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Pallet Rental Company Modernizes Shipping Industry with ...


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Pallet Rental Company Modernizes Shipping Industry with ...

  1. 1. Microsoft BizTalk Server Customer Solution Case Study Pallet Rental Company Modernizes Shipping Industry with Plastic and RFID Tracking Overview “RFID gives us a data-driven audit trail so we can Country or Region: United States Industry: Transportation and Logistics— track our assets and satisfy our customers. The time- Materials handling stamped data alone is far better than anything that Customer Profile has existed until now.” Headquartered in Orlando, Florida, Walter Kerr, Chief Information Officer, iGPS Intelligent Global Pooling Systems (iGPS) is the first company to provide manufacturers Intelligent Global Pooling Systems (iGPS), based in Orlando, Florida, and retailers with an RFID-tagged, all- plastic pallet pool. has revolutionized the pallet-rental business. Its innovative plastic pallets offer dramatic economic and environmental improvements Business Situation iGPS needed an efficient, precise way to over the 1 billion wood pallets in use in the United States. But iGPS track and manage its innovative and pallets cost twice as much as typical wood pallets, so tracking them valuable plastic pallets in real time across global supply chains. is crucial. The company and its solution partner, Xterprise, used radio frequency identification (RFID) software from Microsoft and Solution With the help of its technology partner, other vendors plus RFID hardware to build a best-of-breed asset- Xterprise, iGPS built an advanced tracking management application. Now iGPS can manage its pallets across and management system that takes advantage of radio frequency identification extended customer supply chains in real time, deploy pallets more (RFID) technologies. efficiently, prevent losses, and invoice customers with Benefits unprecedented accuracy. What’s more, iGPS customers can track Tracks assets in real time and manage product inventories precisely and with better visibility Prevents losses and theft Optimizes pallet use without directly implementing RFID technology. Enables accurate invoicing Eases inventory management
  2. 2. Situation which made it imperative that the company Consider the humble shipping pallet. This track them efficiently to offer a cost- lowly yet essential asset constitutes one of competitive alternative to wood pallets. The the biggest hidden costs in supply chains founders of iGPS considered that problem today. To eliminate the costs and headaches right from the start and came up with a bold of buying, tracking, and managing pallets, solution. They would build real-time inventory many corporations prefer to lease pallets management technology into every pallet from “pooling” companies. Pallet pooling is a they leased. big business, with gross revenues of U.S.$14 billion annually worldwide. Solution To make the solution work, iGPS needed a More than 97 percent of the 600 million trustworthy tracking infrastructure that could replacement pallets produced in the United extend across a variety of supply chains. To States every year are made of wood, provide that infrastructure, iGPS hired a according to Modern Plastics Worldwide solution partner, Xterprise, based in Dallas, magazine. As forests disappear, wood pallets Texas, which had developed many “high- get costlier. Wood pallets also pose other definition” supply chain solutions that are challenges. The International Plant Protection enabled by radio frequency identification Convention requires that wood pallets for the (RFID) technology. import/export trade be fumigated or heat- treated to prevent the spread of insects. On the hardware level, Xterprise helped iGPS Wood pallets used to ship meat and other find the best RFID tags on the market. In foods are often scrapped to prevent cross- January 2007, iGPS ordered 4.5 million RFID contamination by mad cow disease, bird flu, tags from several manufacturers—one of the and other pathogens. Wood pallets are heavy, largest orders for RFID tags ever placed. and with oil prices constantly rising, Xterprise worked with a pallet manufacturer transporting pallets adds unrecoverable costs to figure out how to embed four RFID tags in to commercial transactions. Further, almost every iGPS pallet. Each tag includes an all wood pallets are tracked manually, with identical Electronic Product Code (EPC) millions of them lost every year. Global Reusable Asset Identifier (GRAI), which gives every iGPS pallet a unique, traceable In 2006, a group of pallet-pooling veterans identity for the life of the pallet. Putting four founded a business that promised a identical tags in each pallet ensures that at paradigm shift away from wood pallets. least one works, no matter how much Intelligent Global Pooling Systems (iGPS), pounding or what temperatures the pallet based in Orlando, Florida, introduced a pool experiences during its life in the supply chain. of 48-inch by 40-inch pallets made of plastic iGPS requested that bar codes be placed on for customers in the grocery, beverage, each pallet, as well, for customers who want home-improvement, pharmaceutical, and to continue using bar-code data collection consumer-electronics industries. iGPS pallets technology. Xterprise also helped iGPS select are more attractive for displays, 100-percent the best fixed and mobile RFID readers from recyclable, lighter to lift, more durable, Alien Technology and Motorola, most of which consistently sized, and far easier to clean and run either the Windows Mobile® or Windows® maintain than wood. CE operating system. But the iGPS pallets cost 2.5 times as much On the software level, Xterprise used its to produce as comparable wood pallets, Xterprise Asset Manager (XAM) application—
