Carriers are extending their business two ways: by global expansion and by added value logistics services such as radio frequency identification tagging and tracking. "Merge-in-transit" is replacing central warehousing for a host of applications.


The techniques for tagging with RFID (or bar code, or a combination of the two) in transit from a manufacturer to a retailer will vary depending upon the nature of the service. And the services, lately, have changed dramatically.


Distribution centers have become a central location for change. They can be conventional and with cross-docking capability. They can be product return centers operated by a carrier, a manufacturer or a retailer. They can be a product repair center. They can be a sorting place that takes goods trucked in by a third-party carrier and divides them up into store-specific directed loads. Carrier, manufacturer or retailer can own the centers. They can also be leased or act as virtual centers operated under lease from third parties.


DHL has been an active player in RFID developments and their application to both traditional cross-docking in a distribution center and in the more direct use of a whole new category of merge-in-transit applications.

"We are already busy in Europe with giants like Metro AG. We provide the RFID service as our value added to the suppliers of Metro AG,"

says Bob Berg, the RFID manager for DHL Americas.


According to Berg, DHL has spent seven or eight years testing and working with pilot operations, working with the U.S. Department of Defense, and as well as being active in creation of RFID standards with global standards body EPC Global.

Follow up:

"We may have a customer who has to have goods all arrive at that the same time from various suppliers. For instance, if you are installing a very expensive computer system in a customer's site where many technicians will be required to receive and install, you will want to have goods arrive at the same time and know they have arrived. The goods may be carried by express, by air freight, and even by ocean,"

says Berg.


This is an example of a customer need that can be fulfilled by the use of RFID technology in combination with a merge-in-transit strategy. It calls for an increased information flow to the suppliers, carriers and receivers electronically.


According to Berg, the customer will know the goods have come directly from the manufacturer and that visibility allows for on-time coordination with the computer implementation.


Berg defines merge-in-transit as a logistics structure without warehouses for distribution of consolidated deliveries of goods to customers from more than one producer/supply source. The order and goods flows are normally separated from each other and are executed by different transport providers. There are no warehouses/docks to consolidate the goods into mixed pallets--the individual components/items arrive separately at the end-user's dock within a set time frame. RFID provides increased visibility to the supply chain to allow the recipient and transportation provider to make adjustments as required to ensure on-time arrival.


In the case of a firm installing a new computer system, the computer supplier may say that it needs to get four technicians to the firm's site and DHL has to deliver all the components by the installation date. The computer components may come in from multiple destinations around the world and domestically. The mainframes may arrive from Taiwan, disc drives from Mexico, cabling from Canada. DHL will arrange for shipping all these items from manufacturers to arrive at the facilities for the installation just before the technicians arrive; all the material arrives and is available for the technicians to install.


In this merge-in-transit operation, the computer supplier doesn't have to ship to one of their warehouses, repack all components into a new shipment and then get the whole load to the customer's installation site. This process cuts out the warehousing and inventory by having everything coming directly from components manufacturer and arriving at a single installation site at essentially the same time. With RFID in the merge-in-transit, all of these goods are tagged and DHL can track them better to time their arrival better.


Berg defines the more traditional cross-docking that DHL uses as

"a logistics activity that attempts to reduce costs and total lead time by breaking down received items on the loading dock in a distribution center."

But there's more to it, he says, as the items are

"immediately matched … with outgoing shipment requirements, instead of stocking the items in warehouse locations and returning to pick for orders at a later time. In the DHL RFID logistics environment, this would typically involve breaking down inbound goods from products in whole pallets, applying RFID tags and then re-palletizing into mixed goods pallets to various outbound destinations."

As the demand for shorter lead times in the flow of goods increases, the use of cross-docking and merge-in-transit with RFID technology is bound to increase as well.


Source: Forbes