Suppose an auto maker found itself in the unenviable position of having to recall tires because of a certain defect.
And suppose the defect was serious enough to cause the tire to suddenly lose its tread, blow out and cause potentially life-threatening injuries for vehicle occupants.
Without adequate information about the tires in question, an auto maker faced with such a public-safety crisis would have little choice but to recall millions of tires until the problem was isolated.
The story surely sounds familiar, as Ford Motor Co. endured two Firestone tire recalls in 2000 and 2001 that cost it $2.1 billion in net income, depleting net cash reserves by some $4.3 billion by the end of 2001.
The recalls — which totaled 20 million tires — sent Ford into an economic tailspin from which it has yet to fully recover.
In the wake of the Firestone recalls, a new technology is being tested that potentially could minimize the effects of such a massive and devastating recall, without sacrificing public safety.
The Automotive Industry Action Group, a not-for-profit trade association whose mission is to reduce cost and complexity within the automotive supply chain, has developed a standard for the use of radio-frequency identification (RFID) tags inside tires to store information that will prove valuable in the event of a recall.
The RFID tag is a tiny data-storage chip attached to a flat, thin strip of an antenna.
The component — approximately the size of a twist-tie used to bind up a garbage bag — would be embedded in the sidewall of the original-equipment tire and would hold critical information: when and where the tire was made, on which shift, how it was rated for quality, how it was made, on what vehicle it was first installed, etc.
In all, some 64 different points of data could reside on the chip.
That information is accessible with a simple scanner that needs to be placed within 5 ft. (1.5 m) of the tire. The tire itself need not be taken off the vehicle.
Currently, a simple bar code is printed on tires, but its capacity for information is limited. Plus, bar-code information only can be read. RFID tags allow data to be entered on the chip as it moves through the life-cycle of that tire, although the technical ability to do so remains a goal for the future.
Initially, the tire manufacturer and auto maker would write information on the RFID tag. But AIAG eventually wants dealers to add information as well when a vehicle comes in for service so a case history could document if and when the tires were rotated and how well the tires were maintained.
AIAG intends for the RFID standard — known as B-11 and adopted by the AIAG board of directors in October 2002 — to help auto makers detect tire problems with a level of precision never before possible in the industry.
“This is early detection, it's early warning for warranty claims,” says Andrew Cummins, AIAG executive director. “It's a great tool for that. Instead of recalling 3 million tires, perhaps we only need to recall 3,000. It helps them identify a possible production fault.”
Had RFID in tires been widely used by the auto industry prior to the summer of 2000, Cummins says the Firestone tire recall could have been much smaller for both Ford and the tire maker.
With RFID, “it would have been easy to track those tires,” he says. “They would have known everything they would need to know about them.”
Auto makers have been supportive of AIAG and the RFID standard and currently are conducting pilots with the technology. No auto maker, however, has announced implementation plans.
Although supportive of the technology, auto makers also must pay attention to cost. The current price to the OEM of $1 per tire for an RFID tag is much too high, Cummins says.
The cost of the technology is coming down. Last year, retailer Wal-Mart mandated that its suppliers use RFID for inventory tracking and for warehouse and supply-chain management.