What You May Not Know About Real-Time Location Systems and RFID Applications in the Automotive Industry
Keep these things in mind when choosing technology to track and trace automotive parts, assembled vehicles, totes, tools and more throughout their lifecycle.
Automotive manufacturers are inventive. They have to be. Consumers expect to see new models with the latest and greatest features on dealership lots each year. Likewise, automotive parts suppliers, dealers and service providers are under more pressure than ever to meet exceptionally high-quality standards, increasingly higher customization expectations, and unprecedented service levels under extremely tight deadlines, which means they must constantly reassess – and refine – execution systems and processes. But continuous innovation is hard. There is so much that must go on behind the scenes to produce, transport and service vehicles in this extremely complex environment – to deliver that perfect, personalized customer experience.
Yet, when it comes to implementing new operational technology (OT) and information technology (IT) systems, I know the auto industry has been a bit more conservative despite the complexity of processes required to meet customer demands. Any change can have end-to-end effects, and it may require involvement from partners both upstream and downstream – at least to be fully effective. But it’s time for the entire automotive ecosystem to look at what can be done to improve track and trace capabilities of parts, vehicles, reusable totes and even tools.
Though barcode technology delivers multiple benefits to automotive original equipment manufacturers (OEMs), dealers, parts retailers, service providers and even drivers, it doesn’t always provide the level of real-time visibility into manufacturing progress, inventory availability, or maintenance status that stakeholders want and need. In Zebra’s latest Automotive Ecosystem Vision Study, 80% of consumers and fleet managers said they want end-to-end visibility into what’s happening during the manufacturing process. They also want more convenient vehicle service experiences. At the same time, three-quarters of automotive industry decision-makers say they urgently need to gain more end-to-end supply chain visibility. Well, the reality is that such desires will only be met if real-time data about parts or vehicles is being collected and the various systems collecting, analyzing and actioning the data are connected.
Plus, if you (as an OEM, retailer, transporter or dealer) don’t know the current location of every part, tool, and piece of reusable transport packaging, it’s hard to keep production and order fulfillment operations on schedule. And if you lose sight of completed vehicles, on-time delivery issues become the least of your worries. That’s why vehicle tracking technology isn’t just a last-mile investment anymore. Nor is it something that can be exclusively managed using barcode technology. The monitoring and reporting of assets and actions must be automated – and it must occur in real time – given the increasing volume and diversity of automotive manufacturing, shipping, sales, and maintenance operations.
Now, you might be saying, “My barcode-based track and trace systems can do this.” And you wouldn’t be wrong. However, RFID and real-time location systems (RTLS) are quickly becoming the gold standard as the automotive ecosystem becomes more digitized and calls for greater transparency by consumers, dealers, fleet managers and even supply chain partners increase.
With a barcode, you can only confirm where a part or finished vehicle was located at the time of scan – assuming you know where the scanner was located at the time of the scan. But with real-time location technology, you can confirm goods receipt in real time and leverage a more dynamic put away model in parts logistics. Or, at the dealership level, you can use RFID to expedite maintenance and repair actions by expediting data collection and records updates via tag reads on tires, parts and even entire vehicles.
In fact, one of our customers cut the total time each car is in the dealership for maintenance by half after they started using an RTLS system to locate customer cars in the lot and identify any needed actions based on service bulletins and maintenance history. They don’t have to spend minutes hunting for the vehicle or digging through different systems and records to understand the vehicle’s history. The maintenance process is also fully transparent for the customer, as they can see when the car has been pulled back, which action is being taken right now, and when they should return to the dealership for pickup – all from a mobile app being fed real-time updates from the RTLS. So, leveraging RTLS simultaneously has improved the customer experience – and customer satisfaction levels – and made the entire maintenance process more efficient, enabling the dealership to service more vehicles each day.
This is an especially timely improvement considering that it took U.S. auto repair shops an extra 2.1 days to fix cars in 2021 compared with 2019. With vehicles becoming more complex machines and supply chain issues continuing to challenge parts availability, it’s so important to simplify operations and maintain full visibility into – and control over – on-hand inventory. You can’t afford for anything to go missing or take a minute longer than necessary to fix.
Of course, there are many other ways RFID and RTLS can be leveraged in the automotive industry besides inventory and maintenance process management. So, let me answer some of the questions I have been asked recently by colleagues and industry leaders about the real (and growing) value of RFID, RTLS and other track and trace technologies across the entire automotive ecosystem:
1. Though RFID technology and RTLS are most often associated with track and trace applications today, the barcode was really the basis for track and trace back in the day, right?
