Patties cooks up a dynamic supply chain environment

Australian-owned Patties Foods has implemented a small-scale version of Wal-Mart's ambitious RFID plans as a precursor to a full supply chain rollout in the next couple of years.

The company began small recognizing the technology is yet to evolve locally and is waiting for tagging chips to come down in price.

However, in preparation Patties has adopted the EAN Uniform Commercial Code (UCC) barcode system which uses XML schemas to uniquely identify products, shipping units, assets, locations and services as well as providing real-time tracking and traceability which is particularly useful when ordering raw materials from suppliers.

The system also uses a set of messages for electronic data interchange (EDI) to ensure suppliers and manufacturers deal with one specific set of information throughout the supply environment.

Joe Rettino, Patties purchasing and logistics general manager, said inventory visibility for both raw materials and finished goods is the greatest advance in using the system so far.

"But the best benefit has been the fact that we have had an opportunity to explore and review our own supply chain. Some of our suppliers are ready for the RFID technology, others are a bit reluctant, but we have brought them along and they now see similar benefits in their own supply chain environment," Rettino said.

"We hope to become the first FMCG (fast-moving consumer goods) oprator in Australia to be included in pilot testing and the use of RFID."

Patties, which makes brand named Nannas and Herbert Adams baked goods as well as Patties and Four 'n' Twenty pies, pushes out around 30,000 pies each hour with a total turnaround of half a day.

In the packaging industry, recycling carton re-manufacturer Visy has already undergone a complete RFID rollout in its fleet and supply chain, and estimates cost savings relating to stock control and inventory management to be well into the hundreds of thousands of dollars.

Thomas Howard, senior advisor for EAN, worked directly with Patties foods in 2003 in deploying the system now operational at Patties and said that the initial approach was to deliver a complete supply-chain review service, access the current situation in the business environment, analyze processes and help the company move into implementation.

Howard said they initially had requirements to implement electronic messaging across the supply chain, deliver a Serial Shipping Container Code (SSCC) between parties and trading partners and ultimately deliver a solution that could combat the significant amount of paper-based transactions when dealing with suppliers.

"Essentially what Patties Foods has done is the same as Wal-Mart, but smaller and has shown that anyone can play in this field and get huge benefits," Howard said.

"It has not only eliminated paper-based transactions but manual data entry for receiving goods and storing them has also been streamlined." Howard said that it is not possible to recommend or in fact install a complete RFID system until standards for reader compliance are introduced, adding that ratification is expected in January.

However, the data collected along supply chain events will be what revolutionizes a manufacturing firm and this is something that can be done immediately.

"RFID is being used to populate information in systems. Previously suppliers had to rely on AC Nielsen data for sales statistics which was out of date. It is okay for planning, but retrospective isn't real-time; capturing the information means it is too late to have inventory available and creates forced demand," Howard said.

"Now we can create a really dynamic supply chain."

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