H&M Bay Manages Its Frozen Freight, Blazes Trail For Growth with RFID

By  Teresa von Fuchs — July 07, 2010

H & M Bay leads the way in providing transportation of temperature-controlled freight in the United States. Learn how the company is using RFID to improve its frozen food transportation system and to ensure its customers' packaged goods are distributed both on time and within the industry's proper temperature controls.
 
By Teresa von Fuchs

In business for more than 25 years, H&M Bay provides temperature-controlled, less-than-truckload (LTL) freight across the continental United States. With strategically located distribution centers in California, Florida, Maryland, Massachusetts, North Carolina and Washington, H&M Bay is always looking for ways to improve its offerings to customers and their experience with its services.

The company had been planning to open a cold-storage cross-docking facility in Federalsburg, Md. for a number of years. Cold storage freight transfers must be shipped and stored in environments that meet stringent guidelines. Detailed records need to be kept about how long transfers between trucks and holding facilities take, and temperatures must be kept within an acceptable range. The benefits of a cold storage facility seemed obvious for H&M Bay, in fact the owners had already lined up a list of interested customers, but the challenges of effectively tracking containers within the new facility were daunting.

John Walker, software development manager for H&M Bay, explained "For [the new cold storage facility] we needed a new type of inventory system, we didn't have anything in house that would work, and when I started to look for something there were a few obvious issues." First, the workforce is all bound to forklifts, so the company needed a truly mobile solution, and second, the layout and continuous ins and outs of the storage facility could lead to tons of errors if the solution relied solely on data entry by operators, this led Walker to think that perhaps an RFID solution would fit the bill.

Then came the familiar hurdles of time and money. "I read a lot about various bigger companies' installations, but in our world we have a much smaller budget, so I wasn't looking to go partner with whoever Wal-Mart is using to do their RFID. And we were in a hurry; we wanted to have the application in place before the cold storage facility was ready to receive any inventory."

In looking for an RFID solution more to its scale, Walker came across a story about a shipping customer of the company's that was using RFID. He called them up for a referral and got in touch with Franwell, a company known for its RFID development in supply chain environments. Walker asked if the solution he was envisioning was even possible and they came back with a proposal that met his time and budget guidelines.

"I'd read plenty about RFID but had never really touched it, so I knew we needed to partner with someone who was really going to work with us," said Walker.

The timeline was tight: Franwell completed its assessment in April, got down to the hands-on work by July and the solution was live (and the facility built) by March -- an impressive accomplishment for any custom built solution -- but especially for H&M Bay's.

"I really didn't have a sense of how different this process was compared with a 'normal' RFID application," said Walker, "but I've come to learn more about how unique this was as we got into it. Typically RFID is good for telling how many widgets we have in a large area, or when a widget has passed by a certain point in a process, but to have your RFID solution focused on processing a single pallet in a particular location is not the standard application. Actually being able to track a specific item to a specific location in a warehouse in real-time is pretty remarkable."

The solution was custom built to track each pallet that enters the new freezer or cooler areas and keep track of where that pallet ends up, how long it's there for and when it leaves. To do this 1,434 stationary RFID tags were installed throughout the warehouse, each are permanently associated with warehouse slots. As a forklift driver puts away an RFID tagged pallet a mobile RFID reader detects the tag and the Franwell system automatically associates that pallet of product with the warehouse location and sends a message to the inventory system. The system also detects when a product is removed from a warehouse location and updates the inventory in real-time.

Because the tags and mobile readers are used in not just a rough warehousing environment, but also freezing temperatures, the equipment needed to be rugged and reliable. Franwell suggested H&M Bay use the Motorola RD5000 Mobile RFID Reader and a Motorola VC5090 vehicle-mounted mobile computer.

Walker was also concerned that pallet information be recorded automatically with limited operator intervention. Franwell designed a very user-friendly and intuitive interface that requires minimal training for the forklift operators.

Though the implementation wasn't without hurdles, Walker has been incredibly impressed with how smoothly working with Franwell and Motorola has been, and how quickly the benefits of the solution became obvious. "We now have real-time inventory information, our LTL truck loads and reloads are much faster and we were able to reduce our cross-docking workforce by 25 percent," said Walker.

The solution has also helped launch an additional revenue source at H&M Bay. "We are now able to offer fulfillment capability for customers with cold storage needs, " Walker said.

With fulfillment services, a vendor ships a truckload (or more) of product to H&M Bay's facility, then fulfills its orders to the local area from that warehouse instead of shipping one pallet at a time across the country.

The service wasn't possible with the company's old system and since H&M Bay's has been able to offer it, revenues have increased by almost one percent in new temperature-related accounts.

T.J. Adams, H&M Bay's warehouse manager in Federalsburg called the RFID system "an inventory control dream" because he can quickly reference product locations: "If a dispatcher has a question about an order," he said, " I use the order number to find its exact location. I can run reports on what is in cold storage and use that to check my inventory. If I had to do this manually it would take a lot of time and stacks of files," Adams said.

Another benefit and definite cost saver the company didn't even anticipate was the system's ability to save operators from accidentally putting product in the wrong areas. "The system actually alerts us if a pallet is placed in the freezer that's meant to go into the cooler," explained Walker. Being able to prevent spoilage and keep clear records of where and when products were moved reduces claims from customers about inappropriately stored or spoiled products: "Those claims were considered a company cost," said Walker. "If an item thawed out on the floor while it was waiting to be transferred from one truck to another, it was our problem, and claims were just paid out, now that doesn't happen anymore."

Along with the decrease in labor costs and spoilage claims, the company has also positioned itself with its new cold storage and inventory tracking system to aggressively grow.

Said Walker: "We have more large customers now who put temperature recording devices in their product, and for the first time we are certain that we can meet their requirements."

And while growth for some companies means growing pains along the way, H&M Bay is now well positioned with a scalable, repeatable and entirely customer transparent system -- one that few others in their industry can match.

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