RFID and Lean: how technology can help you fight muda

Several days ago I was reading quite an old whitepaper on how UPS is relying on RFID during their Six Sigma initiatives.

That is something I have already been actively thinking about. Many companies in today's world on one hand struggle from lack of data (a crucial input for Measure phase of 6Sigma DMAIC cycle). On the other hand (and I have already been writing about this) some companies are overloaded with information they never use.

What is the possible reasoning?

I personally see the main problem in misalignment of Business and IT Department goals. Some projects are being implemented by technologists (that's when we end up with too much data nobody cares about), while others are performed by pure strategists, who in many cases do not believe in high-tech solution and try to keep costs as low as possible.

"Fostering business and IT strategies coupling" is kind of a personal mission statement I created for myself one year ago. The more I work, read, experience and learn, the stronger my focus on fulfilling this statement becomes.

As an IT specialist striving to become a business professional I find it quite appealing to look on management techniques as an engineer and on new innovative technologies as a business strategist.

I guess it should be surprise for no-one that I would like to start on coupling two topics which are in the center of my professional attention at the moment: RFID (Radio Frequency Identification) vs. LSS (Lean Six Sigma)

How to couple Six Sigma and RFID should be more or less clear to all of you, who have a rough idea about those technologies:

Because RFID offers the potential to collect and store data without human intervention, the technology can provide a relatively low-cost solution when spread over a large number of units. When compared to the costs of data entry or manual scanning of barcodes, RFID may be a better, more economical solution for many firms. In the absence of a process measurement system, RFID may provide visibility and process insights that can identify issues early in their lifecycle, and supplement the “M” component of the Six Sigma process.

What one should do during RFID implementations in this case is to do planning and designing based not only on short term gains, but also considering great strategy impact and a huge number of possible use cases a new infrastructure may bring forward. That might be quite a difficult task, when you are struggling to build a great-looking business case and present perfect ROI calculations. Stop for a moment: if your company is actively using Six Sigma approach, ask yourself "How can I make new system as flexible as possible, so that I can add new functionalities, new data collection points, new items to be tracked and traced; understand what are potential scope extensions for the Future". Shortly, that comes to our old great friend "flexibility" again. Please do not design your systems sealed. Allow them to evolve and become more informative in the Future.

Simple example: if you are tracking products inside your facility and are locating equipment in diverse locations, dock doors and chokepoints; ask yourself what else may I want to track in the Future? What kind of data my Black Belts may need? Forklifts and trucks? Returnables? Operators' motions? Once you build a good tracking application, you will be able to add new object types with extremely low cost by purchasing new tags only. When making "Go - Not go" decision think globally about all possible opportunities.  Choose data collection points as effectively as possible, so that greatest amount of measurements can be performed there.

Speaking about Lean, I found that the best way to reflex on the topic is to connect possible RFID use cases to 7 MUDA wastes:

Transportation

• Minimize errors (it's hard to imagine how often and how many items are being shipped to a wrong customer, wrong country or even wrong continent) 
  
• RFID may also help in fast and flexible delivery route planning: you always know what's in your truck, who are the clients, where they are located (add GPS on top!)
  

Inventory

• Real-time visibility of the whole Supply Chain (from materials warehouse to products on-shelf visibility)
  
• e-Kanban implementations to for timely and intelligent Just-in-Time replenishment
  
• RTLS implementations to solve "loosing items" problem (big issue in RTI management)
  

Motion

• Errors prevention: e.g., let the items (pallets, dollies, crates, etc.) talk with a forklift and warn when unnecessary motions are done
  
• RTLS again: do not let people wander around looking for objects
  

Waiting

• RTLS again? Eliminate time spent on waiting by your clients (they are not happy about it) or transportation units (you pay them for this), while somebody is looking for items
  
• Synchronize your production considering states of other cells, inventories and assembly lines. Knowing exactly what you already have and what you need is the key to switch machines from producing item A to item B on time and therefore minimize waiting.
  

Overproduction

• Full Supply Chain visibility
  
• Timely and precise warehouse management through inventory control
  
• Better planning based on real-time point of sale information
  

Overprocessing 

• Elimination of excessive maintenance procedures (it's easy to determine exactly when maintenance should be done for every particular item, tool)
  
• In Healthcare, for example, retesting can be eliminated by providing fast reliable access to patient's treatment history
  

Defect

• Use of Auto-ID combined with Visual Controls to minimize errors of using wrong tool, assembling wrong part, doing operation in a wrong place or wrong time
  
• In Cool Chains use of Active RFID can greatly assist in products scrap due to expiry, through usage of 3rd generation RFID tags combined with temperature sensors
  
• In Healthcare Active RFID combined with different sensors can guarantee defects prevention by warning about external conditions changes
  

These are thoughts which popped up without any brainstorming in a couple of minutes.

Do you have anything else to add?