CC BY
46
https://doi.org/10.29013/ESR-20-1.2-84-88
Doborjginidze Giorgi, PhD in Engineering sciences, Georgian Technical Universityy PhD in Engineering sciences, the Faculty of Business Engineering
E-mail: G. Doborjginidze@gtu.ge Petriashvili Lily, PhD in Engineering sciences, PhD in Engineering sciences, the Faculty of Informatik
Georgian Technical University E-mail: L. Petriashvili@gtu.ge
IMPROVING EFFICIENCY OF INVENTORY IDENTIFICATION SYSTEM
Abstract. Increasing globalization process requires permanent transformation in the supply chain management to meet present-day challenges and improve competitiveness of the local economy. Following from the above- stated, the complexity supply chain increases. Thus, intelligent automation of the supply chain processes using modern information technologies becomes necessary. Supply chain management industry progressively develops throughout the world and implementation of its efficiency depends on growth of economic potential of a country [5].
Movement of material flows in supply chain is impossible without concentration of the inventory reserves in certain locations. Management of inventory flows becomes a key issue for the competitiveness of supply chains. The process of efficient management of the above- mentioned material flow is complex, as it is related with compliance with quantitative and stock management requirements, stock keeping accuracy, formalization of necessary documents, loading and unloading processes, transportation, etc.
Keywords: RFID, SCM, Material flows, Identification, Modulation-demodulation, Non-contact data, Inventory, Warehouse, Algorithm, ABC classification.
Definition. Movement of material resources achievements of the recent years [1]. Introduc-
through warehouse is related to significant labor tion and implementation of the above-mentioned
inputs, which increases the cost of goods sold. The technology provides new opportunity of efficient
problems, related to warehouse operation have im- management of the whole supply chain as well as
pact on rationalization of movement of material re- one of its important components - warehouse. In
sources in supply chain as well as to transportation warehouse logistics, the potential of use of RFID
and logistics costs. innovative technology is quite high, on the basis of
Non-contact data exchange RFID (Radio which strategic results of high standard can be re-
Frequency Identification) technology, which al- ceived. In the case of use RFID technology, identifi-
lows consumers to receive, remotely, the existing cation of any goods is possible without the physical
identification information about any object and touch, i.e. visible contact. Use of RFID technology
the report about this object using radio frequency in warehouse logistics saves time and reduces the
waves, may be considered as one of the innovative costs of operation.
RFID technology, as a system, consists of several components: the first one is RFID-transponder (i.e. RFID-labelled RFID-tag), where ID code of the object and various important information about the object is stored. The second one is a RFID-reader, which allows remote (max. 20 m), contactless reading of information from the transponder, attached
to the object and its transfer to the software, where processing/ analyzing of this information is possible. In its turn, RFID transponder represents the unity of a memory chip, radio frequency modulation- demodulation block and antenna. Fig. 1 [4] schematically presents the principle of operation of RFID technology:
Figure 1.
Automation of warehousing processes. As it was already mentioned, RFID technology plays important role in efficient management of economic processes, occurring in supply chain, and is particularly favorable in warehousing processes.
Activities, occurring in warehouse may be divided into three conditional processes:
Receipt of goods in warehouse;
Identification and storage of goods;
Issue of goods.
When attaching RFID code, one of the most important processes is assigning of code to the goods and placing of goods on the relevant shelves in the warehouse. The subject of our research is a sectional warehouse of relatively complex structure, where goods are stored thematically. This, warehouse is divided into sections correspondingly. Certain SKUs (Stock Keeping Unit) is stored in specially allocated sections or racks. The goods, received in the warehouse, shall be attached an address, i.e. the place of its storage (number of rack, number of shelf, line, section on the shelf) and shall be recorded into transponder.
It is possible to divide the whole storage space into several functional areas, e.g. according to the SKUs and inventory velocity. According to this principle, the warehouse area is divided into storage blocks, having similar parameters (proximity to the goods loading/ discharge zone, similar temperature regime, similar humidity regime, etc.). In their turn, storage blocks are unified into zones. Specific block cannot belong to several zones. For creation of storage blocks, these blocks shall have certain attributes. Certain storage zone corresponds to each group of goods nomenclature. Such approach allows creating flexible mechanism of placement of the newly received goods in rack drawers. If the storage zone of the warehouse consists of several blocks and the system tries to place the newly received goods in the first block but finds out that the number of places is not sufficient, it will look for places in the next block of the zone, etc. Looking for the free places in the blocks is carried out according to the priority of the block in the zone.
