Social Security Administration Looks to Reduce Warehouse Labor Costs with RFID

Posted August 5, 2010

RFID and SSA's WarehouseEligible for Benefits. Limelight is not exactly the Social Security Administration’s usual operating environment. The Administration’s 65,000 employees in roughly 1,500 nationwide offices work relatively quietly helping to deliver benefit payments to some 50 million Americans and serving the general agency needs of millions more.

These days, Social Security Administration (SSA) employees go about their business under the focus of a nation trying to decide how best to steer Social Security’s future. But no matter what that future brings, people will always need help filling out benefit forms, applying for a Social Security number and navigating their way through the system. Spotlight glare or no, administration employees will continue to support the public they serve.

Such service involves millions of copies of forms and publications. The administration stores tons of this material in its main warehouse, an 80,000-square-foot supply building at SSA headquarters in Woodlawn, Md. In 2004, SSA took its own step toward changing its future by initiating a pilot program to track warehouse material wirelessly using radio frequency identification (RFID).

Early tests indicate that a full RFID tracking system could save SSA between 30 and 35 percent in labor costs in its main warehouse. SSA recently began full deployment of the pilot program throughout its main warehouse, to coincide with the rollout of its upgraded warehouse system. Eventually, the 915MHz RFID portals and portable readers will cover all three SSA warehouses in the headquarters complex.

The move came in part from dissatisfaction with manual bar-coded label scanning. John Spencer directs SSA’s Office of Supply & Warehouse Management. He saw how RFID could improve read rates by taking scanning duty out of employee hands and turning it over to an RFID portal.

“There are always problems associated with scanning,” he said. “Getting good reads didn’t occur exactly like we wanted them to. With RFID, we do expect that accuracy to improve.”

When all system components are in place, workers will no longer need to scan individual boxes of supplies as they move through the warehouse shipping and receiving docks. The main component is the RFID interrogator portal. A portable doorway lined with RFID readers, the portal acts as a tunnel through which workers drive their pallets of materials.

As forklifts pass through the portal, readers scan the RFID tags attached to cartons in a shipment. SSA readers are scanning about 45 tags per second with about 95 percent accuracy. With each scan, information about a carton travels to the warehouse management system, updating inventory counts, supply locations and other relevant details. A message board and stack light atop the portal acknowledge scans and alert forklift drivers on the status of their cargo as they pass through.

Each driver also carries a handheld mobile computer for two-way communication with the warehouse management system. The mobile computers are the same ones workers use to manually scan bar-coded labels. Such equipment familiarity makes the new system much easier to learn. Using the portal essentially comes down to pressing a slightly different sequence of buttons. “It’s just another menu option,” said Gary Orem, SSA information technology specialist.

To keep within the pilot project’s small budget, SSA project managers decided to use a single portal for both shipping and receiving duties. The problem was, however, that portal antennas that catch and transmit radio signals from the tags are normally set to detect signals coming from one direction. With only one portal, SSA workers thought they would need to retune the antennas whenever their forklifts changed direction through the portal. Instead, SSA opted for a lower-tech but easier solution: casters.

“Instead of having to adjust the antennas around whether we’re shipping or receiving, we just turn the portal around, and we’re ready to go with either function,” Orem said. Its lightness makes the portal easy to move.

The Wal-Mart Effect
Though the RFID portal is capable of scanning quickly and accurately, tags first must be in place on each carton that passes through. In the SSA receiving dock, this is not yet the case. Many boxes have traditional bar-coded labels that workers must manually scan into the system. “[RFID is] a new technology not a lot of agencies and departments have tried. And it doesn’t have a wide application yet,” said Gary Arnold, SSA associate commissioner for Publications and Logistics Management.

Use of RFID for tracking inventory, however, is increasing. The U.S. Department of Defense and Wal-Mart get a lot of credit for the burgeoning expansion of RFID technology in distribution. Their massive leverage among vendors allows them to make demands that lesser buyers cannot. And they are using it in a big way.

Smaller businesses stand to gain from changes that powerhouses like Wal-Mart set in motion. More and more vendors will begin using RFID tags in their shipments and its use will become easier for all businesses to negotiate. Meanwhile, patience helps.

“With RFID, there is a major piece called partnership with the vendors who supply various forms and publications to us,” Spencer said. “We certainly have to work with them closely in this pilot phase just to meet our objectives. It is somewhat time consuming. It’s not going to happen overnight. It takes time to build these partnerships.”

While the pilot program advances in its development, Orem, Arnold and others at SSA are looking even further into the administration’s future. Other applications for the RFID system could include asset accountability, inventory tracking within the agency and system expansion throughout the supply chain. But those decisions have not yet been made; their benefits are only potential for now.

What is more than potential is the way that the RFID system helps SSA take care of its own. “The benefit really is in serving the people in our agency who serve the public,” Arnold said. “We’re here to make sure that the people who are on the front end, the people who meet with the public in our field offices or respond on the telephone, have the tools they need.”

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