Northern Foods, which supplies £1.4bn of convenience food a year to UK supermarkets, is redesigning its supply chain to better use the information it has gathered from deploying radio frequency identification tags on pallets.
More than 30% of Northern Foods’ sales are to Marks & Spencer, which is the UK’s largest user of RFID tags after it mandated pallet-level tagging for some 115 food suppliers in 2004.
Marks & Spencer has said that RFID has helped it control its supply chain, and Northern Foods is looking to use information derived from RFID to improve its business processes.
Stefan Barden, the food producer’s executive director, said, “We are planning to reconfigure our supply chain. We are thinking about who manages the supply chain and the information in it.”
The company needs to deliver improvements from its RFID deployment to at least recover the costs of the technology implementation, Barden said. “We are planning to recover our costs with Marks & Spencer. We sit down with our customers and say ‘how are we going to get a return on this [RFID]?’.”
In March, Marks & Spencer said that 61% of the pallets that move through its food distribution centres each week were being read by RFID scanners.
Northern Foods’ four other major customers, Asda, J Sainsbury, Morrison and Tesco, are also preparing RFID projects.
This was first published in June 2006