Amid financial and social unrest, decision-makers at midsize European companies explain why they are expanding their enterprise RFID deployments.
By John Edwards
Oct. 1, 2011—
Europe is experiencing its greatest financial and social crisis since the end of World War II. The economies of Greece, Ireland, Portugal and several other European Union (EU) member nations teeter on the brink, while governments in France, Germany and other financially healthier countries pull their belts ever tighter by raising taxes and trimming services. Against this dreary backdrop, decision-makers at midsize European businesses ponder their radio frequency identification options. They understand that RFID has the proven ability to slash costs and boost revenue by streamlining operations across the supply chain and beyond. Yet sluggish markets, shrinking budgets, soaring taxes and fear of additional social and financial upheaval make planning far more difficult and riskier than in years past. Compared with their mega-enterprise counterparts, business leaders at midsize companies have precious little maneuvering room. Smaller operating budgets make it harder to fund new projects, and tighter lending requirements make it difficult for many businesses—even financially sound ones—to borrow money, despite record-low interest rates. As if these troubles weren’t enough, RFID decision-makers must also face the fact that government support is rapidly evaporating. The days when the European Commission (EC) and various national and local government organizations would lavish money on just about any RFID project that showed even a scintilla of commercial or social promise are over. Today, with fewer research grants available, new RFID projects must show significant potential for long-term success from the very beginning. Even then, funding—public or private—can be hard to find.
Considering all these challenges, you might think RFID’s future in Europe is about as bleak as a finance minister’s budget forecast. But that’s not true. It’s a sign of RFID’s growing maturity and commercial value that new deployments continue arriving at a steady pace, with nimble midsize European businesses pioneering RFID innovations their larger counterparts are either too timid or too bureaucratic to create. RFID Journal recently asked leaders of midrange European companies in five key fields—food production, logistics, retail, manufacturing and apparel—to reflect on their current relationships with the technology and the lessons they’ve learned, as well as to predict where things are headed. Their answers, as you’ll see, are informative, illustrative for RFID leaders worldwide and, at times, controversial.
Focus: Food Production
Bahar Ozrun, CEO of Bereket Döner, in Istanbul, Turkey, is a pioneer in several ways: as a business leader in a country where powerful women are still a rarity, a food industry production expert and an RFID innovator. Bereket Döner, which produces frozen and ready-to-cook gyros, relies on RFID for both order processing and inventory management. The company now tags all its finished products. The items are read and identified with multiple scans throughout the packaging and pallet assembly processes. Inventory-management software, integrated with the firm’s product database, feeds critical processing and inventory data into the company’s enterprise resource planning system. “What’s most exciting about our RFID system is that it’s the first use of the technology in a moist and frozen environment with 100 percent accuracy,” Ozrun says.
Bereket Döner began investigating RFID a couple of years ago, creating a team tasked with finding a way to use the technology to expedite order processing and assembly. “We started reaching out to a number of RFID vendors in early 2010 to explore if they could assist us with our operational challenges,” Ozrun says. But the team quickly learned that conventional RFID solutions weren’t suitable for use within the company’s production environment. “The handicap was that RFID had never been applied directly on frozen raw meat in wet environments or subzero conditions,” Ozrun says. “As a major manufacturer of gyro packages, this was a major barrier for us.” The team eventually connected with RFID Enabled Solutions (RES), a Dublin, Ohio-based company willing to take on the challenging project.RES’ pioneering system works by using a combination of RFID and bar code technologies. Tags are placed onto the raw meat before it’s wrapped and frozen. The meat is next sent to a commissioning station, where it’s weighed and packaged. Each tag is then read and linked to a bar code before the package is sent into a storage freezer. Both the RFID tag and bar code contain the product’s stock-keeping unit, production date and weight data. Later, at the order-processing stage, an employee assembles a purchase-order pallet, which is wheeled into a scanning tunnel, where its contents and weight are verified against the purchase order. With the initial deployment now in place, Bereket Döner plans to extend RFID support to its cooked and sliced gyro facility, where the system will be used to track production. “As a third phase, we are planning to develop a scheme to control the raw meat and poultry stocks with a final goal of adding RFID tracking to all… manufacturing processes,” Ozrun says. Like many of her counterparts, Ozrun believes Europe leads the world in RFID adoption and innovation. “We feel that the investment in the technology in Europe is more accepted because of the competitive demands apparent in the EU, coupled with the need to reduce costs and improve efficiencies,” she says. “The technology has been heavily marketed, bringing practical solutions in a cost-effective way.” Since Turkey isn’t an EU member, Bereket Döner wasn’t able to take advantage of EC research support, instead learning lessons from fellow RFID adopters. “We did not look to the EC for guidance with this project; we were more focused on our business challenges,” Ozrun says. “We looked to the local business community involved with RFID to assist us with our challenges.”
Even as Bereket Döner moves to extend its RFID deployment into new areas, Ozrun feels the company has yet to unlock RFID’s full potential. She’s looking forward to working with partners on future RFID initiatives, “extending the technology to the supply chain side of business and improving overall quality assurance,” she says.