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"SAP AG (NYSE: SAP) today announced a recent round of informal discussions involving the U.S. Department of Commerce, European Union (EU)
officials and other public and private leaders on the opportunities presented by
radio frequency identification (RFID)
technology — as well as concerns that may hinder its widespread adoption. "
Source : SAP
SAP RFID Technology in the Automotive Industry
RFID Technology is also known as :
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Solutions Supports RFID,
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Business Solutions Supports RFID Technology,
Real-time Inventory Visibility,
Full Line of RFID Tag Solutions,
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Main Concern about RFID Technology,
RFID Testing and Consultation,
RFID Technology Refers to Systems,
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Solutions for Produce RFID.
Today, it’s not enough for automotive companies to meet
customer requirements – they must exceed them. And to do so,
automotive companies must work closely with a multitiered,
geographically dispersed network of partners. Manufacturers
and suppliers alike must gather and share information about
products and processes across the supply chain. Consequently,
they spend time and effort trying to get systems and people to
communicate, so that everyone in the supply chain can work
with accurate and complete information.
To meet just-in-time and just-in-sequence requirements, it’s
crucial that companies in the automotive industry have the ability
to track reusable assets, such as containers, racks, bins, and totes.
Considered costs, these assets are carried on balance sheets and
must be managed and tracked. The value of these items is affected by
shrinkage, wear, damage, and the inability to locate and reuse them.
Technologies such as radio frequency identification (RFID)
bring new levels of precision to process control and the tracking
of containers and returnable packaging. Using its technology
expertise and working with experts in the field, SAP has developed
an RFID offering that is seamlessly integrated with the SAP®
solutions that are key to the automotive industry.
SAP RFID technology provides complete process support for
capturing and handling RFID data, streamlining and automating
supply chain processes, and integrating RFID information
into enterprise systems. Companies can use RFID technology to
adapt to changing conditions and events – and then drive rapid
responses through supply chain management and execution
systems. By enabling original equipment manufacturers, suppliers,
and partners to identify and track container locations,
contents, and condition, SAP RFID technology can help companies
lower operating costs while improving asset management
and service performance.
How SAP RFID Technology Supports
the Automotive Industry
RFID technology uses transponders or tags that have data
written to them that can be read by RFID readers. This enables
containers equipped with transponders or tags to be identified
automatically. Typically, a transponder contains data such as a
kanban number, container identifier, batch identifier, or other
identifier. However, the content depends on the transponder:
in general, active tags contain more information than passive
tags, which contain only one unique number.
RFID readers are installed at pick-up and drop-off points where
they read the data. Using radio frequency waves, transponders
identify each container automatically – without additional
handling or human intervention – as it passes through these
points, even if the material is packed on a palette within other
containers.
SAP RFID technology combines the virtual world of transactions,
business rules, and processes with the physical world
of products and people. It automates the execution of processes
by providing sophisticated mechanisms that distribute data
to various applications. The technology is focused on the seamless
integration of RFID data into applications, an integrated
approach that promises to extend the potential of RFID far
beyond simple compliance with customer requirements. This
approach enables automotive companies to use the technology
for automating processes and transactions throughout the
supply chain to achieve better inventory visibility, perform
exception-based reporting and event management, and, ultimately,
become more responsive and adaptive to customer
demands and market changes.
The process described above is supported by SAP RFID technology
and includes SAP Auto-ID Infrastructure, a component of the
SAP NetWeaver™ platform. SAP Auto-ID Infrastructure helps
bridge the gap between the technical and virtual worlds. On the
one hand, it connects RFID read/write systems with back-end
systems. On the other, it offers functions for managing, communicating,
and linking RFID data.
SAP Auto-ID Infrastructure takes unstructured RFID data,
parses it, translates it into useful information, and makes it available
for other business processes. For example, data can be
linked through the SAP NetWeaver Exchange Infrastructure
(SAP NetWeaver XI) component in real time for use by SAP solutions
such as mySAP™ ERP, mySAP Supply Chain Management
(mySAP SCM), the SAP NetWeaver Business Intelligence component,
and the SAP Event Management application.
What Is Kanban?
Kanban is a Japanese term meaning “signal.” The term is used
worldwide to denote a form of replenishment signal used to
transmit information regarding the movement or production
of products. A kanban system signals the authorization to move
material or product from the supplying location to the consuming
location. It can also signal the authorization to produce or
acquire additional product.
