DHL to roll out RFID solution

DHL is looking to implement a radio frequency identification (RFID) system to help it reduce its inventory costs and give it greater visibility across its network. The courier firm is on the verge of signing a deal with newly formed company Tagstone to implement the solution across its regional operations in the Middle East.

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By  Peter Branton Published  May 22, 2005

DHL is looking to implement a radio frequency identification (RFID) system to help it reduce its inventory costs and give it greater visibility across its network. The courier firm is on the verge of signing a deal with newly formed company Tagstone to implement the solution across its regional operations in the Middle East. Trevor Peirce, director of RFID programmes at Deutsche Post DHL, which is DHL’s parent company, told IT Weekly that the company expects to implement the solution later this year. “What we’re looking at is providing greater visibility across our network,” he said. “The aim is to give us a better view of the information management systems across the network.” By implementing an RFID solution, DHL is looking for cost reductions across its supply chain and lower inventory costs, Peirce claimed. Another major benefit would be greater automation of the system, he added. “This is one of the most interesting technologies in terms of automation, it takes the responsibility for supply chains away from people, that’s where ID systems most often break down,” Peirce said. The deal will represent Tagstone’s first customer win, with the firm only being formally launched earlier this month. Tagstone, which has its head office and testing facilities in Dubai, is partnering with a number of major players in the RFID industry to offer RFID systems integration and consultancy services. “The barrier [to RFID in the region] has been having the experience on the integration side to deliver something on time,” said Peirce. “There’s still some work to be done to put it all together but this is clearly the right start,” he added. Continued from page 1 For DHL, it was important that it could provide an RFID solution for this region, Peirce claimed, as the company wants to introduce the technology globally. “It’s an important part of our vision that everywhere in the world has to work on standards,” he said. “One of the things that was missing was something in this region,” he said. Deutsche Post DHL currently has pilot projects for RFID schemes in place across its operations in Europe, the Americas and Asia, with the company seeing it as key for improving its performance and offering new services. “For a company like DHL there are all sorts of benefits to doing RFID,” said Elsa Lion, analyst at research firm Ovum. “It gives it much better visibility of where everything is, which means it can really shrink the time it takes to pick up parcels and deliver them. That allows it to do stuff like extend the time it offers for final pick-up for its next-day delivery service because everything is just so much tighter,” she said. RFID also provides significant cost savings for carriers as they have much better control of inventory, Lion said. “You can get into areas like better storage of loads because you know the right temperature and humidity to store them at, so reducing wastage,” she explained. For Tagstone, the DHL project will help it achieve its ambition of becoming the premier RFID systems integrator and consultancy in the region. “We believe that this region will be ahead of Europe [for RFID adoption],” said Andreas Kolb, chief operating officer for Tagstone. However, Todd McGregor, regional vice-president of analyst firm Gartner Group, was more sceptical about the region’s uptake of RFID. “Although the technology is quite reliable now, we haven’t seen any major scale deployments here in the region,” he said. “I think we’re still 12-18 months away from seeing projects happening.”

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