Featured Story
Orange reveals 6G disconnect between telcos and their suppliers
Some of the biggest vendors are still wedded to the idea that innovation must come through hardware, complains Orange's Laurent Leboucher.
From brewery to pub, asset manager TrenStar maximizes beer keg management
March 8, 2006
"We're not a technology company -- we're an asset-management company," says David Adams, senior vice president for corporate strategy and technology at Denver-based TrenStar. "That may be why we've been so successful at deploying RFID: We're starting with the end-use in mind, not the technology."
Trenstar manages many different kinds of assets, from healthcare equipment to synthetic rubber cargo containers. But its main business lies in one of the oldest industries in the world: brewing.
Beer has been brewed since at least the days of the ancient Sumerian empire, and only recently has it been transported in metal kegs. And in just the last few years, tracking those kegs using RFID technology has become a thriving business, thanks largely to TrenStar. (See RFID's Time Has Come.)
Founded in 2001, TrenStar combines a sophisticated software rules engine, which decides how best to redeploy an empty beer keg, with RFID tags and handheld readers to manage its "fleet" of hundreds of thousands of kegs. The "King of Kegs" in the United Kingdom, TrenStar now owns 70 percent of U.K. kegs, Adams says. The business model is simple: You brew the beer. We supply and manage the kegs.
"Our proposition is, we go into a company like Coors and say, 'Let us buy your kegs, and we'll make them work harder than you can,' " explains Adams.
From Prada to the pub
TrenStar acquired in-house wireless ID technology when it bought U.K. firm Kings Technology Partners, which had been responsible for some of the most visible early-adopter RFID projects, including Prada stores and the bag-tag system at London's Heathrow airport. The system tracks kegs from warehouse to brewer to pub, monitoring every "state-change" along the way, and automatically determines what to do next with the keg. The brewer, who buys software from TrenStar based on the number of kegs it uses monthly, can use a password-protected Web interface to monitor the kegs as they bring joy to pubgoers across the land.
"You can look at it from the performance of the whole fleet, to a given filling facility, right down to a unique keg," says Adams. "How many times that keg has been filled, when it was delivered, how long it takes to get back, what it's carrying, and so on. It provides a level of granularity that had been missing."
The efficiencies and cost-savings the TrenStar keg management system have brought to big U.K. brewers is tremendous, but there was more than one level of resistance at the outset, says Adams. Pub managers thought the RFID tags (typically readable from 18 inches max) would spy on them and their customers. And the draymen -- the delivery-truck guys -- had even fiercer concerns. After testing its early custom handheld readers, developed in conjunction with Symbol Technologies Inc. (NYSE: SBL), thousands of times, TrenStar discovered that they would often fail after just one day in the field. A little sleuthing revealed that the draymen were stopping in pubs and gas stations and microwaving the tags.
"How long do you have to put an RFID tag in a microwave till it's done?" asks Adams. "About 10 seconds."
More education at the pub and the depot at the outset of deployment would solve that problem, Adams adds. "In any business-process change, it isn't the engineering of the process that's hard; it's the people-math interface. You can engineer the perfect solution but managing that interface, that's where the magic takes place."
Adams declines to specify annual revenues for TrenStar but says they've multiplied by 32 times in the last four years. TrenStar subsidiary MicroStar, meanwhile, which manages 400,000 kegs for 140 small craft brewers in the U.S., has enjoyed similar growth, without using RFID technology. MicroStar, says director of North American operations David Webster, still manages its assets the old-fashioned way: "The brewers push paper our way." (MicroStar kegs are equipped with barcode labels, but that's mostly for the company's in-house inventory, rather than for logistics and tracking.)
New verticals
The deployment of RFID for keg management in the U.S. has been slowed by the requirement that wholesalers pay a deposit on each keg; but with costs for both stainless steel and transport, it's inevitable in the next 12-24 months, Webster believes.
"It's becoming more critical that something be done in the U.S. market on RFID," he adds, "not just for beer kegs but for all movable assets."
The cost will not be insignificant. While the price of RFID tags is declining, they still cost as much as $7 per tag. Four hundred thousand kegs at, say, five bucks a keg is $2 million, and that's for the tags alone -- not counting readers, software, training, and so on.
While beer remains the staple for both MicroStar and its parent TrenStar, other vertical markets are opening up rapidly, including healthcare, where the timely delivery of an asset can mean life or death, not just a refreshing beverage with your fish and chips. Adams rattles off a few criteria for industries that make sense for RFID deployments.
"It has to be an industry where competitors use a common container or item across the supply chain," he says. "And the items have to have long lifespans and be relatively expensive to track and exploit."
And it helps if they weigh in the neighborhood of 160 pounds -- the weight of a full 15.5-gallon keg of beer.
— Richard Martin, Senior Editor, Unstrung
You May Also Like