The Co-op Tohoku
Case of Introducing
the EPC/RFID

CO-OP TOHOKU SUNNET Consumers’
Co-operative Federation (Co-op Tohoku) is agroup of organizations that is made up of nine
co-operatives in six prefectures in the Tohoku
region, with the Miyagi COOP at its center. The
group is headquartered in Sendai, and the total
membership of its affiliated co-operatives is about
1.65 million.
Co-op Tohoku began operating a new integrated
distribution center for dry foods in September
2015. Four facilities that had previously been
operating separately were consolidated for thepurpose of streamlining the distribution functionsof Co-op Tohoku as a whole, and new systems
were put in place to resolve several issues. The
new systems include the management of thetransport equipment system using GRAI (GlobalReturnable Asset Identifier).

Measures to Counter Losses and Theftsof Transport Equipment
Previously, Co-op Tohoku’s distribution bases
were divided into four: a Food distribution center(for food), a Household goods distribution center(general goods, clothing), a Sunnet Joint
purchase Distribution center (group purchases)

and the Tohoku branch of the Japanese
Consumers’ Co-operative Union (Co-op PB). In
addition, the distribution of goods for homedelivery and for stores was operated separately.
The new distribution center was constructed toincrease the efficiency while lowering the costs.
They decided to introduce an EPC/RFID system inorder to reduce the loss of foldable containers,
cage trolleys and roll cage, and improve thedistribution management system.
The problem with the foldable containers andcage trolleys was that many were being lost orstolen. In the worst year to date, over 10 percent
were either lost or stolen in a year. The shortagesof the transport equipment lowered theoperational efficiency in the distribution center,required repeated rental costs, and incurred
additional delivery costs in order to shareequipment between stores, specifically serious
during busy periods.
They decided to manage each individual asset
rather than just looking at the total amount ofassets and installed EPC/RFID systems to identify
the place where the equipment was lost.

450,000 Pieces of Transport Equipment
Targeted
The introduction of the management system using
the EPC/RFID aimed to:
1. Improve the operational efficiency – save on
the time needed for managing the transport
equipment
2. Improve the management accuracy –understand the exactly appropriate quantityand durability of the transport equipment witha better visibility of their use
3. Improve the value of the customer service –communicate the Co-op’s latest efforts to its
members
Compared with barcodes, RFID tags can be readeven from a few meters away, when surface isdirty, or through a cover as long as the cover is
not metal. Moreover, multiple RFID tags can beread at once. By taking advantage of these points,
the total workload can be reduced.
The transport equipment involved in the system
included: 400,000 foldable containers for grouppurchases, 37,000 foldable containers for stores,
3,000 cage trolleys for group purchases, and 7,400
roll cages for stores.
There were points to consider when choosing
EPC/RFID tags for their transport equipment.
1) For budgetary and cost reasons, the company
wanted to use the same types of tag for alltransported equipment.
2) The foldable containers are washed under highpressure when returned, so the tags need to bewaterproof.
3) On-metal tags are generally used for the cagetrolleys, but these are expensive.
They overcame each issue and lowered the initialcost as much as possible by choosing waterproof
tags. By using a low-cost label, these could beapplied to a large number of foldable containers.
For cage trolleys, they decided to attach the tagson the destination board which is made of a nonmetallic material.

Reasons for Using GRAI
Co-Op Tohoku made a forward-looking decision
to use GRAI in order to uniquely identify theirtransport assets because they wanted to maketheir system compliant to open supply chainstandards. Although the new system is now onlyused for closed and in-house distribution, Co-op
Tohoku expects that the new center will be used

for joint distributions with other co-operatives andthat it will handle transport equipment managedby other companies.

Automatic Scanning When Leaving theDistribution Center
Under the current management system for thetransport equipment by using the EPC/RFID, thetags are scanned when the equipment enters andleaves the distribution center.
The process of taking the equipment out of thedistribution center became more efficient by using
an “automatic stacking device gate for thefoldable containers used for stores”.
This stacking device gate automatically scans theroll cages and the foldable containers that will betransported and links them to the information
about the delivery locations. It automatically andaccurately scans the order of the roll cages thatwill be transported one by one. A tablet placed on
the side of the gate then immediately shows thenumber of pieces of equipment that have beenscanned. When the gate cannot scan a piece ofequipment, a warning light and alarm will be set off.
The gate was made to be resistant to wear, andwith consideration to the direction of the radiowaves.
Consideration was also applied to the way inwhich the antenna would be set up and how thegate scans the equipment, to improve theaccuracy of the scanning.

Improving Trust between theDistribution Center and the Stores
Although there is no comparative data for the
newly launched center, there have been “nonvisible improvements in the distribution efficiency”
and there have been no more losses of equipment
as a result.
Particularly significant is the fact that the mutual
mistrust between the center and the stores has
been resolved by this strengthening of themanagement.
In the future, analyzing EPD/RFID data is planned.
This will help to determine the appropriatequantity of the transport equipment, and resolve
any delays in shipments due to transport
equipment shortages during busy periods, as well
as mistakes caused by the use of substituteequipment.
As stated earlier, the center began its operationsin September 2015 and was in full operation byMay 2016.

Fig. 1 Co-op Tohoku's Sunnet Federation Dry
Integrated Distribution Center

Fig. 2 Flow of the Transport Equipment
Store
Delivery to Store

Distribution Center
Circulation

Delivery to Group
Purchases

Fig. 3 C age Trolley with an EPC/RFID tag on the destination board

Delivery
Depot

Fig. 4 Scanning foldable containers

Returned foldable containers are scanned using a handscanner.
By using the same tag as that for foldable containers
instead of on-metal tags, the costs were reduced.

Towards Further Improvements inEfficiency
Among many cooperatives, Co-op Tohoku is oneof the most proactive in pursuit of advanced
measures to improve distribution efficiency. They
are considering implementing other tools in theirsystem.
One measure, which was not implemented at thistime, is a “group purchase gate”. This is a device
that scans 100 foldable containers at once, when
they are returned from delivery to grouppurchases, and controls the range to be scannedby using a moving transfer tag identification
software which can recognize the movement oftags. The gate recognizes only the foldable

containers that are moving in front of the gate,
and can even distinguish foldable containers thatare just left nearby and not to be read.
The reason why this measure is not implemented
at the present time is the cost. This issue isunavoidable for the spread of RFID. However
given the need to reduce the workload of thedistribution center staff, and considering thatlabor shortages may be a concern in the future,
the automation of the functions at the distribution
center is both likely and desirable.
“If there is a base, it is easier to proceed to thenext step.” Therefore, these challenges willcontinue to be pursued in the future.

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