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RFID tags make the movement of goods faster and more reliable. For goods with a high water con- tent, which could interfere with radio signals, flag tags are used. The transponder on a flag tag stands up from the package surface like a small banner.

  • RFID Applications

that the palette has been correctly read,” explains Hunold. After the truck has been unloaded, a glance at the monitor will reveal whether the de- livery is complete. Missing pallets show up in red.

In the future, paper delivery notes won’t be necessary, says Hunold. At the supplier company, the dispatch of goods is registered via RFID and an electronic confirmation is sent to the ware- house. When the goods arrive in Norderstedt, the RFID system automatically registers the pal- lets. Within seconds, the central computer then compares the order with the goods actually de- livered. “Another advantage is that we can mon- itor the goods without interruption,” Hunold adds. The system automatically registers when goods leave the factory or the forwarding agent. Today, 30 of the company’s approximately 300 suppliers are linked with the RFID system. In coming months, the goods dispatch area and

gluing the transponder tags onto such products in such a way that one edge sticks up like a ban- ner. These “flag tags” can be easily read.

Monitoring Valuable Products. In addition to Rewe, a number of other companies are working with Siemens on RFID applications. Otto Group, the world’s largest mail-order house, and the Hermes shipping company, for instance, launched a joint pilot project in this area in August 2004. “We wanted to test whether RFID technology was feasible in prac- tice and whether it would enable us to moni- tor goods continuously,” says Roland Nickerl, head of logistics systems development at

ventional bar code system. As it turned out, the RFID system registered the goods dispatch at Otto, the incoming and outgoing move- ments at Hermes, and the delivery to the cus- tomers with an accuracy of more than 99 per- cent. The companies were impressed, and for the past few months they have been using the system in their everyday business. Specialists in Hamburg are now evaluating the data they have acquired to find out, for example, where goods get lost. “In some cases,” says Nickerl, “mistakes are made when the goods are packed or loaded, and some articles end up on the wrong shelf.” Transponder technology is now creating the transparency that is needed

Radio signals make it possible to read a whole carton of tagged items within seconds

even the shelves and forklifts will be equipped with transponders. That will enable the forklifts to automatically detect mistakes. If a driver is about to put a palette in the wrong place on the shelves, a warning signal will sound, thus avoid- ing time-wasting searches for misplaced goods.

At Rewe’s RFID lab, tests are conducted to find out how RFID tags perform in practical applications. The transponders (right) are glued under the paper labels of packages. The long strips are the antennas, and the black point in the middle is the microchip.

Goods with Flying Banners. Although RFID transponders have been in use for a number of years for tasks such as marking vehicle bodies on automakers’ assembly lines (see Pictures of the Future, Fall 2003, p. 14 and Fall 2002, p. 19), many practical questions still remain unan- swered. For example, it’s well known that metal interferes with the transponders’ reading process. But for some time it was impossible to know beforehand whether a given palette of vac- uum-packed coffee or jars of pickles would cause problems. Researchers at Nordersted solved this problem by testing 1,600 products for readabil- ity. In the process, they learned that products with high water content or packaging that was made of aluminum interfered with the radio sig- nals. The RFID specialists solved the problem by

Otto. The aim was to improve the monitoring of valuable goods in particular. SBS initially equipped some 20,000 digital cameras, mo- bile phones and notebooks with RFID tags and supplied readers for the goods dispatch area at Otto and five Hermes depots. As Nickerl ex- plains, the advantages are obvious. “Unlike bar codes, tags can be read even when they’re scratched or dirty. Furthermore, they can also be used for bulk shipments.” In other words, RFID makes it possible to read a whole carton full of tagged items without having to open it.

But for Otto, still another key feature of RFID was crucial. “For us, the most important thing was the precision of the reading process.” The company wanted the RFID sys- tem to operate at least as reliably as the con-

Siemens is leading the way in development of radio frequency identification solutions (RFID). Now, major customers are starting to implement this new technology on a large scale. Initial applications in the field of logistics have been extremely promising.

Taking Stock

for an analysis of transport channels. “We can achieve significant cost savings with RFID, but because of high associated operating costs we have to plan our application strategy carefully,” says Nickerl. “At a cost of less than three euro cents per transponder, it would be worthwhile to put RFID tags on around half of our items.”

About 40,000 individual items are cur- rently equipped with transponders. Because of data protection laws, the tags contain only the packages’ article and identification num- bers, but no personal customer data.

Another major obstacle to the mass use of transponders on one-way packages such as milk cartons, as opposed to bar codes, is the high price of the transponders. RFID tags made of silicon currently cost about 30 euro cents. But a solution is within reach. In the fu- ture, cheap transponders will be printed by the thousands on foil, thanks to plastics that conduct electricity and can be processed in the same way as ink from a printer. One of the companies driving this technology is Erlan- gen-based PolyIC, a spin-off of Siemens Cor-

Pictures of the Future | Fall 2005


T he big food warehouse is humming like a beehive. Bright-red forklifts whir as they move back and forth. They transport pallets of food cartons and lift goods up to shelves that can be as high as 18 meters. The Rewe GmbH ware- house in Norderstedt, Germany, can accommo- date about 30,000 pallets. About 3,500 pallets containing 1,600 different products, from canned goods and pasta to table wine, are brought every day to the distribution center on the outskirts of Hamburg. From here, they are transported to supermarkets all over northern Germany. Every day, warehouse workers load approximately 100,000 cartons from the pallets on to hundreds of small rolling containers that are then loaded onto trucks for the next stage of their journey. Of course, Rewe has an electronic goods monitoring system that supervises the complex movements of the pallets. But so far, the goods have been accompanied by delivery notes made of paper. That’s about to change. With the help of experts from Siemens Business Services (SBS) and other companies, Rewe is planning to switch to a paperless goods move-

ment system. The new system will be made pos- sible by RFID (Radio Frequency Identification) transponders, also known as RFID labels or tags. The tags contain a tiny chip and an antenna. In contrast to traditional bar codes, the chip can store more individual pieces of information, such as the item’s destination, its “best by” date and the producer’s address. A reading device can call up this information from a distance of approxi- mately one meter using a weak radio pulse.

“Previously, a warehouse worker had to check every individual pallet and confirm its arrival within the system,” says Meik Hunold, deputy di- rector of the RFID project at Rewe. The use of RFID tags will considerably speed up this process in the future. Checking will then be even faster than it was with bar codes, because in order to register a bar code a warehouse worker has to read every individual code label with a hand scanner. By contrast, when truck drivers unload their vehicles the pallets provided with transpon- ders are simply rolled into the warehouse through an RFID gate that registers the RFID in- formation automatically. “A green light indicates

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