Reduce rubber inventory with new automated system.

It can be difficult to motivate any company to change its operating procedures, but when that change results in reduced inventory, more reliable, flexible supply scheduling and accurate invoicing - and it comes without cost or risk - the transition is well worth it.

This attitude is leading more and more companies to automate their rubber inventory management under the Tagged Inventory Management Expertise (T.I.M.E.) program.

"When we first heard about the T.I.M.E. program, we were skeptical. It was hard to believe that we could maintain our rubber inventory without continually placing orders," recalled one customer. "In practice, though, T.I.M.E. actually works better than estimated manual ordering. It compensates for our increases and decreases in usage, automatically adjusting to changes in our production needs. With T.I.M.E., we've reduced inventories from 25 to five days."

T.I.M.E. uses radio frequency identification (RFID) technology to track the location and status of rubber shipments. Rubber products are transported to customers in returnable metal shipping containers, each of which are uniformly tagged with an RFID device encoded with an individual serial number. The tags are scanned by special readers mounted in unloading stations at the customer site as the containers are emptied for use.

Under the T.I.M.E. program, customers automatically receive shipments of rubber on an as-needed instead of estimated basis. By continually tracking container status, Bayer is able to monitor customer inventories and automatically ship additional product whenever needed. The supplier also has the capability to invoice the customer for product as it is used.

"The customers themselves set maximum and minimum levels of inventory," explained Kathy-Ann Karder of Bayer. "T.I.M.E. relieves manufacturers from the continual burden of inventory monitoring, reordering and storage. It frees them from the inconvenience of overstocking and the dangers of running short. With T.I.M.E., they are guaranteed a constant supply of rubber on hand - without overloading their factory floor with inventory they can't use right away."

Twice a day, Bayer downloads usage data from the customer's unloading stations via modem. The information received is input into a specially-developed software program that monitors inventory levels by tracking the life cycle of each shipping container.

"At any given time, I can go into the software and `see' exactly what's on my customer's floor. I can determine what they've used, what they have and when they'll need more," said Vicki Tavanello, a Bayer customer service representative. "I remember when one new T.I.M.E. customer nervously called me saying they would soon need more rubber. While I was on the phone, the delivery truck pulled up at their factory with the rubber I had shipped out days before. To be able to provide that level of customer service is a great feeling."

The product of collaboration

T.I.M.E. is the result of innovation and hard work on the part of many companies and individuals. The concept was initially developed by Bayer employee, Greg Smith, in 1993.

"A customer was asking us to come up with a way to replenish his inventory without requiring him to enter an order. One day I was standing at the grocery store check-out, watching the bar code scanner. I had an epiphany, so to speak. I realized if we could read the bar code on our product at the customer site, we could meet our customer's needs."

A prototype for the system was built by Bayer's Jim McClymont in his own basement. Together, Smith and McClymont spent over a year evaluating bar code readers, eventually reaching the conclusion that the technology wasn't robust enough for their purposes. That's when they turned to radio frequency technology.

Radio Frequency Identification (RFID) technology itself is hardly new. It has been in use for more than a decade, largely in security access applications. (Personnel swipe ID badges in front of RFID readers to gain access to a building, for example.) RFID is a sister technology to bar coding, but it senses sound waves instead of light waves. Bayer chose RFID over bar coding for the T.I.M.E. application, mainly due to the harsh environmental conditions of customers' manufacturing plants.

"There are certain situations where bar codes just don't work. They can be fragile and susceptible to foreign substances. Carbon black, for instance, is one substance that's commonly found in the air in tire plants. Bar codes would easily get covered with carbon black, rendering them unscannable," explained Dave Vinson, operations manager for ASG, Inc. of Bloomington, Illinois, systems integrators on the T.I.M.E. project. "With a bar code, you need a clear, unobstructed light path in order to scan it properly. With an RFID tag, you don't need that light path. It uses radio frequency to scan or communicate its data. An RFID tag can be read through virtually any environment."

T.I.M.E. takes advantage of a specialized industrial product line of radio frequency devices, adapted by Motorola Corp. specifically for large shop floor manufacturing facilities. Motorola's RFID tag contains an integrated circuit with a coil wound around it. Both the circuit and the coil are housed in a plastic enclosure that is attached to the shipping container. The integrated circuit stores the data, or the serial number, of the container. The coil serves as the antennae for the tag.

"The tag acts like an electronic license plate that identifies the shipping container," said Vinson.

