows to track MTs over the entire supply chain and provide value-added services to the customers.

Introduction

A quick look at the supply chain of consumer goods reveals that traditional procedures are still most common in the landscape. Even though these procedures have become highly optimized, it seems that a technological ceiling has been reached. In other words, cutting down the costs of a particular process of the logistics and global supply chain, i.e. from the producer or manufacturer to the end consumer, requires nowadays a huge effort [1]. Nevertheless, the sector keeps seeking a greater degree of automation that might go beyond the actual concepts, procedures, and assumptions. Partly, this search for innovation is a consequence of larger retailer mandates on suppliers [2] but also of increasingly stricter regulatory compliance [3], [4]. And both retailers and regulatory bodies have strong reasons for their requirements. Just a closer look on how the supply chain operates may back up some of these reasons, as we will see.

A typical supply chain is a complex amalgam of actors which need coordination, collaboration, and information exchanges among them to increase productivity and efficiency [6], [7]. Every day millions of transport units (cases, boxes, pallets, and containers) are managed worldwide with a limited or even with a lack of control and knowledge of their status on real time (visibility on the supply chain) by the actors. As an example, CHEP [8], the world’s largest pallet and container leasing company, has more than 285 million units, of which more than 200 millions are wooden pallets. They have to face logistics and economical problems to provide on time service with a bounded quantity of pallets due to the inaccuracy on where a pallet is and for how long it has been there. Thus, it is not surprising that major retailers push to finish this lack of control by forcing suppliers to adopt appropriate technologies (the Wal-Mart mandate [2], for instance).

Let us now look at our target sector, the grocery supply chain: fresh fruit and vegetables. All over the logistics supply chain millions of pallets are disposed every year only in Europe. Even though millions of these wooden pallets might be reused, it is still necessary to mass-produce new ones every year. The several levels of fresh products packaging (primary, secondary, and tertiary) generate a variety of residues depending on the stage of the product cycle. In fact, this sector is responsible for the generation of thousands of tons of all kind of residues just in Europe every year. The European Union, aware of this problem, has passed demanding packaging directives to be complied with [3]. The environmental policy goals are: to decrease or even to prevent the use of packaging, to recover and recycle all residues, and to make the producer responsible for the waste, as well as for the costs of recovering and recycling. These rules are crucial for a sustainable growth, but pose an extra cost for the actors of the supply chain. In addition, there is another important European directive since January 2005, the traceability of consumer goods [4]: it forces to register any steps, used materials, manufacturing processes, etc., during the entire life-cycle of a product. If a batch in bad state is found, it must be recalled from the market as quickly as possible. Therefore, there must be an efficient procedure to trace the affected batch with absolute guarantees [5]. The traced information must be registered for a few years, which gives a hint of the vast amount of information to be collected, processed, stored, and managed. Finally, controlling the temperature of perishable products along the supply chain (cold chain control) is an important issue because of both sanitary and economical reasons [9]. As concluded in [10], cold chain management requires very careful temperature control and quick reactions, that is, accurate and timely information on where and when the cold chain has been broken. With the previous examples, we have just brought a few of the issues within the context of grocery supply chain, which support the need for an intelligent supply chain that provides automated collaboration and information exchanges among their actors [11].

Cold chain control and traceability demand an increase in the in-transit visibility of a pallet and its carried products. Therefore, automated collection of information flows in real time or, at least, in a bounded time is becoming increasingly important for the grocery supply chain. However, current data capturing technologies are based on attached barcode labels. Barcode technology is a robust and cheap solution with well-known and tested systems. Nevertheless, scanning a multitude of labels is a slow, one-by-one and error-prone process [12]. Hence, Passive RFID has drawn a lot of attention as a revolutionary data capturing technology to be used both on pallets or on cases. However, Passive RFID deployment at the supply chain has not taken off as clearly as foreseen. From our point of view, in accordance with reference [13], pp. 18, two reasons may explain this situation:

• Cutting down costs. Because of the high number of transport units, the sector concentrates on cutting down their cost. A wooden pallet is already a cost-effective solution. It seems that users still do not clearly perceive benefits in relation to the additional cost of adding a passive tag to each pallet.

• RFID perceived utility. RFID is sometimes perceived as a mere substitute of barcode labels within the already established procedures and services, rather than as a potential generator of new value-added services, which avoids failures and saves money.

Regarding utility, the obvious solution is to offer better and new services. Indeed, RFID can generate new data flows but it is useless by itself if there are no better and new value-added services based on data management [14]. Regarding costs, the previous literature [12], [15] has identified an additional key component needed to obtain a quick amortisation of the investment: the use of returnable transport units. Clearly, returnable transport units and adequate tracking technology complement each other when addressing the aforementioned issues: while returnable transport units may help to comply with waste regulation, apart from other operational and ecological benefits, there is still a need for procedures that ensure efficient and loss-free management of containers [15]. On the other hand, an appropriate RFID technology not only supports cold chain control and traceability, but also provides asset visibility, which, in turn, may improve management of containers [14].

The Spanish company ECOMOVISTAND [16], aware of the issues discussed above, has developed an innovative and ecological packaging and transport unit, called MT, for the grocery supply chain. The MT goes one step ahead of conventional reusable containers by providing additional interesting features (see Section 2), and it may be used as a standalone solution. However, the company is highly interested in offering tracking, tracing and cold chain control as value-added services. The Telematics Research Group from the Polytechnic University of Cartagena is collaborating with ECOMOVISTAND on developing the foundations of an innovative logistics system by means of Active RFID and the application of Information Technologies. In this paper we show the architecture and design aspects of MEGASTAND, the RFID and middleware support for the MT. It covers both RFID device development and control and management middleware based on Web Services.

From a methodological point of view, this paper contributes to design science research [17]: a problem of relevance (residue reduction, traceability and cold chain control) is presented; an artifact that addresses the problem is shown (the MT with embedded tracking and monitoring functionality, and the integration software); the design solution is based on both business and technical requirements, and the system components and alternatives are discussed with rigour (as derived from the effective use of the knowledge base [17]); and, finally, instances of the artifact are described (our implementations). However, as we have recently started a pilot trial, a thorough experimental evaluation of our design is left as future work. All the design has been refined in an iterative process, in close collaboration with the company.

The rest of the paper is organized as follows. MT features and the company business model are presented and discussed in Section 2. Technological requirements to control and manage a population of MTs over the supply chain are discussed in Section 3. The MEGASTAND system architecture is described in Section 4, focusing on the developed Active RFID system and the Web Services solution. Related work is reviewed in Section 5. Finally, Section 6 provides conclusions and future work.