  3. 3. previously developed for the Reusable functions such as general ledger and Transport Item (RTI) market—as the basis for reporting. While BizTalk RFID enables developing the iGPS intelligent Stock Use and connectivity to heterogeneous line-of- Movements (iSUM) system. iSUM tracks and business applications, Microsoft Dynamics AX manages iGPS pallets across the supply 5.0 has native RFID functionality. chain. It uses customized implementations of Microsoft® BizTalk® Server 2006 R2 with Customized Xterprise business applications BizTalk RFID—a platform to enable RFID plug- provide other services. Xterprise’s XAM takes and-play device management, application data from the edge servers and then updates integration, and event processing—along with orders and manages inventory on the central Microsoft SQL Server™ 2005 database server. XAM uses SQL Server Reporting software. By using Microsoft components, Services to deliver standard or customized Xterprise was able to build iSUM in months reports, and it uses SQL Server Analysis instead of years. Services to provide online analytical processing reports. Another, Xterprise “We started discussions with iGPS in July AnalytiX uses SQL Server Integration Services “Using our XAM 2006,” says Dean Frew, President and Chief to extract and transform raw RFID data into application, BizTalk Executive Officer of Xterprise. “We competed valuable business information to help save requirements for the iSUM application in money, improve inventory use, and operate RFID, and a service- August, and by the 20th of October, we were more efficiently. Xterprise built these oriented architecture managing inventory as pallets came off of the applications on top of BizTalk Server 2006 production line at a rate of more than one R2 with BizTalk RFID and SQL Server by using gave us a huge pallet a minute. iGPS didn’t have three years the Microsoft Visual Studio® 2005 develop- advantage in time-to- to plan and put together a gigantic system. ment system and Microsoft .NET Framework. Using our XAM application, BizTalk RFID, and market.” a service-oriented architecture gave us a Benefits Dean Frew, President and Chief Executive huge advantage in time-to-market. We could As the owner of the world’s first all-RFID- Officer, Xterprise move quickly and use what we’d done before tagged, all-plastic pallet pool, iGPS enjoys to build a scalable solution that was tailored many advantages. iGPS can track its assets to our customer’s needs.” anywhere in real time, prevent asset losses and theft, use pallets more profitably, invoice iSUM relies on “edge servers”—hardware and customers more accurately, and even help software in far-flung warehouses, distribution customers track their products. Walter Kerr, centers, and retail stores—to collect RFID Chief Information Officer of iGPS, says, data and send it to a central server in a “Everyone thinks they understand the pallet- Grand Rapids, Michigan data center. The pooling business because it looks so simple, edge servers filter data, manage events and but it’s one of the most complicated business workflow processes, and send data by using models imaginable. We’re constantly tracking BizTalk Server 2006 R2 with BizTalk RFID, millions of dollars worth of homogenous along with SQL Server 2005 Standard and assets that are in someone else’s Express Editions. The iGPS RFID source- possession. RFID gives us a data-driven audit tagging system relies on the Xterprise trail so we can track our assets and satisfy Automated RFID Module (XARM), which is our customers. The time-stamped data alone built on top of BizTalk RFID and SQL Server. is far better than anything that has existed until now.” iGPS has adopted Microsoft Dynamics™ AX 4.0 business software to manage enterprise
  4. 4. Tracks Assets in Real Time Optimizes Pallet Use With the precise tools that iSUM provides, With the data-mining tools in iSUM, iGPS can iGPS can track its assets anywhere and at all also figure out where its pallets typically get times, even where RFID would not have delayed in the supply chain and take action worked well or at all before. In the past, when to accelerate them. iGPS learned that its a truck arrived from a pallet supplier, a pallet pallets often slow down in the retailer customer rarely knew if it contained the network. Because iGPS can tell exactly when number of pallets listed on the invoice. It was a pallet enters and leaves the retail network, usually too time-consuming and difficult to it can offer retailers incentives to return count the pallets. With iSUM, they’re counted pallets within set time limits. Kerr says, quickly and automatically as they’re unloaded “Before RFID, we couldn’t do that. Our trip and rolled in front of an RFID reader. time now is less than two-thirds that of a Concrete and liquids, commonly found in traditional pallet pooling company.” supply chains, can throw RFID readers off. Even in those circumstances, iSUM’s Enables Accurate Invoicing “Our pool is self- redundant RFID tags make its readings nearly 100 percent accurate. So do its rule-building One of the biggest problems in traditional