Returnable Transport Item (RTI) Management: Preventing Supply Chain Losses
RTIs, such as heavy-duty plastic totes, metal stillages, and specialized pallets, are the bedrock of a closed-loop industrial supply chain. But unforeseen shrinkage, hoarding by trading partners, and mishandled inventories transform these easily re-used containers into a huge cash and capital loss, estimated at millions of dollars a year for enterprises.
Radio Frequency Identification (RFID) solutions for RTI management provide absolute asset visibility, so that no containers are lost, and assets are rotated optimally through complex supply chain networks.
What is closed-loop RTI management, and why is asset loss so prevalent?
Closed-loop RTI management relates to monitoring the movement of reusable products from manufacturing plants and distribution centers through third-party logistics (3PL) providers and ultimately to retail partners.
The main cause of asset loss is the lack of automatic tracking. Manual paper manifests and static barcodes can cause cross-dock workers not to scan when moving inventory in high volumes. Here, the use of RFID solutions for retailers can be helpful to prevent supply chain losses.
Unmonitored RTIs often do not get reported and may be stolen for use on the second market or permanently lost, leading to over-provisioning of container pools by as much as 30% to cover potential shrinkage.
How does RFID automate the tracking of returnable pallets and totes?
RFID technology automates container tracking by placing a ruggedized Ultra-High Frequency (UHF) RAIN RFID tag into plastic, metal, or wooden RTIs during manufacture or a retrofit application.
RFID doesn’t need to be positioned in line-of-sight as barcodes do. An RFID portal mounted at the dock door or staging gate will automatically scan hundreds of totes or pallets at once as the forklift moves through the portal.
All tags contain a unique Electronic Product Code (EPC) and, when they are activated, will send asset ID, timestamp, destination, and payload information instantly to an Enterprise Resource Planning (ERP) platform, without interrupting material flow.
By what mechanisms does RFID eliminate RTI shrinkage and partner hoarding?
By managing container loss via the automated chain of custody and dwell-time monitoring, an RFID warehouse system helps prevent loss.
Digital Custody Handshakes: Legal custody of specific RTIs is given automatically to the receiving partner/customer for every outbound shipment.
Automated Dwell-Time Alerts: The system automatically tracks container idle time at partner locations. The platform sends automated e-notifications or demurrage fees to customers if they are overdue on container returns, which encourages customers to bring containers back on time.
Historical RFID Scan Logs: Historical RFID scan logs allow for an RTI pool to identify the exact facility, carrier, or shift the last time the asset was detected in the system to prevent disagreement between trading partners.
What ROI does automated RFID RTI tracking deliver to enterprises?
The implementation of closed-loop RTI management with RFID can provide immediate and substantial short-term returns on the investment across operations. The cost of container replacement can be reduced by as much as 90%, and idle container dwell times can be reduced by more than 40% with the use of automated portal scans.
Moreover, with manual scanning eliminated, loading docks are faster, and smaller container pool sizes mean more assets are used throughout the supply chain.
Conclusion
Unmanaged RTI shrinkage is an operating tax that can be avoided. Traditional “open loop” RFID management methods can be replaced by a continuous, automated way of knowing where assets are at all times. By having an uninterrupted chain of custody throughout each pallet and each tote, businesses overcome the loss of containers, reduce capital costs, and create resilient, sustainable supply chains.