Guest Columnist: Jeanie Johnson Executive Director Reusable Pallet & Container Coalition
Of multi-use RFID tags on reusable containers
A groundbreaking study has been launched that is expected to yield significant cost and tracking opportunities for the meat-processing industry. The study will explore the economic benefits and increased supply-chain visibility achieved through multi-use Radio Frequency Identification (RFID) tags on reusable transport containers. The anticipated results will demonstrate enhanced product and container tracking as well as reduced shrinkage and packaging costs.
The study is being commissioned by the Reusable Pallet & Container Coalition (RPCC), an industry-wide trade association representing manufacturers, poolers, distributors, and others involved in the reusable transport packaging industry. The application of RFID technology to transported goods has been driven by the need for retailers, such as Wal-Mart and Albertsons, to track product as it moves through the supply chain. In addition, consumer packaged goods companies, such as Gillette and Proctor & Gamble, as well as governmental agencies, have similar demands for increased tracking and security.
To date, the use of RFID tags on expendable containers, such as corrugated boxes, for shipping meat and other commodities has been too expensive to integrate successfully into the supply chain. The costly tags are disposed of along with the limited-use containers, creating both an economic and environmental burden. At the same time, the meat industry has lagged somewhat in adopting reusable containers because of the perceived challenges of managing and tracking them throughout the multi-faceted supply chain. Moreover, if shrinkage occurs (as it does to some extent in any packaging system), the meat processor or third-party pooler bears the loss.
The ability to apply RFID tags to reusable containers would address these issues and bring increased tracking and security, and reduced cost to the meat industry. The RPCC believes that its tri-phase study will demonstrate that the use of RFID technology on reusable transport packaging delivers a positive return on investment (ROI) along with other significant benefits.
RFID can provide real-time data, enabling meat processors to see where shrinkage — of both the containers and the meat within — occurs. Processors also can gain valuable data on whether their product is moving at an acceptable pace through the supply chain and maximizing product shelf life. In addition, temperature readings provided by active RFID tags can alert processors if and when the cold chain has been broken, leading to product spoilage. By identifying breakdowns in the supply chain, meat processors can address them and gain more efficient utilization of their assets.
The RPCC initiative is the first industry-wide study of its kind in the United States. Some data are being generated by field tests on reusables in Europe; however, U.S. studies have focused almost exclusively on one-way, expendable packaging. Other studies have been limited and the results proprietary. RPCC will make the results of this rigorous, objective testing available to the industry.
In the first phase of the project, RPCC will work with the PolyGait-RFID Research and Development Laboratory at California Polytechnic State University at San Luis Obispo. Leading researchers at the university will test the durability of EPC-compliant, Gen 2 RFID tags to determine whether they can survive the long use cycle associated with multiple re-use of containers made of wood, steel, plastic and other materials. The RFID tag must be as durable as the reusable containers through each full cycle of the supply chain.
In the second phase, the RPCC will develop an economic model for integrating the RFID tags with reusable transport packaging. Quality Logistics Management (QLM), an EPCglobal-certified Solutions Provider, will oversee each phase of the RPCC study, collect and analyze the data, and present an industry white paper with the results.
Upon successful completion of these first two phases, RPCC will conduct a field test this fall with approximately 1,500 RFID-enabled returnable containers. The RPCC plans to conduct the pilot with a grower/shipper of perishable goods, a major retailer, and other key players in the supply chain. Because perishables — especially produce — are shipped under extremely demanding conditions, a successful field test with perishables will be convincing evidence of the feasibility of using RFID technology with reusable transport packaging in the meat-processing industry and virtually any other application.
The scope of the test supports RPCC’s continuing research on the effectiveness of reusable packaging with perishable goods. In 2003, the coalition issued recommended guidelines to make it more economical and easier for the meat industry to integrate reusable containers into the supply chain. At the time, there were three issues blocking the implementation of reusable containers by the meat-processing industry: concern for food safety; a lack of uniformity in the size of the containers; and concerns about conversion costs. To address these issues, RPCC formed a task force comprised of Albertson’s, Kroger, Wal-Mart, Perdue, Tyson and 12 other advisors representing leading retail supermarket chains, red meat and poultry processors, and internal packaging companies. The task force achieved consensus for a reusable packaging system that is easy to implement and specific in its recommendations, yet flexible enough to allow for future innovation. This study was followed in 2004 with the coalition’s publication, “Standards and Guidelines for Sanitizing Reusable Plastic Containers,” an in-depth methodology for effective sanitation processes for meat and produce.
Since these studies were made available, the meat-processing industry has steadily adopted resuables as a viable packaging option. Today, major retailers are accelerating ways to expand or integrate reusables into their meat transport systems. In addition, several case-ready beef, pork and grind producers are realizing the benefits of returnable packaging, citing plant efficiency gains, product damage reduction and quicker, more thorough, quality auditing. The high year-round volume and limited shelf life of meat products drive high turnover of containers, and high turnover results in increased ROI.
It is expected that the business case for reusable containers will be highlighted — and once again confirmed — through the demonstrated viability and cost-effectiveness of RFID tags on reusable containers. It will also be a happy chapter for the meat-processing industry, resulting in enhanced tracking of location, condition and status of assets, streamlined supply-chain processes, increased asset utilization, and reduced waste — a groundbreaking launch indeed.