Jack Link's Beef Jerky, an international snack manufacturer, has begun to use radio-frequency identification to tag and ship cases and pallets of one item to Wal-Mart Stores Inc.'s Dallas distribution center from its manufacturing facility in Minong, Wis.
That milestone completes the first of a four-phase project. The investment for phase one at Jack Link's Beef Jerky is $48,000.
The second phase, helping to manage inventory internally, and the third phase, managing the raw materials arriving from suppliers, are scheduled for completion in the fourth quarter. While the capital required for the remaining phases is "substantially larger" than the initial phase, projected return on investment is less than a year, according to Karl Paepke, VP of operations at Jack Link's Beef Jerky.
The fourth and final phase, scheduled for completion in April 2005, will leverage RFID in the distribution process to automate internal stock transfers from the company's manufacturing sites to its central distribution center. "The fourth phase revolves around capturing data from RFID tags to enable us to automatically generate and send advanced ship notices through EDI," Paepke says.
Microsoft is playing a major role in implementation at Jack Link's Beef Jerky. The data from RFID tags is being integrated into Microsoft Business Solutions-Navision, Jack Link's Beef Jerky's enterprise-resource-planning system, to increase visibility and control across its receiving, manufacturing, and distribution processes, as well as to largely automate transactions.
Because Jack Link's Beef Jerky is a meat manufacturer, the company falls under United States Department of Agriculture guidelines and must have complete traceability for raw materials from the time they arrive, through the manufacturing process, and to the consumer. Jack Link's Beef Jerky needs to trace where the meat came from and tie it into a purchase order or a lot number in case there is a future problem or recall.
Today that's a manual, paper-based process. When raw materials are shipped into the facility, the company writes down what is received, the purchase-order number, and the supplier. That piece of paper must follow the product through the manufacturing process. "If you can imagine the very wet and cold harsh environment, sometimes that paper doesn't make it all the way through," Paepke says. "After the fact, we have to collect all the papers for all the different lots we're producing that day and manually enter them into the system."
That will change as Jack Link's Beef Jerky continues to implement automatic data-collection processes. With RFID, once the product enters the building, a lot number is assigned. That lot code and a number on a reusable bin tag are read as it goes through the manufacturing process.
Although Jack Link's Beef Jerky has never experienced an actual meat recall, it carries out frequent mock recalls that show it takes between 12 and 16 hours to manually track every case that came out of one specific lot recall. That's because the company needs to track the customers it shipped to as well as sales orders to which the shipment is tied. "I'm shooting from the hip, but I bet with RFID we can get this processes in under a half an hour," Paepke says. "The data will all be captured in the database. The technology is all out there to make it work."
Microsoft Business Solutions plans to include RFID technology as part of its ERP platform, enabling small and midsize customers to leverage the technology while keeping an easy-to-manage IT environment. The division plans to include RFID technology in an upcoming ERP releases, including Microsoft Business Solutions-Axapta 4.0, Microsoft Navision 5.0, and the next major release of Microsoft Business Solutions-Great Plains scheduled for release around September 2005.