When rubber is unloaded at a customer site, a fork-truck carrying a container drives inside the unloading station - a large, eight-foot steel mesh enclosure. Two RFID readers are mounted on opposite ends of the station - so the tag can be read regardless of which direction the container enters. When the tag comes in close enough proximity to the reader, the device sends a 125 KHz signal to the tag. The signal energizes the tag on contact, prompting the integrated circuit to transmit its encoded data (the container's serial number) back to the reader.

To empty the shipping container, the tines on the fork-truck are raised, catching on "dog ears" on the top of the unloading station. The top of the container remains suspended in the station, while the raw rubber is pulled from the bottom. The rubber leaves the station to be processed. The empty container is broken down, flattened, stacked and returned for cleaning and re-use.

Polling the data

The information obtained by the reader passes through a serial cable connection into an intelligent programmable logic controller (PLC) device where it's stored. Twice a day, Bayer polls the PLC via modem, downloading all inventory transactions that have transpired within the last few hours.

"Initially, we planned to develop the T.I.M.E. software for Windows, but we decided to base it on a 3270 mainframe instead, because that machine is more prevalent in plants and warehouses," recalled Sitar Kannapadi, senior systems analyst for Bayer's Information Systems Group. "Converting it to Windows now would be a fairly simple process."

Kannapadi describes the software effort as a careful collaboration. "We worked closely with the customer service representatives and plant personnel - and most importantly with our customers - when we developed the software. We wanted to be sure to take into account the way people really work."

More than just lower inventories

While the primary motivation for T.I.M.E. was offering customers a level of service they couldn't get anywhere else, Bayer has seen other benefits from its use.

"We're doing things now with production planning that we just couldn't do before," said Jolene Travis, site project leader at Bayer Rubber's Orange, Texas site. She explained that Bayer uses T.I.M.E. to better accommodate changes in its production packaging schedule and to predict when shipping containers need to be ordered. T.I.M.E. also streamlines maintenance by classifying damaged containers as being out-of-service.

"At any given moment, our production manager can see how many containers are on-hand, how many are out-of-service, how many are on our customers' floors and how many are en route to us. We can even view product that's inventory at a consignment customer warehouse," claimed Travis.

Bayer also uses T.I.M.E. to enhance its quality control. The system's precision tracking capability allows Bayer to accurately match materials with operating conditions. The quality of finished products can be traced to exact manufacturing components and conditions.

Although T.I.M.E. is the first system of its kind to be used in the rubber industry, the technology has been proven in many other fields. "It's used extensively in department store warehousing," explained Travis, "but there you have a very controlled, air-conditioned environment. We had to take into account the special needs of our customer sites - automated robot stackers, electronic conveyors, power arms, etc."

Making the transition

"At first, companies are hesitant about installing something new on their floor, but as they see what the system can do - what it is doing for some of our customers - they are anxious to take advantage of it," said Travis. "I know our T.I.M.E. customers have seen tremendous drops in inventory as a result of the system. They're moving toward a just-in-time inventory, as much as is possible in the rubber industry, with its dynamic lead times."

Pete Gilliland, distribution supervisor at Bayer's Sarnia site, claims that learning to use the T.I.M.E. system is easy. "People on the factory floor are very receptive to the idea of the new technology. After all, nearly everybody has a remote control on their TV or even a PC at home. Ten years ago that acceptance may not have come as easily, but today it's not a problem."

Skeptical customers may fear disruption of their current operating procedures, but Karder maintains that is not the case with T.I.M.E.. "This is a passive system. It has very minimal impact on our customers' operations, other than to relieve them of the burden of inventory tracking and ordering," she said. "Bayer supplies the hardware and software required for each customer site. We take complete responsibility for installation, operation and monitoring. All the customer needs to do is provide a phone line and power outlet. That's it."

RELATED ARTICLE: How T.I.M.E. works

Step 1: Returnable metal shipping containers are tagged with a radio frequency device encoded by serial numbers.

Step 2: Tagged containers are filled with rubber.

Step 3: Containers are shipped to the customer where hand-held or stationary readers scan their tags and record them as inventory.

Step 4: As the customer uses the product, containers pass through special unloading stations. Their "empty" status is transmitted via modem.

Step 5: Customer is invoiced for product as it is used.

Step 6: Customer inventories are continuously monitored and additional product shipped as needed (based on customer-specified maximum/minimum levels).

Step 7: Empty containers are shipped back where they are cleaned and prepared.

Step 8: Tags are re-coded for the next cycle of service.

by Patricia VanGilder, Bayer Corporation

Patricia VanGilder is Director of Supply Chain Management for Bayer's Rubber Group in Akron, OH. She has been with Bayer since 1975 and was Manager of Central Planning prior to her present position.