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Many companies lease pallets and other logistics containers in order to offload the cost of maintaining their own pallet fleet. However, managing the return of these items has often proven challenging for pallet providers. Intelligent Global Pooling Systems (iGPS), which operates an all-plastic pallet pool, has solved this problem using an RFID-based asset tracking system ...
iGPS Can Monitor All-Plastic Pallet Pool in Real-Time
Many companies lease pallets and other logistics containers in order to offload the cost of maintaining their own pallet fleet. However, managing the return of these items has often proven challenging for pallet providers. Intelligent Global Pooling Systems (iGPS), which operates an all-plastic pallet pool, has solved this problem using an RFID-based asset tracking system.
iGPS (www.igps.net), based in Orlando, was formed 2006 by a number of executives who had previously worked for pallet provider CHEP International, an early adopter of RFID for pallet tracking. The company manages a pool of plastic pallets for grocery, beverage, home improvement, pharmaceutical and consumer electronics customers.
The RFID tags iGPS has embedded in its pallets are used to track the location of their pallet assets to prevent loss and theft, and can be used by iGPS customers to help manage their supply chain operations.
The company contracted with Dallas-based Xterprise (www.xterprise.com) to design business applications for the pallet tracking system. Xterprise developed the Intelligent Stock Use and Movements (iSUM) application for iGPS as its pallet pool transactional management system. The software, based on the Xterprise Asset Manager (XAM) application, was built on a Microsoft BizTalk RFID Server framework.
"We shopped around for an integrator that could assist us with the data capture front-end, and that's when we came across Xterprise," says iGPS CIO Jack Sparn. "They already had expertise in the area of tagging assets, and of building systems and solutions for reading RFID tags and using that data for tracking purposes."
The two companies began discussions in July 2006, and had the system up and running by that October.
iGPS' manufacturing partners embed RFID tags in the plastic pallets at the point of manufacture. The serial number encoded on the tags is then uploaded into the iSUM database before the pallets are shipped to iGPS facilities. The RFID tags in the pallets are based on the Electronic Product Code (EPC) Global Reusable Asset Identifier (GRAI) standard, which provides a unique identification for each pallet. There are four tags in each pallet to ensure readability.
iGPS scans the tags at receipt using an RFID reader portal, hand-held reader, or forklift-mounted readers from Alien Technology and Motorola. Once a customer orders a shipment of pallets, they are scanned again on the outbound side before being handed over to a third-party logistics carrier for transportation to the customer.
After customers receive the pallets and load them with merchandise, the pallet tags are scanned before being shipped to retailer locations. For customers who can't read the RFID tags, a non-removable bar code label (which also includes human readable information) is placed on the outside of the pallet.
Edge servers running the iSUM application at the iGPS depots and customer locations are used to collect data on the pallets. As the pallet labels and RFID tags are scanned, the edge servers push that information up to the central iSUM system so that iGPS has real-time data on the location of its pallets.
"The edge iSUM servers send data to our central server for consolidation, and that's passed to our back-end ERP system," Sparn says. "The system also transmits information to the edge servers at the depot to provide the schedule of orders and shipments that are about to come in at that location."
Retailers receiving the pallets then arrange to return them to iGPS. "Once those pallets are received, when the retailer has a bunch of pallets on their back loading dock, they either calls us for pick up, or they may backhaul the pallets depending on the arrangements they've made with us," Sparn says. "When the pallets are received back at the depot, they are scanned in again."
Customer-dependent rules are set up so that system will alert iGPS if a pallet has gone missing. Using the tracking data, the company can triangulate where the pallet left the system. This provides enhanced asset control for both iGPS and its customers.
Using data mining tools in iSUM, the company can also identify where pallets are delayed in the supply chain, and take corrective action. According to iGPS, the company's trip time is less than two-thirds that of a traditional pallet pooling company because of the high degree of visibility.
Billing is also improved, because iGPS has a more accurate record of pallet use and loss for each customer.
"Different customers are interested in different types of information," Sparn says. "We're providing more and more Web-based reports so that customers can look at information on their orders, shipment status, and other data."
iGPS has since landed a number of major contracts, and in January ordered 4.5 million RFID tags from several manufacturers, one of the largest tag orders ever placed. Among its publicly announced customers are Martori Farms, one of the nation's largest shippers of melons and broccoli, and Imperial Sugar.
Although many companies currently use cheaper wood pallets, demand for reusable plastic pallets has increased in recent years because of fears about cross-contamination from meat and other food products shipped on wooden pallets (which are often scrapped afterward), and new International Plant Protection Convention (IPPC) requirements for the fumigation of wood pallets to prevent the spread of invasive insects. Plastic pallets also last longer and are lighter than their wood counterparts, which can save on freight costs.
As more retailers require RFID pallet tagging, iGPS customers may also be able to utilize the existing RFID tags to meet those requirements. Sparn sees the potential to integrate the iSUM system with customer's internal supply chain systems. For larger companies, iGPS has already integrated with a number of warehouse management systems to tie shipment information to the serial number on the pallet. That way, customers can automatically notify the iSUM system when pallets have been shipped to a retailer without scanning the bar code or RFID tag on the pallet.
The next step would be using that linkage between the serial number on the pallet and the data about the specific shipment to meet retailer requirements for pallet tagging.
Earlier this year, Wal-Mart announced that it would begin charging a fee for each pallet not tagged coming into its Texas distribution center for shipment to Sam's Club stores. In October, the company will require pallet-level tagging for four other distribution centers, and an additional 17 DCs will be brought online in 2009.
"All we'd need to do is map that record to the product information," Sparn says. "We should be able to marry our RFID tracking number to the product information. The receiver of the pallet, once he scans the RFID tag, by accessing our database could know all the other information about what's on the pallet. Upstream, the manufacturer would then know what happened to the product while it was on the pallet."
This would allow suppliers to meet retailer mandates without creating an additional RFID tag for the pallet. "We're seeing interest from the manufacturers, because they would prefer not to go through the additional steps of tagging the shipment container," Sparn says. "The receiver of the product benefits because they can scan that pallet or container the same way every time, regardless of what commodity is on it."
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