The South African automotive industry, together with DexSecurity Solutions (DSS), has embarked on project that will see the creation of a standard, machine-readable two-dimensional (2D) barcode system for the labelling of parts container consignments between suppliers and manufacturers.
The Department of Trade & Industry (DTI) has agreed to fund 65% of this driven by the Motor Industry Cluster-driven project, from its Sector Partnership Fund after a successful pilot project at Ford Motor Company of South Africa in 2000. DSS has completed the rollout of the system to Ford, chosen by the MIC to pioneer the project, and five of its suppliers. At least 80 more suppliers and most of the manufacturers that form the MIC (including Daimler-Chrysler, Delta, BMW, and Volkswagen) are expected to follow suite in the next year and a half.
Ernest Cockcroft, MD of DSS, says the creation of a standard label incorporating a secure 2D barcode for motor manufacturers and their suppliers is expected to produce a host of benefits.
These include the elimination of time-consuming and error-prone manual data capturing, reduction of shrinkage, simplification and automation of inter-company business processes, and significant cost-savings. Ford has already reported an average direct saving of 30% a month on pallet rental.
Suppliers currently have to adhere to label standards set out by each manufacturer. This is not only costly and complicated, but is also prone to error.
"The IT systems and environments of suppliers and manufacturers in South Africa are disparate, ranging from companies with next to no infrastructure and others with the latest technology. The MIC decided for that reason that a paper-based labelling system would be easier to implement than an EDI or business-to-business e-commerce system.
"We have followed the global standards laid out by the Automotive Industry Action Group in the US in the definition of the labels. That means suppliers who adopt the standard will be ready to export their products," says Cockcroft. DSS will be using its homegrown 2D symbology, compression and multilayer encryption techniques and technologies to meet the goals of the project.
It is supplying the printing module that suppliers will use to print out the standardised labels. These will include a 2D barcode with data such as manufacturer name, supplier name, part number, quantity of parts, shipment date, final destination, and container ID number. DSS will also provide manufacturers with the hardware and software they need to scan the barcoded labels.
Cockcroft points out that projects need to demonstrate that they will provide benefit to an entire vertical industry and the country at large to secure DTI funding.
"Over time, we plan to expand the 2D barcode system into other areas of the automotive industry, such as asset tracking, store management, and direct parts marking.
"The system will eventually even cover vehicle identification and verification. This will help SAPS, the Department of Transport and Business Against Crime in their strategies to address the problems of vehicles being registered with false papers or being moved across the country`s borders," he adds.
DSS, a member of the global Dex Group, has made in-roads in other parts of the world selling similar solutions to automotive companies. The company has completed a project for Daimler-Chrysler in Brazil that saw the rollout of a 2D barcode system for the manufacturer and its partners.
This system replaces the EDI system that Daimler-Chrysler used in the past to share information with its 3000 or so suppliers. The telecoms system in Brazil is unreliable and expensive, with the result that an EDI transaction often reached Daimler-Chrysler after it had taken shipments of a crate of goods.
"Now, a label travels with each container of parts to DaimlerChrysler`s presence, and is scanned into the system immediately. Using our compression technology, we are able to compress all the information needed to meet Brazilian invoicing standards into a single barcode," says Cockcroft.
Up to 15 000 labels an hour are scanned, processed and imported into the DaimlerChrysler database through this system. The success of this project has already attention from Renault and Volkswagen in Brazil, who are due to kick off pilots of the same technology shortly.
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