SIEMENS

The idea is as simple as it is brilliant. A reader generates a high-frequency electromagnetic field. When a transponder (tag) gets close to the reader, the special structure of the tag alters the magnetic field and in doing so sends specific information about itself. This is the principle behind Radio Frequency Identification (RFID), which enables objects to be identified using electromagnetic waves.
These days, RFID tags can be as small as a grain of rice and it’s already impossible to imagine life without them. You’ll find them in supermarkets, brand-name jeans, government identity cards, and even implanted under the hide of dairy cows, where they provide a wide range of information about the best nutrition for each animal. RFID tags are also implanted in people — for example, in the U.S. in order to rapidly call up vital patient data in emergency rooms.
“Nevertheless, we have yet to fully exploit the potential of RFID technology, especially in manufacturing,” says Dr. Raffaello Lepratti from Siemens Industry Automation in Nuremberg, Germany. “Our RFID-based Automotive Network (RAN) project goes far beyond simple product identification. In fact, we’re developing a cross-company RFID-based material flow control system for the automotive industry, which plans to become the first sector to introduce this technology as an industry-wide standard.”
The RAN project is receiving more than €20 million in funding from the German Ministry of Economics and Technology. “RAN is a consortium of 18 partners,” says Lepratti, who also serves as RAN’s Project Manager. “It includes automakers Daimler, BMW, and Opel; automotive suppliers such as Bosch and Rehau; logistics companies such as BLG and DHL; software firms such as IBM and SAP; and research institutes such as the Institute for Machine Tools and Industrial Management at the Technical University of Munich. In the consortium, Siemens is responsible not only for production planning and control but also RFID infrastructure. As a consequence, it is developing specifications for tags, readers, and the software agents needed to manage the systems.” Software agents are software modules that work autonomously and can communicate with one another.

Sensitive Supply Chains. The automotive industry has undergone a huge transformation over the last few decades. In particular, over the years it has been compelled to develop and produce ever more complex vehicles that are offered in an increasing number of versions. In order to master this challenge, automakers have had to transfer large portions of the value chain to suppliers that themselves obtain components from external companies.
Every automaker thus operates a highly complex value and supply chain that typically encompasses around 50,000 links in the form of suppliers and sub-suppliers. The result is a system in which even the slightest disruption can have an impact on the assembly of the final product. “In extreme cases, the entire production process can come to a halt because a supplier’s truck carrying a part that costs less than a €100 gets caught in traffic,” says Dr. Steffen Lamparter from Siemens Corporate Technology (CT) in Munich.
The RAN consortium includes both automakers themselves (OEMs — original equipment manufacturers) and first and second-tier suppliers. “Let me give you an example of a very basic supply chain,” says Lamparter. “A tier 2 supplier provides a tier 1 supplier with parts for car seats. The tier 1 supplier then puts together the seats and sends them to the automaker’s plant, where they are fitted into vehicles on an assembly line.”
Such supply chains are planned down to the last detail and chronologically coordinated. Some supplier products are delivered “just in time” — in other words, exactly when they need to be installed. This approach has the advantage of keeping warehousing costs low. “However, if there’s a problem while the parts are being delivered, the next link in the chain usually doesn’t find out about it until the component arrives late,” Lamparter explains. “At that point, it’s almost impossible to re-plan the production operation.”
RAN’s goal is therefore to eliminate the communication deficit between supply chain partners through a unique new approach. The concept involves establishing an RFID-based information infrastructure that enables the production lines in all the links of the chain to talk to each other in real time. That means being able to recognize and receive information about supply-chain disruptions at an early stage. “With RAN, automakers can see beyond their own operations,” says Lamparter. “They can then analyze disruptions to a supplier’s operations soon after they occur and take appropriate action.”
This feat is made possible by software agents that allow individual production lines to communicate across company boundaries and automatically coordinate their activities. These software agents act like virtual robots in accordance with the principle of “receive, think, and act.” The agent receives data, processes it, and forwards new information to a system that takes the required actions.
“We’ve already created the RFID infrastructure with tags, readers, and agents,” Lamparter reports. “To show our partners how the system works, we’ve also built a prototype facility that consists of a simple chain including a manufacturer and tier 2 and tier 1 suppliers.”
The role of the suppliers and sub-suppliers is played here by two SmartAutomation test facilities operated in Karlsruhe and Nuremberg by the Siemens Industry Sector’s Advanced Development department. A facility at the Technical University of Munich in Garching serves as the OEM.
To make things easier, the facilities don’t actually produce real automobile parts but rather bottles that stand for transmission components. “Karlsruhe manufactures and packs glass bottles that are then virtually transported to Nuremberg in a simulated truck shipment,” Lamparter explains. “After the bottles arrive, they are filled with solid materials of different shapes and colors. Every bottling operation represents the installation of a certain transmission component.” The filled bottles are virtually sent to Garching, where they are replaced by real transmission components that are then assembled.

Software Agents at the Factory Gate. The tier 1 supplier operation in Nuremberg clearly demonstrates how RAN works. All of the pallets loaded with empty bottles are fitted with RFID tags that each have their own unique code number. The parts are scanned at the “entrance gate,” then again with hand scanners during production (bottling), and a final time at the “exit gate.” Software agents near the gates and scanners record the identification codes and forward the data to a central collection unit known as an information broker. Each code entered is supplemented by information on where a specific part was located at a certain time. The complete information package is known as an “RFID event.”
“The big advantage of RFID tags compared with conventional barcodes becomes clear when you consider that a barcode scanner needs to have direct optical contact with a code,” says Lamparter. “With RFIDs, we can scan entire pallets while they’re still on a forklift. In other words, we don’t have to unpack the pallets to perform the scanning operation. It’s also possible to add information to RFID tags. In contrast, a barcode contains only a serial number and nothing else.”
The RFID events collected by the information broker are called up by a host agent known as the Production Assistance System (PAS), which analyzes the events and compares actual and target values. The PAS agent can thus determine if the delivery in question is proceeding on schedule or whether it’s late. If there’s a problem, the agent can decide whether it’s of a critical nature or whether it can be corrected — for example, by using stockpiled parts in the next link in the chain. If a correction is not possible, the agent calculates new production commands that limit the damage to a minimum — for instance, it moves forward other production tasks that don’t require the missing parts. The newly calculated commands are then forwarded by the host agent to the local production control system. In Nuremberg, SIMATIC IT from Siemens is used for this purpose.
This system processes the new commands and sends them to individual production units. “In other words, the supervising PAS agent is one of the core components of the networked supply chain,” says Lamparter. “It’s the intelligent switching station between the information broker and SIMATIC IT — the reader and the executor.” With RAN, RFID events at all the participating suppliers are now sent to the central information broker. As a result, the automaker’s PAS agent can — for the first time — transcend the boundaries of its own location. It receives information about supplier delays at an early stage and can re-plan its own production commands accordingly. The entire system functions smoothly even in today’s global logistic networks. Whether the carrier is a ship, truck, or plane — RFID scanning at transshipment centers or GPS-based cargo tracking can register the entire value chain in a type of “Internet of Things.” The network, in short, is made up of invisible robots consisting of bits and bytes — the software agents.
“The RAN project will end in late 2012,” says Lamparter. “After that, RAN will have to prove itself in normal operations.” Plans call for long-term tests in conjunction with the automakers involved in the project. “If the system demonstrates its effectiveness, RFID-based logistics chain management could become the standard for an entire industry for the first time,” adds Lamparter.
And beyond the auto industry? “Theoretically, our system can be utilized in any manufacturing sector — even in the pharmaceutical and food industries,” says Lamparter. “All you need is a place to attach an RFID tag.”