Social Security Administration gives RFID a try: starting with asset tracking and warehouse management, the agency is building a business case for further adoption

Frontline Solutions, March, 2004 by Brian Albright

You wouldn't be blamed for thinking the only logistics issue the Social Security Administration (SSA) has to worry about is shipping checks to an ever-growing number of retirees, but you'd be wrong. This government agency moves more than money; it also moves a lot of stuff--more than 240,000 line items, everything from computer assets and office supplies to gobs of literature sent to regional offices and private companies in the U.S. and around the world.

The SSA currently uses bar coding for inventory management, but it's investigating RFID technology for several applications, including warehouse management and asset tracking.

The SSA started small with RFID, but it's slowly building a business case for further adoption, says Gary Orem, IT specialist and project manager for the SSA's logistics systems.

Initially, staff began experimenting with RFID at the organization's self-service supply store, testing the technology for access control and user validation when employees picked up their office supplies. The store stocks 1,500 different items, including office supplies and forms, and it serves more than 10,000 employees.

"If we knew who the person was, we could track assets into the offices," Orem says. "You match the person with the receipt, and then you know that those particular items left with that person."

During the tests, the SSA scanned RFID badges to verify shoppers and scanned some high-volume items at the checkout. The item tags contained product number, price and description. The test application generated receipts, modified stock availability and automatically placed orders to the warehouse management system based on preprogrammed reorder levels.

The SSA also successfully tested pallet tracking, validating that pallets could be time stamped and tracked as they entered and left the facility.

The in-store application has not been implemented because tag cost remains high compared with the cost of most items in the store. The success of the pilot, however, did lead the SSA to another application.

The agency operates an 86-vehicle motor pool, which receives approximately 1,100 vehicle requests per month. The SSA has replaced paper travel tickets with RFID-tagged key cases to check vehicles in and out, and it developed a fleet management application linked to its online vehicle request system. Operational improvements will save tens of thousands of dollars annually. The agency is also tying this application to its automated fuel and mileage monitoring system. The system was deployed in August 2003.

The SSA uses Intermec Technologies Corp.'s 900MHz Intellitag technology and readers for its systems and tests.

In the Warehouse

Now that the agency has had some success with RFID, Orem's team is looking ahead to other possible applications. "We want to deploy what we've learned to make it work with our warehouse management system," says Orem.

The SSA operates three warehouse facilities in Woodlawn, Md., totaling 320,000 square feet. The facility at Middle River is the largest of these, and it acts as the central warehouse and supply building, as well as the agency's national computer center. Additional facilities are located in Richmond, Calif., and Birmingham, Ala. The warehouses service 3,500 customers, who can request from 4,000 items, including forms, pamphlets, supplies and publications.

The agency has already upgraded its warehouse operations with Radio Beacon Inc.'s warehouse management system. Before automation, orders were processed in batch, and staff spent hours searching through 25,000 different storage locations to retrieve material. Even when they located the correct storage bin, they often found the warehouse was out of stock on some items because inventory updates took weeks to process. Warehousing operations had a 10,000- to 12,000-item backlog.

The warehouses went live with Radio Beacon in 1999, and they now maintain fill rates of 94%, with minimal safety stock.

Orem says that 98% of the orders are processed within eight hours, and the agency was able to reduce its warehouse space by 60,000 square feet through optimization.

Order processing time has gone from 30 days to 3, and the order backlog has been eliminated. Picking increased from 500 lines per day to 1,500. Emergency order fill rates went from 90% to 98%.

Through warehouse space reduction, reduction of contracted staff, manual order processing, redundant ordering and elimination of errors and data entry, the SSA saves more than $700,000 per year.

Now, Orem's team would like to use RFID tags on excess equipment stored at the Middle River warehouse. The tag would act as a license plate to track the status of the equipment as it travels between SSA headquarters and the warehouse and as items move in and out of storage.

An even more promising application would be tagging and tracking the enormous volume of publications that are shipped in and out of the Maryland facilities. Publications are time sensitive and must be periodically destroyed and replaced to reflect changing regulations and administrations. Mistakenly shipping out old publication stock would cause problems for both the SSA and its customers.