Under the kanban system pioneered by Toyota, parts are
delivered to a workstation along the assembly line only when
the workstation sends a request by signaling that a container is
empty. This request then flows back through the tiers. This
approach changes parts flow from a system in which suppliers
“push” parts to the plant to one in which manufacturers “pull”
parts in as needed.
Increased Process Security
Companies can gain several benefits when they implement an
RFID solution for production and logistics processes. For example,
they can reduce the time it takes to process orders, and they can
keep less stock on hand with improved visibility and material
ordering processes. The ability to seamlessly track reusable
assets, such as containers and returnable packaging, in the transport
and delivery processes ensures greater process security
while lowering operating costs, improving asset management,
and enhancing service performance.
By using SAP RFID technology, automotive companies can eliminate
material shortfalls of containers, which can lead to delivery
delays and, in the case of time-sensitive shipments, can cause
production downtime. Manufacturers, suppliers, dealers, and
freight forwarders can all benefit by reducing launch and assembly
delays resulting from errors in part quantities, types, and
locations for containers targeted for production lines.
SAP Auto-ID Infrastructure helps aggregate and map all relevant
stock movements. When containers are equipped with RFID
tags, employees can ascertain the specific location of each container
at any time. Moreover, they can access detailed stock
overviews for each container type. Linking the material and the
container enables automatic posting of goods receipt and issue,
resulting in the following potential benefits:
- Reduced container stock
- Less risk of production downtime due to missing containers
- Visibility into stock and movements of containers and parts
- Automated process control
- Process optimization throughout the entire supply chain
network
Streamlined Material Flow with Support for Kanban
Processes
If the status of a kanban container changes, for example, because
an employee enters data manually or with a bar code reader,
time may elapse between the actual withdrawal and its posting
in the system. As a result, warehouse stock information could be
incorrect or not available, requiring warehouse employees to
enter inventory data manually.
RFID technology eliminates these disadvantages, since status
messages are generated automatically when the container passes
by an RFID reader, which identifies the kanban number from the
RFID tag. Because the kanban number on the tag is linked with
other data through SAP Auto-ID Infrastructure, event or status
messages can be issued, depending on the specific process step.
Fully automated replenishment brings the following benefits:
- Prompt delivery of kanban containers
- Reduced shrinkage due to fraud or theft
- Reduction in direct and indirect labor costs since manual
identification is not necessary
- Faster reaction to production, warehouse, and goods receipt
problems
- Reduced stock in transfer
Data Integration with Supply Chain Management
Solutions
Inventory status information enables planners to deploy or
rebalance inventory across the distribution network to resolve
exceptions such as inventory shortages, overages, or delayed
shipments. With visibility into sudden variations in process that
extend to in-transit material, work in process, and scheduled
receipts, planners can determine a new operational plan for
assembly operations and warehouse locations.
Improved Data Quality
Bridging the gap between the technical world and real world,
SAP Auto-ID Infrastructure connects RFID readers on the shop
floor and in the warehouse with back-end systems. It translates
the collected unstructured data into useful information and
offers additional functions for managing and communicating
that information. More specifically, RFID technology supports
the following functions:
Goods issue and receipt, with automatic shipping and
receiving processing based on RFID and bar code reads
Automatic generation of advanced shipping notices with
associated product information
Handling unit picking and packing, with RFID picking,
packing, and task management
SAP Event Management can be used with RFID to monitor supply
chain processes and inventory, updating plans and schedules in
response to new circumstances flagged by SAP RFID technology.
Information is made available throughout the value chain for all
partners. When a plan is updated, affected parties are notified,
ensuring that all participants can adapt, thereby increasing efficiency
and accelerating operations. For the automotive industry,
the following benefits are relevant:
- Improved communication with trading partners on asset
status due to the ability to track and trace inventory at the
item and unit level
- Increased operational efficiency with alerts that flag
exceptions such as out-of-stock situations or incorrect
shipment quantities
- Enhanced decision making through analysis of key supply
chain and inventory metrics
To find out more about how RFID-enabled kanban and container
management can streamline your material flow, increase
process security, and improve the quality and integrity of data,
please visit www.sap.com/automotive or contact the SAP sales
office nearest you.