Question

Hardee Transportation

Hardee’s line-haul tractors currently are equipped with the Qualcomm Satellite system. This allows Hardee to maintain real-time visibility of its tractors while they are either in motion or at rest. Trailer visibility is only available when it is hooked to a tractor. Hardee does not currently have electronic visibility of manifest/bill of landing (BOL) data in its trailers. In other words, Hardee’s satellite system will tell it that tractor #3235 is currently hooked to trailer #13145. What the system does not tell it is who the driver is, what the vehicle weight is, or which BOLs are on the trailer. To this point, Hardee’s system has served them well.

Hardee services many large manufacturers in the consumer goods industry whose main customers are large discount and specialty retailers. A current movement in this industry is the adoption of radio frequency identification (FRID) tags for full, real-time, visibility of inventory in the supply chain. Most of these efforts have taken place in manufacturing facilities, distribution centers, and retail stores. Some initiatives have placed RFID tags on pallets, cases, and individual consumer units. On of the disadvantages of these tags is the cost. Because of current low demand of these tags, each one can cost anywhere from $0.5 to $1. This cost could be prohibitive for large-volume customers.

One of Jim O’Brien’s large customers (a manufacturer of consumer products) has begun a major initiative with one of its retailers to place RFID tags on their pallets. A future pilot program will start placing these tags on each individual shipping case. Jim’s customer wants Hardee to become part of the pallet pilot because of the strategic role the carrier plays in this retail supply chain.

Jim knows little about RFID technology. What he does know is that the tags are expensive, require special receivers, and have a limited transmission distance (5 to 10 feet for passive tags). Hardee would need to develop the technology to track these pallets not only while sitting in Hardee’s yard or on its dock but also while they are in transit. Jim is really not sure what this will mean for Hardee and how it will change its technology requirements.

What would you tell Jim about RFID? How will this technology impact his carrier’s operations? How will he implement it while not incurring a huge expense? What will happen when the tags are placed on individual case?

Answer 1

I will educate Jim about several benefits and usage of RFID (Radio-frequency identification) technology. Some of its benefits are:

· RFID tags can hold approximately 2KB of information. Useful information that can be stored in RFID tags includes pallet size and weight, its origination, its final destination, and other such information.

· It has special feature of automatic inventory modification. This feature helps in minimizing the risk of missing a pallet.

· By covering warehouse with RFID readers, real time tracking of every RFID tag is possible.

· It ensures secure supply chain. By tagging the pallets before they leave the manufacturing units, they can be easily tracked at every stop.

RFID technology will impact his carrier’s operations by leveraging its functions. This is possible by ensuring real time tracking of carriers. RFID will also help in ensuring that his carrier’s operations are secured. It will also increase the effectively and efficiency of his carrier’s operations.

He can implement RFID while not incurring a huge expense if he implements it on less-volume customers initially. It is identified that the cost of RFID could be prohibitive for large-volume customers.

If the tags are placed on individual case than two things will happen; first, it will be easy to track every case and second, it will increase the cost of tags tremendously.