That's correct. Barcodes were the media of choice a few decades ago. But only a few people saw the full value of RFID back then. Of course, today, with new technologies emerging and others maturing, RTLS and RFID are considered state of the art. But even still, their general purpose remains to be track and trace – so organizations and consumers can follow products and other assets throughout the entire life cycle. The reasons for track and trace vary. Sometimes the goal is production or stock management, while other times it could be for the management of product recalls, the reduction of their carbon footprint or even waste management. But what we are seeing is a rapid expansion in use cases for RFID and RTLS technology across different industries and workflows to complement or supplement current barcode track and trace systems.
2. Wasn’t the automotive industry a fairly early adopter of RFID and RTLS as well?
While track and trace technology has been widely used in the automotive ecosystem for quite some time, and auto manufacturers were among the first to require suppliers to add RFID tags to parts, I would not say RFID and RTLS have become the “standard” track and trace method yet across the board. Some industry stakeholders are still trying to understand how the technology can best be used within their operations and in response to their customers’ needs. For example, tire manufacturers may add RFID tags to tires during production, but dealerships aren’t always taking advantage of the tags’ presence and leveraging the tags in their operational processes. Sometimes – and I would say too often – separate solutions are used, and that creates a layer of unnecessary complexity for everyone upstream and downstream.
That said, I think from an OEM perspective, the adoption is quite good already. With the move to electronic vehicles (EVs) and ongoing digitization and creation of smart factories, RTLS of every kind continue to grow.
3. Many people consider inventory management to be the primary value proposition for RTLS. However, I'm hearing more people contend that this technology is also becoming table stakes for quality control, supplier accountability, and even customer service. Would you agree?
Well, I think inventory management is a broad term. It can be seen for managing inventory of raw materials and spare parts, but also cars waiting on a big yard to get delivered. I do see RTLS typically used more where a customer has single item identification requirements, at least when talking about bigger projects. In automotive, though, the use cases are obvious starting from parts inventory management to just in time component deliveries to the production line and then the management of complete vehicle inventories. But these are just three out of many, many other use cases we’re seeing in the automotive ecosystem as well as in other industries.
In other processes, like in the chemical industry, RTLS is a big topic for tracking very expensive containers in a factory or in transit. They’ll put GPS trackers on chips to make sure that both the goods and the containers they’re being transported in can be tracked in motion. They want to know when the full containers make it to the customer and when the empty (and still expensive) ones are on their way back to the factory.
Beyond inventory management, though, there are many places RFID and RTLS could be implemented to drive operational improvements.
Let’s start at the point of production, especially facilities with flexible manufacturing lines which send cars to manufacturing cells for specific parts mounting. This is a completely different way of building cars than the traditional fixed production lines. So, manufacturers absolutely need to know not just where the car is but also where every asset is located, down to the screws and screwdrivers. It’s the only way to ensure everything is at the right place at the right time. And, of course, RTLS is key to enabling this type of manufacturing model.
Of course, we know from talking with tier one and tier two suppliers when OEMs are imposing RFID tagging requirements on them. In the past, this requirement was mainly intended to help the OEMs start tracking goods upon arrival at their facilities. The purpose and value of RFID tagging has now changed, though. First of all, OEMs want to better know where goods are in the manufacturing process of their tier one suppliers – they want visibility into inbound inventory before it arrives. Additionally, we see tier one suppliers starting to use the RFID-captured data more for their own process optimizations, which includes quality control and of course helps improve their ability to meet customer expectations.
4. Is RFID or another type of RTLS better for automotive use cases?
At the moment, there is technology that is recommended for determining highly accurate locations in very narrow areas as well as technology targeted more for big yards. But it’s impossible to make a specific recommendation on which technology is best for a particular use case without doing a full assessment of the site and objectives. That said, it is possible that you will need to use different types of location and tracking solutions across your end-to-end operations given the targeted application of each type of RFID and RTLS technology.
5. Do you feel that RFID and RTLS use cases in other sectors – such as healthcare or even sports – have relevance to the automotive industry? Are there applications that could serve as models for vehicle manufacturing, transportation, retail or servicing operations?
I think what Zebra is doing with the NFL is a great example of best practices when it comes to location technology implementation. We are tracking all the players on the field, along with the balls, and feeding that data to the NFL for Next Gen Stats. So, this is not an inventory management example, but I think it shows that there are scenarios where you can use the technology for “outside-the-box” applications if you design and size it right and you do the right pilots in the beginning.
