Jack Link's Beef Jerky, like so many small and medium enterprises (SME), had been intensely focused on manufacturing and making the best beef jerky available. As a result, the company had neglected its supply chain for several years. The company decided to reverse this set of circumstances by implementing radio frequency identification (RFID) technology together with its underlying best practices and the support of Microsoft.
This article looks at how the company chose to get in front of the technology curve before the information highway passed it by. Specifically, the article examines
- RFID philosophy for SMEs (see Part One)
- Company background (see Part One)
- Approach to RFID implementation (see Part Two)
- Expected benefits
- Lessons learned
At the conclusion of all phases, Jack Link's Beef Jerky will have invested a significant amount of time, energy, and money. However, the company's analysis concluded that this investment will realize several significant benefits, including
- Improved inventory accuracy
- Reduced manual recording
- Increased visibility
- Facilitation of product recall and minimize exposure
- Significant reduction in time required for a recall from several hours to minutes
- Increased food safety through ingredient tracking
- Automated regulatory compliance and integration into the enterprise resource planning (ERP) software
With the exception of product recall and safety, these benefits are common outputs from RFID implementations. For the food and beverage industries, the ability to narrow the scope of a recall can expedite the process and minimize adverse public attention being attracted to the problem.
To expand the RFID technology to other facilities and production lines will still require the infusion of capital for equipment and tags. However, the successes achieve in Phases I and II are verifiable and repeatable. Jack Link's Beef Jerky has done the hard work, namely proving the concept to its own management.
This is Part Three of a three-part note.
Part One presented an RFID philosophy for SMEs and the company background.
Part Two detailed the implementation phases.
If, like reading a mystery novel, you skipped the previous sections to get to the serious stuff, shame on you! You may have missed some interesting and revealing steps in a successful RFID implementation process. Regardless, let's briefly review the important lessons that the four-phase Jack Link's Beef Jerky approach can teach us.
Start Small, Think Big
A downfall with many technology projects is that companies take on more technology than their organizations can digest and utilize. Clearly, Jack Link's Beef Jerky avoided this pitfall by concentrating the deployment on a single SKU and production line. In addition to keeping the capital investment to a manageable level, the company was able to focus on a finite piece of its business process to identify problem areas and concerns.
Are all of the problems resolved? No, solutions for working in caustic conditions such as acid wash, coping with drastic temperature changes during the manufacturing processes, and finding packaging material most conducive to a radio frequency environment still need to be finalized. However, these types of problems have been identified in the operating laboratory before full deployment to the production floor.
Despite working in a rather limited setting in terms of SKUs and production lines, Jack Link's Beef Jerky had the foresight to envision the full impact of RFID on its manufacturing setting. So, Jack Link's Beef Jerky certainly started small but is already beginning to fill in the pieces of the bigger picture.
Work on Your Own Schedule—Time Takes Time
Recent press reports have alluded to the fact that many of Wal-Mart suppliers, who were "selected" to participate in the initial phase, had difficulty in meeting the January 2005 target date. Especially when dealing with new technology, what once was thought to be a reasonable time schedule now appears to be unrealistic and economically impractical, with little or no financial returns to justify the investment. Jack Link's Beef Jerky taught us to allow for plenty of time and, when possible, to work at your own schedule and pace. The company could see the writing on the wall and importance of a customer like Wal-Mart. Instead of waiting and reacting, the company decided to be proactive and gain a foothold on the slippery slope of new technology.
Embrace an Embedded Solution
As a personal philosophy, whenever your organization can be shielded from working under the covers of unfamiliar code and logic, the better off you will be. Accepting this philosophy as a premise, working with a RFID solution embedded in ERP software and using an existing user-friendly interface can help to guarantee the success of the project. Understanding this may not a universal axiom, at least for SMEs, this should be the preferred course of action.
Leaf-frog Technology with a Single Bound
Jack Link's Beef Jerky success was due, in a large measure, to the fact it was not encumbered by an existing barcode infrastructure. The company did not have to concern itself about completing the payback period of a barcode system before deploying RFID technology. In most cases a company can get burned by bypassing technology—savings not realized, additional personnel required, and improvements to service levels not achieved. However, because, technologically speaking, RFID is following closely on the heels of barcoding, this may be the exception to the rule and is worth investigating.
Jack Link's Beef Jerky implementation is intriguing due to its involvement with the larger Wal-Mart project, which is getting most of the press and coverage. However, would Jack Link's Beef Jerky have implemented RFID without Wal-Mart's insistence and the concern at loosing one of its largest customers? The answer is that Wal-Mart's mandate was the trigger for the company to explore RFID. It is pretty safe to say that without Wal-Mart driving RFID, Jack Link's Beef Jerky might never have considered using the technology to drive efficiencies in its own supply chain. But, by proceeding with the subsequent phases Jack Link's Beef Jerky displayed a proactive and aggressive posture.
The nagging question is, "Can SMEs justify RFID?" The answer is an emphatic "Yes." While SMEs may not have the economies of scale of large companies, their business case could end up being more positive since they typically do not face the "innovator's dilemma" of an established bar code infrastructure. Jack Link's Beef Jerky case study demonstrates that many SMEs have not fully leveraged barcodes internally and thus still rely largely on manual data entry, resulting in untimely, inaccurate data and process inefficiencies.
Whereas many large enterprises do not see a benefit from RFID through increased inventory accuracy, there appears to be a genuine opportunity for SMEs to leapfrog the barcode area and justify some of the cost of RFID based on automated, timely, and accurate data capture and its associated advantages.
About the Author
Joseph J. Strub has extensive experience as a manager and senior consultant in planning and executing ERP projects for manufacturing and distribution systems for large to medium-size companies in the retail, food and beverage, chemical, and CPG process industries. Additionally, Strub was a consultant and Information Systems Auditor with PricewaterhouseCoopers and an applications development and support manager for Fortune 100 companies.
He can be reached at JoeStrub@writecompanyplus.com.