pallet pooling has been inaccurate billing. reconciling. When you tools, which rely on BizTalk RFID. If a forklift Because of faulty visibility on pallets in the rent a pallet from us, driver moves a pallet back and forth in front of a reader, iSUM will identify the pallet and supply chain, billing was more art than science. A pool operator might want to bill a iSUM keeps track of it count it just once. customer for lost pallets, for instance, without transparently and in real Prevents Losses and Theft accurate records to back up the billing claims. The customer had to accept the bill time, so there are no Before, a dog food maker might send a pallet on faith or look for another pool operator, surprises or disputes at of rations to a wholesale store. A local feed store owner might buy the whole shipment which was hard to do in a business with few competitors. With iSUM, faith-based billing is the end of the year.” and drive away with the pallet. Like millions passé. of others every year, the pallet was gone—and Walter Kerr, Chief Information Officer, iGPS the pooling company would probably never Accuracy in billing reduces friction between know when or if it was returned. RFID iGPS and its customers. “Our pool is self- technology changes that. iGPS can reconciling,” Kerr observes. “When you rent a triangulate between where a pallet last pallet from us, iSUM keeps track of it appeared and when and where it was transparently and in real time, so there are returned, to help iGPS find and plug supply- no surprises or disputes at the end of the chain leaks. The iSUM system can also year.” monitor inventory history and send an alert if it appears that theft is taking place at a Eases Inventory Management specific location, saving money for iGPS and iSUM provides other benefits to pallet its customer. On a larger scale, with the data- renters. Customers can use it to locate and mining tools in iSUM, iGPS can see loss and recall defective products while they’re still in theft patterns and make strategic transit, before they hit store shelves. And adjustments. Kerr says, “Our asset control is pallet renters can take advantage of iSUM by much better than any other pooler’s. In a using bar-code readers, which are ubiquitous Sarbanes-Oxley world, that’s a big deal.” in the supply chain, without investing in RFID readers or infrastructure. Every iGPS pallet
  5. 5. For More Information includes a permanent bar code, which iSUM bolted to pallets to let manufacturers know For more information about Microsoft links to the pallet’s GRAI. Because of that when fragile products are damaged by products and services, call the Microsoft link, customers can still track an iGPS pallet temperature changes or rough handling. With Sales Information Center at (800) 426- through the supply chain using just a bar- new capabilities like that, iGPS is keeping 9400. In Canada, call the Microsoft code reader and Web access. What’s more, very busy adding some of the largest Canada Information Centre at (877) 568- customers no longer have to spend money corporations in the world to its pool. One 2495. Customers who are deaf or hard-of- affixing bar codes to product shipments, customer is developing a new warehouse hearing can reach Microsoft text telephone because iGPS already puts bar codes on its management system. Kerr says, “They could (TTY/TDD) services at (800) 892-5234 in pallets. be the first manufacturer in the world that the United States or (905) 568-9641 in skips the bar-code paradigm and goes Canada. Outside the 50 United States and Despite the company’s concessions to bar- straight to RFID. So we’re seeing a lot of Canada, please contact your local code users, Kerr believes that bar-code successes. I can promise you this: The RFID- Microsoft subsidiary. To access information technology will soon be a thing of the past enabled pallet will revolutionize the supply using the World Wide Web, go to: “There are tremendous capital outlays and chain. Five years from now, it’ll be the norm.” procedural problems in using bar codes,” Kerr says. “If you can eliminate them and still For more information about Xterprise have unitized tracking numbers, why not do products and services, call (972) 690- it? If putting a bar code on every unit of 9460, x300, or visit the Web site at: shipped products cost you five cents a load before, and you shipped 50 million loads a year, you’ll get significant savings from using For more information about iGPS products RFID—in an industry where margins can be and services, call (800) 884-0225 or visit tight.” the Web site at: Microsoft Server Product Portfolio iGPS is constantly exploring new ways to use For more information about the Microsoft RFID to help its customers. For example, the server product portfolio, go to: company can connect RFID tags to temperature- or movement-sensitive sensors Software and Services Hardware Microsoft Server Product Portfolio Alien fixed RFID readers − Microsoft BizTalk Server 2006 R2 Alien RFID inlays − Microsoft SQL Server 2005 Zebra RFID label printers Microsoft Dynamics Motorola mobile RFID readers − Microsoft Dynamics AX Avery Dennison RFID inlays Microsoft Visual Studio Dell server computers − Microsoft Visual Studio 2005 Windows CE Partners Windows Mobile Xterprise Technologies − BizTalk RFID − Microsoft .NET Framework − SQL Server Analysis Services − SQL Server Integration Services − SQL Server Reporting Services This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published April 2007