Shipcom RFID-Based Asset Tracking Saves $500,000 Annually for energy company

By tracking its new meter shipments with RFID (radio frequency identification) tags, this utility saved half a million dollars.

Integrated Solutions, September 2007
Written by: Khristen Chapin

Everyone receives energy from a utility, but do you ever think about the resources in place that help deliver and manage that energy? The pipelines, the transmission networks, and the meters all work together to provide you with energy — and all are vital assets to a utility company. Sometimes, managing those assets can be difficult, as Sempra Energy understands. To better manage and track the new meters it installs each year, this utility turned to RFID-based asset management.

Sempra Energy has the largest customer base of any energy utility company in the United States, with 5.5 million natural gas meters and 1.3 million electric meters installed. One component of Sempra Energy’s utilities division, Southern California Gas (SoCal Gas), installs more than 250,000 meters every year. A recent internal audit found that 3,300 were not billed, resulting in a cumulative loss of $1 million. “When we received meters at our main warehouse to distribute to our districts, we only knew the quantity, not the specific meters or other details,” says Dennis Enrique, project manager in Sempra’s Supply Management group. “We didn’t know how long meters were at the districts or on the trucks, contributing to meters being unaccounted for and thus unbilled.” SoCal Gas wanted to address this issue by improving the manual process of tracking meters from the manufacturer to the end customer.

RFID NON-LINE-OF-SIGHT IDEAL FOR SHIPMENT RECEIPT
SoCal Gas began investigating RFID to solve its meter tracking problems. The utility wanted a solution that could provide item-level visibility of the meter supply chain and integrate with the utility’s SAP 4.6C ERP (enterprise resource planning) system. “We knew we wanted RFID instead of bar codes because of RFID’s non-line-of-sight properties,” says Enrique. “The meters are shipped on pallets and double-stacked. We couldn’t ask our dock workers to scan the bar code on every pallet or meter. It would take far too long.”

SoCal Gas investigated several RFID solutions and eventually chose Shipcom Wireless, an RFID solutions provider, for its CATAMARAN platform, a server-based solution that captures, filters, aggregates, transforms, and routes data from multiple devices such as RFID readers and bar code scanners and integrates it directly with SAP and other enterprise systems. It also included ‘drag-and-drop’ interfaces to build business processes. The solution also involved Motorola portal readers and handheld readers at the central warehouse. The meter manufacturers shipping to SoCal Gas tag the pallets with RFID tags; they are scanned as they enter the warehouse through the portal reader. The information goes back to the utility’s SAP system, noting the specifics of each meter. Then, workers break down the pallets to prepare shipments of the appropriate meters for each district warehouse, using the handheld readers to reassign the RFID tags with the new shipment information.

When the district warehouses receive the shipments of meters, workers there use handheld RFID readers when receiving the meters. The receipt of the shipment is reconciled in the SAP system, and SoCal Gas knows exactly what meters are where.

With the RFID system in place, the utility can accurately bill for all the meters sent out and expects to recoup $500,000 annually in lost revenue. SoCal Gas plans to extend the use of the RFID tags from an asset management standpoint and is exploring using RFID readers in the inspection process to update history, meter accuracy, and other key data points.