Philips Semiconductors completes major RFID rollout

Chipmaker Philips Semiconductors has completed a major RFID rollout in Asia, which it is using as a trial to determine whether or not to roll the technology out across its entire global supply chain.

The company hoped to reduce the amount of time it takes to turn around its stock of inventory and gain near real-time visibility of its supply chain - both goals that it believes it has achieved.

The trial was centred on a manufacturing site in Taiwan's Kaohsiung area, which shipped inventory to the company's distribution centre in Hong Kong.

Saleem Miyan, head of global strategic alliances and programmes at the company, says these benefits have been achieved, although it has come at a price.

'We wanted to put RFID into the business and gain some efficiencies in various operations. It costs a lot of money at the moment, it's certainly not cheap, but it actually works, which is the main thing we were seeking to establish,' said Miyan.

The project involved tagging all boxes and cartons sent from the site in Taiwan to the centre in Hong Kong, and then on to all further destinations across the globe - an average volume of about 100,000 items every two months.

'The benefits come from tagging everything at all levels,' he said.

Although the company won't reveal the final costs of the project, Miyan says the bill will be between $500,000 and $1.5m.

The initiative started three years ago, with the first two years spent dealing with internal wrangling and debate before it was given the go-ahead.

'Buy-in is an issue, because this kind of project requires a lot of change to happen. The internal sell was the most difficult I've ever had,' said Miyan.

The chipmaker worked with IBM during the trial, using various technologies, such as its WebSphere software, to set up an operational system.

The system is bring used by Philips in a range of ways, from order preparation and shipping, to the receiving of goods and batch tracking.

Miyan says there are several benefits from the system, including improved productivity, better efficiency and visibility across the supply chain and also in terms of creating a foundation for future rollout across more of the business.

He says the technology will definitely justify itself, but he is still determining precisely how long that period is in the context of this trial.

'We're seeing how to do this, and how to integrate this with our customers, which will be the next phase of our rollout.'

So when can this be expected? 'Soon,' is the only commitment given.