6. Some auto industry leaders seem hesitant to fully embrace RTLS. Why do you think that is?
I was talking to a customer in Germany that said one of the reasons they are moving away from some RTLS and Wi-Fi standards is that they are moving toward 5G and, with 5G, different types of RTLS can be considered. Plus, 5G can save some organizations in the auto industry a lot of money by reducing the amount of access points for the different technologies they are trying to deploy, including RTLS, machine vision, robotics automation and more. This particular customer told me, “If I have to wire one meter of network cable, it's more than one thousand dollars per meter. But, with 5G, I have a lot less infrastructure and it still gives me the same result most of the time.”
So, I don’t think that there’s a hesitancy to embrace RTLS overall. In fact, 35% of OEMs who participated in Zebra’s Automotive Vision Study believe RFID is one of the technologies that will help improve supply chain management. And nearly one-third of all surveyed decision-makers say they will prioritize connecting real-time data systems to enable a holistic view of operations and increase visibility across production and throughout the supply chain over the next five years. So, I think it’s more about figuring out which RTLS is best based on multiple factors, to include the connectivity (and accompanying infrastructure) requirements.
The good news is that, when attending events where auto leaders are discussing their challenges in factories, I hear a lot of them talking about how they’re starting to implement 5G technology. So, while there wasn’t a gold standard for RTLS before, I think with 5G there will be several technologies combined to change the game throughout the automotive ecosystem. You now have ultra-low latency networks that you can use for PLC-controlled environments, like on manufacturing lines. You have ultra-high bandwidth, which can be used for machine vision and video-based applications. And you have guaranteed response times, which is also very important when you work with PLC-controlled environment, as you can have a lot more clients per access point, to include those needed for RTLS.
Plus, we’re seeing more service providers offer standalone/private 5G networks, which is very valuable in the automotive industry because of the security and reliability they offer. We know consistent network connectivity is key to extracting value from RTLS.
7. Is there one thing you wish automotive industry leaders understood RTLS, RFID, or other types of location technology solutions? Something that impacts the return on investment, perhaps?
The initial design and implementation efforts are not to be underestimated, even though they are a lot simpler than they were in the past. You need to make sure that you scope and design the project based on hard and clearly defined requirements. This may seem like the obvious first step. However, we have been asked to support many projects in which the customer has an initial idea about how they want to use location technology, but then the scope starts to change slowly for whatever reasons and the project gets messy and very expensive. It also makes it more difficult to get stakeholders to buy in when the system design and implementation approach aren’t well defined. So, it is important that when you start the design phase, you really make sure that the technology you’re planning to use is going to work within your environment and for your specific use case.
Just as important, make sure the pilot is done in a controlled manner and, preferably, in a specific plant. Once you confirm the technology fits the targeted process or addresses the issue that has been challenging operations, then it becomes easier to scale across all other plants. Then again, if you realize that the technology isn’t working as you want or might be difficult to scale, then you only have to adjust your system or strategy in one place. It’s less risky. We’ve seen how a lot of nice projects can kind of go down fast because they were not well-thought through in terms of scaling into other areas of the business or even into other plants, even when it was essentially the same process that was being replicated. So, it’s important to work with a trusted team of solution/sales engineers and technology integrators who can guide you through the discovery, design, deployment, refinement and scaling processes.
Secrets to a Smooth System Migration: A Step-by-Step Guide for All Technology Owners, Operators and Overseers
Did You Know?
Zebra was recognized as a leader in the Gartner Magic Quadrant for indoor location services for the third consecutive year, and we've worked with auto manufacturers such as Ford and Toyota’s Material Handling division on RTLS system implementations. Check this out:
- Toyota Material Handling Uses Zebra MotionWorks Enterprise to Track and Streamline Product Movements in Real Time
- Company-Wide Real-Time Location System Drives Efficiency at Ford Motor Company
- 2022 Gartner Magic Quadrant for Indoor Location Services
You May Also Be Interested in These Resources:
- Watching the Wheels (and Other Parts) Put into Motion: What’s Behind the Rise in Real-Time Location Systems
- Don’t Lose Sight of Your Valuables: New Insights into the Track and Trace Technologies You Should Be Following
- The Fourth Industrial Revolution is All About Mass Personalisation...and RFID Labels
- Industrial Automation Insider: The Biggest Thing Changing About Automation is Its Relevance
- As More Industries Race to Adopt RFID, There are a Few Things You Should Do to Keep Your Organization at the Forefront
- Cisco Leader Agrees: The Pandemic Subtly Accelerated and Dramatically Altered Enterprise Adoption of 5G
- Your Employees Want to Feel Safer at Work. You Want to Reduce the Risk of Incidents. There are Several Ways Location Technology Can Help with Both, According to One Expert.
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