Watching the Wheels (and Other Parts) Put into Motion: What’s Behind the Rise in Real-Time Location Systems

Auto manufacturers are among the many supply chain leaders who want to diligently track and trace parts, finished goods and even packaging as fulfillment – and financial – burdens increase.

A factory worker uses a handheld RFID reader to inspect a passing vehicle
by Matt Seltz
June 22, 2021

No one can afford to lose track of valuable assets. That’s why we’ve seen radio frequency identification (RFID) and Bluetooth®-enabled tracking devices become extremely popular in both the consumer and commercial sectors these last few years. Tagging everything from phones and wallets to pallets and vehicles can help owners quickly recover missing items, whether misplaced or stolen. But tracking an item’s movements is far more than just a security tactic. It’s a strategic imperative, especially in automotive manufacturing environments.

Using a real-time indoor location system such as Zebra MotionWorks® to track and trace physical assets is one of the best – if not only – ways to see with near-perfect accuracy where equipment or inventory is located, how it got there, and where it may be better stored or utilized. It’s the key to unlocking greater workflow efficiency and improving overall operational performance when order volume is high and output capacity is constrained. This type of technology, if applied properly, is also indispensable in anticipating the implications of certain decisions and actions so corrections can be made in real time as needed.

For example, automakers who are trying to compensate for lost time and revenue stemming from pandemic production shutdowns and current chip shortages are exploring high-impact ways to allay further losses.

In a perfect world, they would be able to ramp production to meet demand for more upgraded and personalized vehicles. Current inventory levels and production lags are forcing consumers to either settle with what’s on the lot or wait to see what comes available in a few months. Neither scenario is ideal for the automotive industry as upgrades and customization drive greater margins. Plus, people eager to buy now might not still be in the market for a new vehicle in a few months. They may opt for a resale or decide they don’t need to spend money on such a purchase after all. Yet, there are a lot of factors influencing production capacity right now, including labor and chip shortages – which aren’t within automakers’ control.

What they can control, however, is production speed and quality along with operational efficiency – all of which impact margins. For example, we’re seeing many manufacturers turn their attention back to the circular economy model and embrace technologies that make it easy to track – and salvage – reusable containers. Some are also leveraging real-time location systems (RTLS) as a foundational element for smart factories. The COVID-19 pandemic uncovered vulnerabilities in traditional just-in-time production and delivery methods, driving manufacturers to rethink the ways in which they can mitigate the impact parts shortages may have on output and their bottom lines.

“Find Me If You Can”

It’s a tale as old as time: an automotive parts supplier packs up a container, ships it off to the manufacturing plant, and then hopes it will be returned once unpacked so it can be reused again. In many cases, it’s not – at least not automatically. So, the supplier calls the manufacturer to track it down. But the manufacturer has a wall – or warehouse – of empty containers and no way to easily discern which ones belong to which suppliers because containers are tracked using only paper forms and manually-scanned barcodes.

What happens next is a toss-up. Containers could be misdirected to other suppliers, held for a prolonged period by the manufacturer, or reused by the manufacturer (or another supplier). This leaves the original supplier/container owner with two choices:

  1. Wait for the manufacturer to find and return its reusable transport packaging (RTP).
  2. Order more plastic containers, wire cages, or specialized trays (depending on what type of parts they sell) so it can get future shipments out without delay.

Both of these options waste money, labor resources and time. So does the manual management of any asset, including something as seemingly mundane as shipping containers.

To be fair, the use of reusable containers in and of itself drives complexity into the supply chain as it involves forward distribution and reverse logistics. However, most – if not all – of that complexity can be eliminated by using RFID tags, readers and cloud-based monitoring tools to automatically track and locate the containers as they move between the different manufacturing and assembly sites. The same visibility instrumentation could even be used to track each container’s contents if desired. Talk about doubling your return on investment (ROI)!

Once the supplier can see where a container is located, it becomes so quick and easy to:

  • mitigate loss and theft. If RTP goes missing, RFID records can help trace it to the current or last known location. In turn, you can avoid shipment delays due to container shortages and having to recruit a whole team to find and/or allocate assets. This could essentially become a one-person job.
  • confirm its viability. RTP is designed to be used for multiple trips and long-term storage and, thus, typically designed to last as long as the associated model is being produced. However, the reusable handheld and bulk containers, racks, pallets, and lids commonly used in automotive manufacturing are prone to wear and tear – especially if they’re fully utilized. As is the reusable dunnage or internal packaging designed to facilitate part protection. Being able to quickly find and inspect RTP can improve suppliers’ replacement sourcing workflow.
  • improve asset utilization and reduce dwell time. The visibility into asset movements and holds can help manufacturers and suppliers accelerate container turns and ensure proper routing to the next destination.
  • de-friction supplier relationships. No one wants to point fingers at a partner or customer when assets go missing, and frequent losses can deteriorate a relationship. The accountability provided by RFID and other indoor location technologies helps to build trust and confidence that assets aren’t being mishandled.

You Don’t Know What You’re Missing Until You Can See Everything

Containers and components aren’t the only things susceptible to loss in a fast-paced factory environment. Finished products can be misplaced too, including industrial trucks. I know…you’re probably wondering how that’s possible. But it’s important to remember that automotive production facilities are gigantic, and several things can interfere in the vehicle transport process – even within the four walls. Automakers need to be able to confirm that a truck made it from Point A to Point Z on time and without issue, before a distributor or customer calls to inquire about a delay. They also need to be able to see workflow hazards that could result in damage to the newly-minted truck. For example, is the truck being driven across a high-traffic area and unnecessarily exposed to things that could ding it along the way? Or is it being improperly staged by the loading dock, leading to bottlenecks in the entire loading process?

Similarly, the movement of material handling vehicles – or lack thereof – can either make or break a manufacturers’ ability to meet production and shipping deadlines. If a forklift is routed the long (or wrong) way across a facility, subsequent processes that rely on that material will be impacted. Or if there is something that repeatedly causes an obstruction in the traffic flow, an entire workflow can become stagnant. But it’s not easy to recognize, much less assess, those patterns without the type of visualization provided by indoor location technologies. There’s something about seeing a cluster of red dots (i.e., tagged assets) sitting in a holding pattern on a computer screen that makes it easier to identify issues and pinpoint why they are happening. Perhaps it’s the ability to track and trace each asset individually, see all the moving parts from an “overhead” view, or replay the scenario from different angles. Regardless, the ability to sense, analyze and act when issues arise has become invaluable to auto manufacturers that value every asset, not just those sold on the open market. It’s also the key to sustaining a just-in-time production model, even when external pressures challenge one’s ability to keep pace with demand,

The Takeaway

There are several benefits to be gained from RTLS, particularly indoor location technologies. The most remarkable, at least in today’s climate, are loss avoidance and optimized asset utilization. The chip shortage alone is expected to cost the automotive industry $110 billion in 2021. If there was ever a time for manufacturers and suppliers to reduce, reuse, recycle, this is it.

I encourage you to call a Zebra representative or partner to learn more about how much you can gain from the real-time visibility and business intelligence delivered via technologies such as RFID, Ultra Wideband RTLS, and Bluetooth Low Energy beacons

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Did You Know?

Zebra Technologies has been recognized as a Leader in the February 2021 Gartner Magic Quadrant for Indoor Location Services, Global, for the second consecutive year*. Download a complimentary copy of the report now to learn more. 

*Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

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Matt Seltz
Matt Seltz is currently the Senior Director of Zebra's Location Solution Business and leads all operational aspects of the product business unit. Matt has more than 20 years of experience within the industry and has previously lead sales and professional services for the location business.
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