This document summarizes a bachelor's thesis that investigated the potential benefits of utilizing RFID technology at Skanska Maskin AB, a Swedish construction equipment manufacturer, seller, and renter. The thesis used a case study approach and Soft Systems Methodology to analyze Skanska Maskin AB's existing barcode-based system and conceptualize a future RFID system. Interviews and observations were conducted to understand the current system and gather requirements. The thesis aimed to identify benefits the RFID system could provide over the barcode system for functions like renting, selling, repairing, and recycling equipment. The findings were intended to help Skanska Maskin AB determine if implementing RFID technology would be worthwhile.
1. Software Engineering and Management Bachelor Thesis
IT University of Gothenburg, Spring 2008
REPORT NO. 2008:076
ISSN: 1651-4769
Department of Applied Information Technology
Finding Benefits of Utilizing RFID Technology
in Skanska Maskin AB
MALLAWARACHCHIGE DON SISIRA KUMARA
NIHAL SIRIWARDANAGEA
IT University of Göteborg
Chalmers University of Technology and University of Gothenburg
Göteborg, Sweden 2008
2. Finding Benefits of Utilizing RFID Technology
in Skanska Maskin AB
Software Engineering and Management Bachelor Thesis
IT University of Gothenburg, Spring 2008
Sisira Kumara Mallawarachchige Don Nihal Siriwardanagea
IT University of Gothenburg IT University of Gothenburg
Sweden Sweden
e-mail: sisira@ituniv.se; siskum@gmail.com e-mail: nihal@ituniv.se; nihal.edu@gmail.com
technology based item identification system at
Abstract: In this paper, we discuss benefits of RFID
their warehouse and they want to change the
technology that Skanska Maskin AB at Linnarhult
Gothenburg in Sweden has planed to utilize in the existing system with Radio Frequency
future. We used case study methodology in this Identification (RFID) technology. They have
research to find benefits of RFID at Skanska Maskin uncertainty which benefits they can achieve by
AB. We gathered qualitative data from the present using this RFID technology at their premises. Our
system by using mediating tools such as observation
research goal is to find out possible benefits of
and interviews. We compared present barcode system
future RFID system at Skanska Maskin AB over
with proposed future RFID system to see the benefits
the present barcode system. RFID technology
and effects of the RFID technology. The store
allows in supply chain management to identify
environment of Skanska Maskin AB is more complex
store items with an item reader which is similar to
and difficult to manage. We used Soft System
the barcode item identification. The present
Methodology (SSM) to analyze and identify both
present barcode and future RFID systems in such a barcode system at Skanska Maskin AB allows the
complex and messy situation. SSM uses “systems barcode reader to communicate with the renting
thinking” in learning and reflection to help understand item’s barcode once both are in the visual contact
the various perceptions come from minds of different range. This system works fine except some
people who involved in the problem situation. The SSM
physical limitations such as the durability and
considers the importance of cultural, social and
visibility of the barcode tag once the items return
political attributes in the present system. We discussed
back from the customer.
the results of system comparison illustrating the benefit
of future RFID system.
Our goal was to find benefit of RFID technology
Key words: RFID Technology; Benefits of RFID; Soft
by comparing the present existing barcode system
System Methodology (SSM); Use Case Modeling
and the possible future RFID system. In order to
(UML); Warehouse Management; Skanska Maskin AB,
identify these two systems we have considered the
Bar code, Organizational Change.
factors such as system-interactions, technological
1. Introduction implementations cultural and political changes in
the present and future systems in Skanska Maskin
Skanska Maskin AB is a leading company selling
AB. The main actor involve in this research was
and renting construction items all over Sweden.
Skanska Maskin AB as the manufacturer, seller
They manufacture and repair items as well as
and renter of construction items. Customers are
recycle unusable items. They used barcode
3. results from the data analysis from future RFID
the typical construction companies and the
system at Skanska Maskin AB. Further more it
individuals who rent the item from Skanska
has been discussed the previous studies, why they
Maskin AB. We have classified the benefits from
are important, the relationship to other researches
implementation of the RFID technology such as
and suggestions for the future RFID system. The
using RFID tag, tag readers, automated data/item
research procedure did not calculate any cost of
handling and network connections. In the
RFID implementation. The analysis of future
following chapters of this article we have
RFID system was totally based on the other
discussed in detail how we have identified the
research have being done on this field and
existing system and the future RFID implemented
published. The research has concluded with
system at Skanska Maskin AB. We have used
generalizing and recapitulating the research work.
