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OM in the News: RFID and Luggage Tracking

August 26, 2016
Radio chips are embedded in the tags being used at Las Vegas' airport ensure that suitcases move more quickly and accurately through the system.

Radio chips are embedded in the tags being used at Las Vegas’ airport ensure that suitcases move more quickly and accurately through the system.

One of my favorite new video cases for this edition is called Alaska Airlines: 20-Minute Baggage Process–Guaranteed! in Chapter 7. This is great example of process analysis and how OM can be applied in a way to improve customer service in the airline industry.  And industry-wide, airlines show a steadily decreasing likelihood of bags going astray. Last year had the lowest rate of wayward luggage — 6.5 bags per 1,000 — in the past 12 years. Why?

Various advances in technology and bag-handling procedures deserve credit, including improvements over the years in the bar-coded tags and optical scanners that have long been in use for identifying and sorting checked luggage. Where bar-coded tags fall short is if the tag is wrinkled, smudged or torn, or not in line of sight of the scanner. If the tag is not readable, the bag can get lost without being noticed. Bar code readers have a “read rate” of only 80%- 95% of baggage tags.

“That is why the industry is intent on improving the tracking rate by looking beyond the 30-year-old baggage bar code,” writes The New York Times (Aug.23, 2016). They are adopting RFID tags that do not need to be seen to be read. Embedded chips can store travel information and need to be only close to radio scanners along the way for the bag’s progress to be recorded. Fliers can use travel apps to keep track of their bags. Delta is spending $50 million on the necessary scanners, printers and radio tags, which look little different from conventional bar-code tags. The system is now in place at all of the 344 airports into which Delta flies.

R.F.I.D. technology is hardly new, of course. But updating to the latest technology requires infrastructure changes that can be expensive and disruptive. And because most airports leave it to each airline to handle its own bag-checking system, the technology and procedures vary widely.

Classroom discussion questions:

  1. What are the advantages of RFID over bar codes?
  2. What does Alaska Air do to make sure bags arrive in 20 minutes?
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