Operations

The forecast for RFID

Feb. 1, 2012

While the technology could predict inventory needs, it remains on the shelf

One of my favorite courses when I was in college was meteorology. I was intrigued by how things like barometric pressure changes, dew points and adiabatic temperature rates affected the weather, so I actually paid attention and managed to retain a lot of the information. Which means I totally understand how the weather forecast is exactly that, a forecast. In most cases, modern meteorology can use data on the ground to create a computer model that accurately predicts the conditions over the next 24 to 48 hours. But when it comes to precipitation, they have to account for so many variables that the likelihood is always reflected in a percentage. In other words, a 50% chance of rain or snow is 50-50, so the forecast is correct no matter what happens.

However, there are instances where all of the factors are in place for meteorologists to make a 100% prediction that precipitation will fall in some form. The Mid-Atlantic had a hurricane blow through last year and most people were well-prepared for the storm. But we knew what was coming and understood there was a 100% chance of heavy rain. The only question was how much.

Unfortunately, forecasting the demand for medium commercial truck tires over the past few years has been far less accurate than the weather. The biggest variable is original equipment (OE), so the continued double-digit increases in new truck and trailer orders have put tremendous strain on production capacity for every major tire company. In order to be a Tier 1 supplier for an OE truck or trailer manufacturer, there has to be a mechanism in place to ensure that finished equipment is not sitting on blocks waiting for rubber. With severe penalties for failing to deliver, it basically means that production for the replacement market is still months away from recovering, so fleets must be prepared.

The first preventive step is to communicate regularly with your manufacturers and service providers. National account status helps when you are in desperate need of tires, but local servicing dealers may be sitting on the size and type that you need. It's almost reached the point where fleets have to forecast their demand for product much like the earth-moving industry has done for years. Most large mines can project the removal dates for every tire on each piece of equipment so they can work with all of their suppliers to make sure they have enough inventory to keep operating in the near and distant future. However, managing the records for a few hundred large mining tires that never leave the site is nothing compared to the thousands of wheel positions that will have to be measured across the continent on a daily basis to make accurate projections for large motor carriers.

Given the inevitable shortages and price increases, the timing has never been better for the introduction of radio frequency identification (RFID) tags. If truck tires included RFID technology, the inventory and recordkeeping processes could be streamlined to the point where it becomes cost-effective for every fleet to collect the necessary data for reliable tire forecasts. And tire companies would at least know the aftermarket demand months in advance.