In this paper the algorithm is discussed, which has been developed for the assigning of RFID code to the goods and arranging them on appropriate racks. This method will contribute to fast identification of the goods and their placement on the shelf as well as fast issue/receipt process of inventory (Fig. 2). When arriving to the warehouse, the nomenclature group of goods will be identified. Storage zone will be determined according to the assigned goods nomenclature code. Determination and control of norms of the status of inventory will be carried out through division of goods (inventory) of all no-
menclatures, material resources and other valuables into three unequal sets - A, B and C, which are equivalent to some algorithm. In our case, total quantity of orders, received during certain period, shall be counted and divided by total number of SKU; thus, mean value of orders P per SKU of N nomenclature will be received.. In their turn, A, B and C sets may be considered as the unity of
A = (al,a2,a3,... ak),
B = (bl,b2,b3,... bn),
C = (ci,c2,c3, ... cm ),
elements. The elements of these sets may be specific type of material resources as well as certain group.
All elements (material resource, goods), for which the number of orders exceeds average value of the number of orders P 10 times or more, will be unified in subset A. The sub-set C unifies the elements, for this the number of orders is twice less as P, and subset B unifies the rest. The probability of demand for specific material resources for sets A, B, C is based on different laws of distribution (2). It is assumed, that for example in retail and distribution 75% of the inventory cost is made up ca. 10% of total SKUs (subset A). 20% of the inventory cost is made up of only 25% of SKUs (subset B). Consequently, 5% of the remainder cost includes 65% of goods (subset C). Taking into consideration the above-mentioned method, the priorities of ABC sets in zones shall be necessarily indicated. As a rule, the most easily accessible inventory are allocated for block A (as a rule, the shelves of the lowest line of the racks in the closest proximity to the loading/discharge area), as the goods of this category have the highest inventory velocity and the number of their issue and receipt is quite high. Less accessible inventories are allocated for the goods of group B (second tier of racks, relatively remote from loading/ discharge area, etc.). Consequently, inventory with lover velocity (shelves, located at higher level) are allocated for the goods of group C. Certainly, such method can be developed in any way; We assigned ABC classes according to the inventory velocity and, consequently, goods will
be placed in storage according to the number of their issue/receipt. We may divide into ABC groups not according to the inventory velocity, but according to perishability of goods, storage temperature regime, humidity level, etc [6]. Correspondingly, ABC blocks will be allocated not according to the principle of easy accessibility/ difficult accessibility, but according to temperature zones, humidity zones, etc.
Table 1.
Nomenclature class Sequence of searching
I II III
A A B C
B B C A
C C B A
In the blocks of goods storage zones of the warehouse, goods are placed in the first free shelf which is available. It means that up to the level of zone blocks, the warehouse is organized according to sectional (static) model, and inside the blocks - according to usual (dynamic) model. To ensure higher mobility of arrangement of the goods in the warehouse and compliance with every-day demands, periodically (once a week, once a month) the variance of demand for goods shall be determined, i.e. mean value P of the number of orders shall be calculated, i.e. new ABC classification shall be determined and, correspondingly, arrangement of the goods on shelves shall be changed.
After the shelf for storage is determined for the goods using one of the methods, the goods will be assigned a code (address), which is recorded in transponder and the warehouse staff will be able to place the goods in the appropriate shelf. Another important process is development of algorithm for control of movement of goods and empty shelves on the basis of data of RFID reader. Automated identification of products using RFID technology allows control of movement of various goods in different time periods (manufacturing, storage, transportation, etc.). Similar control is possible through introduction of the systems of automated identification and reading of transponder, which significantly determines the efficiency of an enterprise [7; 8].
The developed algorithm is based on statistical analysis radio frequency reader (RFID) data and their processing for the purpose of identification of products. For identification of goods and storage racks/shelfs, active transponders are used, which allow reading of data in relatively large radius (up to 20 meters) and 100% result can be achieved in the case of simultaneous reading as a result of analysis of identification frequency in reading zone.
