Optimizing supply chain efficiency with Xemelgo’s RFID platform built on AWS

Following multiple years of unprecedented supply chain challenges stemming from the COVID-19 pandemic, manufacturers are eagerly seeking to improve supply chain efficiency and reduce production delays. In McKinsey’s 2023 Supply Chain Pulse Survey, nearly all respondents reported seeing significant supply chain disruptions over the past year, and almost half referred to major challenges in production planning. Addressing ways to deal with these issues, McKinsey reports that there has been “a dramatic increase in the adoption of advanced techniques for supply chain planning, execution, and risk management.” Inventory management, a critical component in any successful supply chain, has traditionally been a highly manual and time-intensive process—but that’s rapidly changing.

For each item of inventory, whether it be raw materials, supplies, or finished goods, it’s necessary to know two things: the quantity available and its location. At the most basic level, those data points can be obtained by doing a manual count every quarter, month, week, or even day. Apart from being labor intensive, a manual process introduces risks relating to inventory accuracy, as manual counts are prone to error. Moreover, when relying on manual counting, data may quickly become stale in fast-paced production environments. Without an accurate, near real-time view of the supply chain, manufacturers can find it challenging to perform analysis on their data. That can lead to stockouts and line stoppages, in particular when an item’s count in an inventory location is not accurately reflected in backend systems.

The ideal solution to supply chain awareness will be one that provides continuous and accurate inventory counts in near real time while limiting resource requirements and eliminating opportunities for manual error. Such a solution will allow decision-makers to plan efficiently for future use and develop automated restocking mechanisms that prevent stockouts and line stoppages. End customers, in turn, will benefit from reduced lead times and better predictability in delivery schedules.

Advancements in Industrial Internet of Things (IIoT) smart devices—coupled with their counterparts in cloud-based solutions—have meant that manufacturers now have the ability to dramatically reduce manual effort and at the same time improve inventory visibility. The adoption of IIoT devices in production facilities is one aspect of the smart manufacturing movement. According to Deloitte, smart manufacturing initiatives have the potential to improve asset efficiency by 20 percent, product quality by 30 percent, and sustainability by 10 percent, all while reducing costs by 30 percent.

One such smart manufacturing solution, offered by Xemelgo and built on Amazon Web Services (AWS), uses RFID tags to automate the tracking of inventory. These RFID tags are passive transponders that come in multiple small, inexpensive form factors and can be readily attached to materials by sticker or zip tie. When the tags are activated by an RFID reader, they respond with a unique identification code. The reader devices in this solution are IIoT connected, so that when an inventory item is placed in, or removed from, a location monitored by an RFID reader, its status is automatically updated in Xemelgo’s inventory platform. In this way, decision-makers are continually made aware of their inventory’s location and quantity.

Xemelgo RFID inventory management on AWS

Behind the straightforward hardware setup and accessible cloud dashboard, which provides inventory data in near real time, several AWS services work in concert to support the Xemelgo device client.

1. IIoT RFID sensor running Xemelgo Edge These RFID sensors are the functional parts of the RFID readers that are deployed to the field. They may be stationary devices that monitor items entering or leaving a room, sensors located on a supply shelf, or mobile devices carried by personnel between work stations. As an RFID-tagged item comes into proximity with a reader, the unique identification code is sent to the cloud.

“Xemelgo is sensor agnostic, meaning that we can work with any hardware vendor. We saw the market need for a sensor-fusion solution, and built Xemelgo with this in mind from day one.” —Francis Wu, Director of Engineering, Xemelgo

2. AWS IoT Core, which empowers companies to connect billions of IoT devices and route trillions of messages to AWS services without managing infrastructure, ingests sensor data via Message Queuing Telemetry Transport (MQTT). Data from the RFID sensors is transmitted to the AWS Cloud via AWS IoT Core using the MQTT protocol, which is ideal for large-scale IoT deployments due to its efficiency in resource-limited devices and low-bandwidth environments.
3. Rules for AWS IoT, which give devices the ability to interact with AWS services and route messages to downstream services. AWS IoT Rules are a feature of AWS IoT Core. The AWS IoT rules engine facilitates the routing of MQTT messages to other AWS services. In this solution, AWS IoT rules are used to trigger functions in AWS Lambda—a compute service that runs code in response to events—which then perform additional processing.
4. Amazon Timestream, which offers fully managed, purpose-built, time-series database engines, is used for time-series data storage. Xemelgo uses Amazon Timestream, a purpose-built AWS database that is ideal for tracking inventory as it moves throughout a facility, helping make sure that data is stored efficiently and can be accessed quickly.
5. AWS API Gateway, a fully managed service that makes it easy for developers to create, publish, maintain, monitor, and secure APIs at any scale, and AWS AppSync, which connects apps to data and events with secure, serverless, and performant GraphQL and Pub/Sub APIs, connect the client’s frontend to the AWS Cloud. Both of these solutions are serverless services that simplify application development.
6. Desktop and mobile clients run the Xemelgo client This is the frontend user interface, from which a customer is able to visually monitor their inventory and receive alerts.

