Hyundai/Kia Motors Group, the South Korean vehicle manufacturer, is implementing radio frequency identification (RFID) technology to improve the visibility of its automotive parts supply chain.

Glovis, an affiliated company of the motor group, is in charge of its automotive parts supply chain management (SCM). In March 2007, Glovis will begin receiving RFID tagged boxes of automotive parts from more than 200 suppliers to Hyundai/Kia Motors.

Using UHF global Gen2 standard RFID technology and electronic product code (EPC) standard middleware, Glovis will be able to track corrugated cardboard boxes of automotive parts through the major SCM processes, including delivery to the distribution centre, the repacking process, leaving the distribution centre, delivery to the overseas distribution centre and final delivery to Hyundai/Kia Motors’ overseas factory.

In the first phase of the project, and with the support of the South Korean Ministry of Commerce, Industry and Energy, approximately 130,000 RFID tags, supplied by specialist provider ECO, will be applied to parts boxes and packaging cases from five major suppliers for exportation to Hyundai/Kia Motors’ overseas factory in the US.

In the second phase of the project, 20 million tags will be used annually to track all boxes and containers of automotive parts through the supply chain. The project’s scope will also be broadened to include Hyundai/Kia Motors’ Slovakia factory, as well as another major manufacturing site.

Glovis had, until now, applied barcode labels with shipping marks to the parts boxes, which made it difficult to automate distribution and acquire real-time distribution information.

Mr Jin-Gi Hong, Senior Managing Director of Glovis, comments: “The RFID supply chain management system can make us a more competitive company globally. Thanks to RFID technology, we can minimise loss from dispatch errors and cut costs.”

Glovis will also offer real-time distribution information to Hyundai/Kia
Motors’ secondary suppliers, third party logistics companies and other manufacturers to optimise their inventory and production plans. With this predictable distribution information, Glovis and Hyundai/Kia will aim to cut logistics and production costs.