Special feature of the below given algorithm is in its uninterrupted operation, turning on/off which does not require human involvement. Operation of the algorithm may be divided into two logical parts: accumulation of data in time unit (n) about frequency on reading
Z[z,a ] = Xn
Where Z is frequency, time interval, a - identification number of the rack, read from the transponder, n - the umber of ID codes read in time (t) unit. This part of the algorithm works permanently and consists of two parts of memory, where the information, read from the transponders is stored in one, and the data, read from the rack transponders - in the other. The data are stored as the key (data) set, where time interval is the central data, on which the frequency of reading the keys depend.
After each elapsed t period the code of rack is checked. In specific time period, transfer from the rack, marked with transponder 1 to the rack, marked with transponder 2, occurs. Consequently, the algorithm of detection of transfer from one tack to the other will be as follows: if the current position (rack number) does not exist, maximum frequency indicator in n seconds will be set.
Xmax a[nmax]
Where ymax is the position of maximum demonstration of frequency.
As soon as the frequency indicator of appearance of transponder exceeds the current one, timer will start; interval indicator is selected experimentally and represents a constant value
_ _ Toverall
time ^
Where ztimk is the time of timer starting, toverau -total time of current movement. If transponder changes and timer did not manage to start, timer value will be zeroed and restarted, and in the case of starting - the value of movement in the form of initial and final rack values will be transferred.
The given algorithm and RFID technology allow 24-hour tracking and recording of products, presented on the shelves.
Conclusion
Use of modern RFID technology in the process of optimal management of material resources in supply chain and their identification ensures not only achievement of high economic efficiency, which is reflected in the process of supply/ demand
of products, but also reduces the time, costs and risks, related to inventory management.
The algorithms discussed in this paper, are based on statistical analysis of radio frequency reader (RFID) data and their processing for the purpose of recognition of product. For identification of goods and storage racks active transponders are used, from which data are read and frequency parameters are analyzed. With minimum time and costs, compliance of product with quantitative and nomenclature demands is determined, type and quality is accurately identified, necessary documents are drawn up, loading on/ discharge from transport vehicle is carried out, etc., which, finally ensures efficient management of processes, occurring in improvement of supply chain efficiency.
References:
1. Schapranow K-M., Nagora M. and Zeier A., Co Mo SeR: cost model for security-enhanced RFID-aided-supply chains. Proc. Soft COM - Inter. Conf. on Software, Telecommunications and Computer Networks, 5623688, 2016.- P. 11-16.
2. Casterman A. Repository of the WU Vienna University of Economics and Business.Collaborative Supply Chain Finance. 2016. - P. 25-34.
3. Kersten W., Schröder M., Indorf M. Potenziale der Digitalisierung für das Supply Chain Risikomanagement: Eine empirische Analyse. In: Schmalenbachs Zeitschrift für betriebswirtschaftliche Forschung (ZfbF). In press. 2015.
4. Frank Gilert. „Telematics System" (L. M) Germany, Technical University of Applied Sciences Wildau (TH Wildau), 2018.
5. Isaías Badillo, Ricardo Tejeida, Oswaldo Morales and Mauricio Flores (August 29th 2011). Supply Chain Management from a Systems Science Perspective, Supply Chain Management - New Perspectives, Sanda Renko, IntechOpen, DOI: 10.5772/22229. Available from: URL: https://www.intechopen.com/books/ supply-chain-management-new-perspectives/supply-chain-management-from-a-systems-science-per-
spective
6. Wise Geek (2013). "Effective inventory management" Accessed on 13/03/13. Available at: URL: http://www.wisegeek.com/what-are-the-advantages-of-fifo.htm#did-you-know
7. Kuo R.J. & Chang J. W. Intelligent RFID positioning system through immune-based feed-forward neural network. Journal of Intelligent Manufacturing. 2013. Doi:10.1007/s10845-013-0832-0.
8. Zhang Y., Jiang P., Huang G., Qu T., Zhou G., & Hong J. RFID-enabled real-time manufacturing information tracking infrastructure for extended enterprises. Journal of Intelligent Manufacturing, 23(6), 2012.- P. 2357-2366.
