The logistics service provider DSV is responsible for the logistics of the Road, Air & Sea and Solutions divisions for around 450 customers in the automotive sector, including automobile manufacturers such as Volvo, Audi, BMW, GM, and contract manufacturer Valmet (Daimler). DSV operates logistics centres worldwide, 20 of which are in Europe. RFID container management is an integral part of the warehouse processes at DSV sites, including Volvo Cars’ flagship site in Gent. After construction and several years of operation by DSV, it was handed over to the OEM (Original Equipment Manufacturer). The transport and logistics service provider employs RFID not only in the automotive sector, but also across industries. DSV Solutions B.V. (Moerdijk) in the Netherlands uses RFID, for example to transparently design and optimise the entire supply chain of its customer Waterpik, who manufacture dental care products.
“We have the technology and the benefits of RFID are understood, so the question is, when does the automotive industry start to use it? We would join a development project at any time!”
RFID is integrated in-house – but is the supply chain an issue?
“Several solutions facilities that we operate already provide in-house RFID. We don’t just use the technology to suit the customer – as a logistics service provider we also benefit”, explains Paul Claessen, Automotive Development Manager at DSV Road. “In our complex storage business, the technology allows us to obtain full control of local material movements. Especially in sequencing processes, we require very high reliability. In the picking process only, just 30 to 50 errors per million activities are allowed. We use all means to achieve this. But we can still become faster, better and more reliable if we use RFID in the supply chain. The latter process, however, is not as technologically developed as we would like it to be”, says the Automotive Development Manager.
Critical point in the chain: groupage
Claessen still sees potential for optimisation in the road business. A particularly critical point in the inbound business is groupage freight, which is handled via cross-dock systems as a single package or a small cardboard box: “Hundreds of thousands of packages for various automotive manufacturers run daily through our logistics centres – and shipping errors can have fatal consequences. If a small part that is not much used in assembly goes to the wrong site, in a worst-case scenario it can mean assembly line standstill – and a two-hour standstill can quickly add up to a loss of 120,000 Euros. From our perspective, these costs are a good justification for investing in technologies that reduce errors”, says the Development Manager.
Paper is no longer appropriate in the 21st century
“We don’t understand why producers have not delved deeper into RFID processes and have not yet taken the initiative to establish an integral chain together with the logisticians, particularly when you see the high requirements they have. There are many good reasons to do so”, says the expert. Claessen sees tangible benefits in the digitisation of processes, not only in cost savings: “in the 21st century, paper-based working is unnecessary in our view, insecure and absolutely not up to date”, he explains. DSV is pushing for activities to replace paper-based processes for internal optimisation. “We are creating incentives by offering discounts for our services when deliveries are paperless.”
RFID and standards for effective cross-docking
Goods delivery from different manufacturers is currently largely based on barcodes that contain different data formats. DSV uses separate software systems and EDI as well as differently configured scanners for each manufacturer. “We see that many manufacturers have pulled back from VDA standard derivatives. In practice this means that we cannot compare one label manufacturer with another. Of course, as service providers we adapt to this situation, but standardised RFID labels would very greatly facilitate the work to operate cross-docking in an effective and secure way. We are convinced of RFID technology and would join a development project at any time – we would even take over the development costs.”