The combination of Xemelgo and AWS services offers a secure, scalable, and resilient way of automating the collection and monitoring of inventory data. Customer data is encrypted throughout all stages of its journey on the Xemelgo platform. Whether you are tracking a handful of inventory items or millions of inventory items, your customer experience is the same and provides the same end benefits: simple inventory management, time savings, and more informed decision-making. Equally important, this solution is reliable. Xemelgo has chosen to use multiple serverless AWS services to support its platform. These services are implemented with redundant infrastructure under the hood for high availability.

Hisco’s success with Xemelgo’s grab-and-go RFID inventory solution

As a leader in industrial distribution and vendor-managed inventory (VMI) services, Hisco faced significant hurdles in maintaining accurate inventory data across multiple customer sites. The manual processes required for inventory management were not only labor-intensive but also prone to errors, leading to operational inefficiencies and production delays. To better serve its customers and streamline operations, Hisco needed a solution that could provide near real-time visibility and accurate tracking of inventory while reducing its manual workload.

Hisco partnered with Xemelgo to develop a cutting-edge, RFID-powered VMI solution. This innovative system was designed to replace manual cycle counting and manual inventory management practices with a near real-time tracking platform that helps keep backend systems accurate, significantly boosting inventory management efficiency.

The solution uses low-cost RFID tags attached to inventory items—such as tubes of sealant or boxes of gloves—at Hisco’s central distribution facilities. These tagged items are then monitored using RFID readers at customer sites, automating virtually the entire tracking process. Using handheld scanners, Hisco’s team can audit an entire stockroom with thousands of items in just minutes, while also being able to locate missing or expired items, which helps with compliance. The system provides near real-time alerts to both Hisco’s team and its customers, sending notifications when items require replenishment.

Hisco’s RFID-powered VMI solution is designed for rapid deployment, with installations typically completed within a single day. That level of efficiency empowers new customers to quickly benefit from the system’s capabilities, drastically reducing the time and resources traditionally required for manual inventory management.

The deployment of Xemelgo’s RFID solution has revolutionized Hisco’s inventory management approach. Now operational in over 50 locations across North America, with more than 100 RFID readers in use, the system has led to an impressive 85 percent reduction in the time required for weekly inventory cycle counts and annual audits—a boost in efficiency that has translated into millions of dollars in annual savings.

“By using Xemelgo’s RFID-powered VMI solution, we’ve transformed our inventory management process, achieving near real-time visibility and dramatically reduced manual overhead. This partnership has not only enhanced our operational efficiency but also strengthened our ability to better serve our customers and secure new business.” —Greg Smith, Vice President of National Accounts, Hisco

Apart from improvements in Hisco’s internal operations, Hisco’s customers have also experienced significant benefits, including minimized downtime and reduced risk of material stockouts and compliance issues related to expired materials. The success of this RFID-powered VMI solution has inspired several of Hisco’s customers to adopt Xemelgo’s broader Smart Factory solutions. These customers are now extending the advantages beyond inventory management to other critical areas of their operations, including work-in-progress (WIP) tracking for managing work orders and asset tracking for overseeing equipment and tools.

Conclusion

Xemelgo’s RFID inventory management solution built on AWS offers time savings, reliability, and improved decision making. It answers the question, “what inventory do we have on hand, and where is it right now?”—and does it in a way that is more timely, accurate, and cost-effective than traditional approaches. The solution’s device-agnostic design also facilitates greater flexibility of implementation. The AWS services chosen to build the platform offer security, reliability, and cost-efficiency. You can learn more about Xemelgo’s inventory management solution on AWS Marketplace.

Looking at the big picture, implementing a cloud-based RFID-tagging inventory system has the potential to significantly reduce supply chain disruptions and delays. Unexpected stockouts and production line stoppages have an amplified impact on downstream timelines. Accurate production forecasting relies on precise inventory knowledge. Historically, that required a tradeoff between timeliness and the expense of data collection. Xemelgo’s solution offers a way of maintaining cost-effective, accurate inventory data in near real-time.