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IBM, WhereNet Team for Auto Supply Chain

Houston, Tex.-based vehicle distributor Gulf States Toyota chose an active RFID system to get real-time visibility into its operations -- and get vehicles off the lot quicker.

IBM Global Services teamed with WhereNet, a provider of wireless location and communications systems designed for manufacturing and transportation, to let Gulf States do more with what it had. The engagement led to a partnership in which the two companies will resell the Gulf States applications, as well as develop and sell similar systems for a variety of verticals.

Gulf States processes around 190,000 cars annually, sending them on to 145 regional dealers. Staff would walk around the 84-acre lot to select cars to be sent to the various dealers, as well as to check on the status of installation of custom features requested by the buyer.

Business was good. Gulf States was on track to process more than 200,000 cars by the end of the year, with the output doubling over the next five to seven years. To handle the increase in volume, it faced the choice of building another facility of equal size or doing more with what it had.

IBM led the overall solution development and project management, bringing together the business processes and back-end integration with WhereNet's location system. It created the middleware to connect Gulf States' legacy applications with WhereNet's active RFID infrastructure. The resulting system provides real-time information on the location and status of every vehicle on the lot.

"They can look at a map, see what each dot represents, or do a query on a particular VIN number," Mahbubani said.

WhereNet's vehicle tracking and management system automated much of the process. Now, when a vehicle arrives at the processing center, it's fitted with an active RFID WhereTag that contains the vehicle identification number (VIN). While passive RFID tags have no power source and only transmit information when they come into close proximity with a reader, active tags have their own power source so they can transmit information continuously.

WhereNet's system includes 40 wireless LAN access points and 74 devices that trigger the WhereTags to emit signals as they enter or leave a zone. The system can automatically record when the vehicle arrived at the facility, how long it sat and when it shipped out. The software lets the company set business rules and system alerts, so that managers can prioritize the processing of cars.

"The technology has hidden gems," said Gary Latham, director of industry marketing for WhereNet's automotive division. Because the active tags are able to communicate data, they can pull information from a machine and send the data across the wireless signal. For example, the WhereTags can access a vehicle's diagnostics system and feed the diagnostics into the enterprise systems for analysis.

"For Gulf States, we took our location technology and combined it with our business rules engine. That allows the system to run on automatic, and lets managers deal with exceptions," Latham said.

"The heart of the system lets them move the vehicle through their process as efficiently as possible, without spending any 'dwell time,'" said Deepak Mahbubani, principal of IBM wireless e-business services, a part of IBM Global Services.

Mahbubani said that Gulf States has seen improved productivity in the form of getting vehicles off the lot more quickly, as well as more accuracy and speed in responding to customization requests. The analytics capabilities let the company optimize the vehicle mix for individual dealers. "Next, they should start to think about optimized shipping processes to extend the benefits further," he said.

According to IBM and WhereNet, Gulf States Toyota expects to realize a complete return on investment in less than one year by becoming more efficient at processing cars while reducing labor costs. The system also will help make sure that no steps are skipped and all cars are shipped with the specified detailing.

IBM and WhereNet said they would partner on engagements in a variety of verticals, including aerospace and defense, auto dealerships and manufacturing.

"IBM is a good system integrator for us," Latham said. "They have worldwide reach, which we need, and they understand our technology." In fact, according to Mahbubani, the partners began getting new business while they still were working on getting the Gulf States project up and running.