TNT Acer Case Study
Rolling Out an RFID-enabled China to Europe Traffic Lane for High Technology Products
TNT is one of the world’s leading providers of mail and express delivery services, offering network infrastructures in Europe and Asia. The company employs more than 155,000 people to serve more than 200 countries, including many of the worlds most successful and demanding corporations.
One of TNT’s valued customers is Acer, the worldwide number two vendor for notebook computers and the number three source for personal computers. Focusing on its brand-name IT products, Acer Inc. employees 5,300 globally and generate 2006 revenues in excess of 11.3 billion. As part of its global supply chain, Acer called on TNT to manage the shipment of cargo from its production plant in Guangzhou, via Hong Kong, and direct to end-user customers in Europe.
TNT-Express responded by launching a major expansion effort to expedite the flow of Acer products from China to Europe, a push that included the purchase of two Boeing 747s to handle these growing supply chain volumes. This Acer-driven Asian expansion produced a ripple effect throughout TNT’s worldwide network.
To handle the massive new volume of shipments moving through their main European gateway at the Arnhem Road Hub in Duiven, Holland, TNT knew it needed to improve both its cargo handling capacity and its ability to precisely monitor and manage the flow of those valuable customer products.
That’s when TNT called on Xterprise for a High Definition RFID-based solution.
The Challenge
TNT has enjoyed extraordinary growth in the Chinese cargo market, but their market share still trails those of their chief competitors, which are DHL, Kuehne + Nagel, Schenker, Exel Logistics, UPS and FedEx. In an effort to boost market share, TNT has pursued a number of new sales and service initiatives. TNT’s main strategic initiative was the launch of a new RFID network designed to distinguish the company from its competitors and to establish TNT as a technological innovator.
While retailers such as Wal-Mart and Target are driving RFID adoption in North America, the technology has been deployed more slowly in Europe, where costs and strict ETSI regulations have limited the effectiveness of the technology. At the origin of Acer’s supply chain in China, regulatory issues have also created challenges for the printing and processing of RFID tags.
TNT envisioned leveraging today’s most advanced RFID systems to help manage Acer’s growing cargo volumes, and to position TNT as the clear leader in Asia-to-Europe shipments. But to do that, TNT needed an RFID technology partner who could:
- Refine RFID engineering to increase tag read rates
- Successfully merge RFID labels with existing TNT labels
- Integrate RFID technology with TNT’s internal IT systems
- Develop a business case for a TNT industry solution
- Provide the efficiency, accuracy and security demanded by TNT’s high-tech customers
A High Definition Solution
TNT called on Xterprise to develop and implement a customized RFID solution to track and manage high tech goods flowing through the China-Europe traffic lane. Xterprise responded by refining the Clarity Supply Network Execution (SNE) ™ solution to meet TNT-Acer’s requirements. After establishing a pilot program, Xterprise applied tags to laptop computers bound for two locations managed by one of Acer’s German channel partners. Those tagged laptops were then tracked and managed as they traveled through TNT’s Arnhem hub, through three RFID read points, and on to their final depot destination. A web portal was created to host the supply chain tracking application used to monitor RFID reads from the China-based manufacturer all the way to the end customer.
TNT relied on Xterprise to overcome a number of key challenges, including handling government regulations and operating across various business and cultural environments.
Xterprise addressed, for example, a number of multi-faceted hardware and regulatory issues. ETSI standards dictate that RFID systems operate in the 866-868 MHz frequency band. At the time, most available printers encoded tags that used the U.S. standard 915 MHz band, so Xterprise worked with vendor partners to develop a proprietary hop encoding program that reduced the frequency band of the printer’s embedded RFID reader to satisfy those ETSI requirements.
Those are precisely the kind of enhancements that help define Xterprise High Definition Enterprise™ approach to RFID. The Clarity suite of solutions from Xterprise combine Microsoft technology, continuous improvement and lean supply chain expertise and advanced RFID technologies to deliver previously unachievable levels of timeliness, resolution, adaption and integration. All components of the TNT solution were developed at the Xterprise U.S. RFID laboratory and carefully shipped and installed throughout TNT’s Asia-to-Europe supply chain.
The Results
After a successful pilot deployment and proof of concept, TNT deployed the Xterprise RFID solution throughout their high-tech China-to-Europe traffic lane. That implementation included a scalable, Microsoft technologies based Clarity SNE solution designed specifically for TNT’s high-volume operations and incorporating enhanced tags and updated readers throughout the supply chain.
In the course of extensive business process evaluations at the shipper’s main European hub, Xterprise found other ways that TNT could benefit from RFID and other high performance supply chain technologies. These improvements allowed TNT to gain a number of strategic business advantages, to increase market revenue and share, and to eliminate a number of costly manual processes associated with line-of-sight barcode systems.
Specifically, TNT leveraged this RFID-based High Definition Enterprise to:
- Raise shipment accuracy from 60% to 95%
- Boost European hub throughput by eliminating manual processes
- Offer a differentiated solution, thus achieving greater penetration of Asian markets
- Help its customer, Acer, increase its share of the crucial European PC market
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