Produce Suppliers and Wal-Mart Test Reusable RFID Tags

MICHAEL GARRY

SALINAS, Calif. — Produce supplier Tanimura & Antle here and Wal-Mart Stores, among others, are in the midst of a field test of RFID tags on reusable plastic containers to determine whether the tags can be used repeatedly in shipments to retailers.

As part of the test, Tanimura & Antle, a grower and shipper of lettuce, cauliflower, broccoli, celery and other produce, is shipping about 500 RFID-tagged reusable containers of cauliflower per week to a distribution center operated by Bentonville, Ark.-based Wal-Mart, said Tom Casas, vice president of IT for Tanimura & Antle. (Wal-Mart declined to comment.)

The RFID tags allow Tanimura & Antle and Wal-Mart to track the movement of containers at each step in the supply chain. The goal of the current test is to evaluate the ability of the RFID tag to be used repeatedly along with the container, eliminating the need to attach a new tag each time the container is reused.

“More than anything this will help with the ROI [of the RFID tags],” said Casas. Even at 15 cents for a fully converted tag, the cost would be considerable for Tanimura & Antle if tags were used with large volumes of produce shipments. “But if we reuse the tags multiple times, then instead of 15 cents, it might cost a penny per shipment,” he said. “That saves a lot of money in our world.”

Reusable RFID tags would mean significantly reduced supply chain costs for retailers and container suppliers as well as product suppliers, said Jeanie Johnson, executive director of the Reusable Pallet & Container Coalition (RPCC), Washington. Such tags would also result in “lower labor costs to implement a traceability system and a more reliable system,” she added.

Produce traceability has gained a higher profile since the spinach E. coli outbreak in fall 2006. The Produce Traceability Initiative, a new industry program aimed at driving broad adoption of traceability standards and practices, held its first meeting in Atlanta last week.

The field test, launched last September, is being coordinated and funded by the RPCC. In total, RFID tags on thousands of reusable containers are being tested. The test is slated to be completed by late spring.

Three types of tags are being evaluated, all of them meeting EPC (Electronic Product Code) Generation 2 standards. The three tag types all performed “in a superior manner” in two lab tests, “weathering dramatic simulated conditions with a 100% read rate,” said Johnson.

The field test aims to determine whether each RFID tag can survive the “material handling abuses” of the retail supply chain, noted Johnson. The tags must survive “harvesting conditions in excess of 100 degrees, icy cold water used in cooling, refrigeration, and finally a sanitation process that requires water temperatures over 170 degrees,” she said.

Ultimately, RPCC would like the RFID tags to last as long as reusable containers, which can be used for up to seven years. But for the purposes of this test, “we assume at least three cycles through the supply chain would provide significant savings,” Johnson said.

In addition to Tanimura & Antle, the test's produce supplier participants include fruit supplier Stemilt, Wenatchee, Wash., and Frontera Produce, Edinburg, Texas. Other participants include The Kennedy Group, Avery Dennison, Alien, UPM Raflatac, Impinj, IFCO Systems, Georgia Pacific and ORBIS Corp.

BETTER VISIBILITY

Separate from the RPCC-sponsored test, Tanimura & Antle has been one of the hundreds of suppliers to participate in Wal-Mart's rollout of RFID technology since 2004. However, in that program, Tanimura & Antle has been employing its own single-use RFID tags on shipping containers holding lettuce.

The earlier RFID initiative has demonstrated that RFID tags offer “better visibility” of shipments than do bar codes, said Casas. “You have many more read points with RFID. We can see where products went and how long they are in the supply chain.”

In the RPCC test, Tanimura & Antle is able to “rewrite” new information on a tag as it returns with the reusable container. “This is a much more cost-efficient and ‘green’ alternative,” said Casas.

Casas said that Tanimura & Antle could expand the volume of RFID-enabled shipments to Wal-Mart if the field test proves the reusability of the tags. The supplier's RFID shipments currently account for only 1% of its volume. But Casas would like to see container suppliers take over the investment in RFID tags and their application to cases — something Johnson expects would happen.