A pilot project that involved tagging 900,000 pieces of returnable packaging ended up saving Caterpillar about $5 million in the first year of the project.
“We had 2.4 turns per year on each piece of packaging, which was not good,” Todd Farwell, innovation architect and global deployment champion for Caterpillar, told MHI, the well known material handling, logistics and supply chain association.
“It was detained everywhere in the supply chain. We put in [an RFID] tracking system and started monitoring our own production facility behavior and we got 12 turns improvement in just one year.”
For those companies considering deploying RFID, Farwell emphasizes that creating a pilot to demonstrate the concept is crucial. “You need to demonstrate the concept and how this works, how much money it saves, and put the demonstrable metrics and results in front of people to show what you’ve done.”