The Granite Rock Co. -- and its customers -- know more than you might think about the construction trucks that pass through its rock quarries.
The Watsonville, Calif.-based provider of bulk rock and asphalt for construction projects
installs radio frequency identification (RFID) tags on its delivery trucks and analyzes the
resulting data for
There is a dearth of BI tools for RFID data, despite a surplus of money available for BI projects, according to Keith Gile, research director at Cambridge, Mass.-based Forrester Research Inc. In a March 2005 study, Gile said that BI vendors were "sleeping through RFID's arrival" and leaving money on the table by not making RFID-oriented BI tools. Nine months later, not much has changed, Gile said in a recent interview.
"It all boils down to processes optimization and which of [a company's] processes can be impacted by RFID," Gile said. Processes like order fulfillment, inventory management and accounting could all benefit from RFID BI. This kind of analysis could head off problems like food spoilage, product recall management, shipping damage or needless stock surpluses. There are many possibilities, Gile said.
Graniterock has designed its own reporting and management system, and reports increased operational efficiencies. The company scans the RFID tags affixed to all trucks that arrive at its quarries. This records which company owns the truck, the licensing information, what project it's associated with and what it's picking up. Then, electronic signs direct the truck to the correct loading location within one of its quarries, which are usually about 10 to 20 square miles in size. Once it's loaded, Graniterock weighs the truck and scans it again on the way out. All this data is collected and analyzed with a custom-developed application, which includes a Microsoft SQL database and integration with Crystal Enterprise from Business Objects S.A., a BI vendor based in Paris.
"We're really using the information that we get through the RFID stations to figure out where the throughput issues are," said Steve Snodgrass, chief financial officer at Graniterock. By analyzing RFID data, the company has been able to get trucks through their quarries in about 10 to 15 minutes, almost half the time it used to take. The company also provides detailed reports via e-mail, enabling customers to analyze the efficiencies of the delivery trucks.
"The freight is often more expensive itself than the product being delivered," Snodgrass explained, which makes customers especially interested in the e-mail reports and sets Graniterock apart in the commodities-based business. The company also uses BI tools to support customer service and billing operations, optimize internal processes and track safety information, like truck maintenance records. It's a good thing that the custom-built system works well for Graniterock. Analysts said currently, there aren't any other options for getting BI from RFID.
Where are the vendor tools?
Businesses have money to spend on RFID and BI, in part, because of mandates from retail giants like Wal-Mart and Target, as well as government entities like the Department of Defense. These companies rely on RFID-based systems to manage goods and services, and now require that suppliers invest in similar technology if they want to do business with them. As long as businesses are implementing RFID, they'll want BI from the data that the tags generate. Currently, they won't find a specific application for this process, Gile said.
Of course, there are reasons why BI vendors haven't risen to the RFID challenge yet.
"Their technology may not be best suited for this," Gile conceded. Successfully linking RFID and BI entails leveraging intellectual property about manufacturing and supply chains that these vendors probably don't have, he explained. "But why wouldn't they bring partners to the table?" Gile asked.
That's just what Business Objects is doing.
"Business Objects is in the process of building relationships with partners that are "heavily involved with RFID," said Russ Hill, director of worldwide consumer packaged goods and retail marketing. But getting BI from RFID is not an easy problem to solve, he said.
There are hardware suppliers, application developers and professional service providers that all will play a part in the ultimate solution, Hill said. Part of the problem is the hardware required to transmit the data, which is still in its infancy. Then there are the challenges of aggregating and understanding the immense amount of data that RFID could potentially generate.
"It's almost overwhelming to the industry to understand what questions to ask," Hill said. Currently, vendors, industry associations and customers are starting to discuss potential solutions, he said.
Hill was reluctant to predict when a RFID-BI offering would be available from Business Objects and its partners.
"We're in discovery," he said.