Lavazza increases efficiency applying RFID to track packaging supplies

The well-known Italian coffee producer Lavazza and its packaging supplier, Goglio Cofibox have implemented a RFID system that automates the recovery of packaging materials' reels used to create Lavazza  products  and to improve materials' traceability.

The outcome of Lavazza project is presented by Fabio Marzorati, an industrial engineer at Goglio Cofibox and Antonio Rizzi, the director of the RFID Lab in the University of Parma, at RFID Journal LIVE Europe 2009 conference held in Germany. RFID Lab designed the solution and carried out tests to assess the benefits of this technology.

Before applying the RFID system, Lavazza never knew the situation on the orders it sent to his supplier Goglio Cofibox. The supplier as well, never knew whether Lavazza has received the reels, or the amount that the coffee producer had already in store. Moreover, the orders had to be manually activated every time that Lavazza needed to replenish the packaging materials´ stock. To deal with such problems, the system used EPC Gen 2 passive ultrahigh frequency (UHF) RFID tags, allowing -just-in-time delivery by Goglio Cofibox and an automated process for them at the Lavazza ´s establishment near Turin. The RFID project initiated in April 2009 and completely operational in September, has reduced  Lavazza packaging stocks, as well as the storage space, providing the company with a real-time visibility of the inventory levels, the flow of goods and the materials´ traceability.

During the trial, Goglio Cofibox printed and encoded RFID tags using a Toshiba RFID printer-encoder. A label was fixed to the inner ring of every packaging reel and 2 additional adhesive RFID tags were placed on the plastic wrap of the reels. (An additional tag is used inside, directly on the pallets, so it could be still identified after the stretch wrap removal.) The company has codified the tags with a serialized global trade item number (SGTIN) and a Serial Shipping Container Code (SSCC). As the pallet passed a portal reader at the storage area gate, the tags were examined, and their SGTIN and SSCC numbers identified the pallets and the packaging reels. As the materials were loaded onto trucks to be shipped to Lavazza, the pallets´ RFID tags are read for another time. A light indicates to the forklift operator that the goods are identified, and the system has recognized the related bill of lading. Instantaneously, the system sends the bill-of-lading information electronically, via the Internet.

Once the reels arrive at Lavazza, a handheld reader interrogates the RFID tag placed on the outside of the pallet’s stretch wrap, moving then the pallet into the storage. Lavazza has chosen to use a handheld reader, because it wants a single device for all the read points. Both the shipping and tracking information are automatically inserted in a logistics dashboard - a Web application shared by both companies.

By law, the company must monitor the packaging materials´ quality, to ensure that high-quality coffee is delivered to the consumers. Given that the materials have a limited duration of storage, the company must use packaging on a first-in/first-out basis. Lavazza has used the RFID system to select the oldest packaging in storage. An employee uses a forklift to retrieve a pallet, controlling the tag with a handheld reader. By doing so, the system identifies the reels, selecting them as "headed of production."

This system gave to Lavazza and Goglio Cofibox almost 100 percent accuracy on their inventories, and significant time-savings, since the reels are not counted manually anymore. Lavazza revises its forecasts and sends updates to Goglio Cofibox electronically, targeting delivery dates for each order. Goglio Cofibox exploits the information to update the production plan accordingly to the orders from Lavazza.

Furthermore, Rizzi says, Lavazza is better able to manage its inventory, due to the real-time overview of the stock. The company has reduced its general inventory levels, since RFID based ordering, shipping and receiving processes have proved very reliable.