“Case Study” as the research method and we used
it for careful study of the contents and
2. Related Research
longitudinal examination of item handling at
Skanska Maskin AB. The mediating tools In our research, it has been found in many
interview, field visits, observation and Soft literatures that Radio Frequency Identification
System Methodology (SSM) used to identify the (RFID) technology (in section 2.1.) and Soft
present system and the future system with RFID System Methodology (SSM) (in section 2.2.) have
in a systematic way. applied in different organizational context. The
literatures have based on online resources,
The data gathering with regards to items renting, industry web sites, whitepapers, journals and press
returning, and repairing function have been done releases.
using above mentioned mediating tools.
2.1. RFID Technology
According to the gathered data we have identified
the present and the future system. We have used Radio Frequency IDentification (RFID) is a
SSM to create “rich picture”, root definition and technology that uses radio waves to uniquely
the “conceptual model” of the existing system. identify items. RFID interrogator (reader)
The system documentations domain model, use generates electromagnetic waves and activates the
cases, system interaction diagrams created in RFID tag. The interrogator converts the radio
using Unified Modeling Language (UML). The waves into digital information and sends to
results of systems identification led to the middle ware computer (Controller) to analyze the
comparisons of system functions renting, selling, data [1]. There are two types of RFID tags which
repairing and recycling. The results of these are active and passive [1 p80-100]. RFID offers a
comparisons created the benefits of the future possible alternative to auto-ID technologies
system. The research question is, Skanska Maskin include bar codes, optical character readers and
AB wants to implement RFID technology at there biometric identification [2].
warehouse. They want to know that are there It was perceived that the RFID technology were
benefits from RFID technology over the present commonly used not only in Supply Chain
barcode system? Management (SCM) and other organizational
This article has organized with literature review environment such as libraries, retail shops, airline
which has included facts from related RFID services, personal identifications, hotel industry,
implementation studies. The Method section mobile asset management in office. SCM is the
discusses the way we have conducted our research “management and control of all materials and
and what methodology we have used, why and information in the logistics process from
how it has used. The discussion section analyses acquisition of raw materials to delivery to the end
4. adoption of new technology. The traditional
user” [4]. K. Michael and L. McCathie at
system design approach is UML is envisioned and
University of Wollongong has found data from
it does not consider the social, political and
numerous resources that many benefits had gained
cultural aspects of the problem situation in the
different organizations by using RFID technology
organization. The SSM is considered the various
such that non-line-of-sight item, labor reduction,
percepts come from minds of all actors who
enhance visibility, asset tracking, accuracy of item
involve in the organization process when solving
level tracking and tracing, reliability, improved
the problem. Considering the above facts we
inventory management and security.
chose Soft System Methodology to analysis the
METRO Group, the world’s third-largest retailer, present and future system changers at Skanska
attracted a lot of attention when it announced Machine AB with RFID. Chapter 3 has provided
plans to use RFID throughout its supply chain and more detail description of particular methodology
for numerous applications at its famous Future in practical use for RFID system in Skanska
Store in Rheinberg, Germany [5]. Since then, it Maskin AB.
has gotten something much more beneficial from
its RFID efforts: results. Helped by the Within systems thinking there are two
performance of RFID readers from Intermec complementary traditions such as “Hard system”
Technologies Corp., METRO Group is reaping and “Soft system”. Influenced by control and
information theory, hard systems are involving
the time savings, labor reductions and inventory
simulations, often using computers and the
benefits it hoped for when it began testing RFID.
techniques of operations research. Soft systems
Encouraged by its system performance and real-
represent a reaction to the inability of hard
world benefits, the retailer has gone beyond pilot
systems to adequately respond to real world
phase and has gone live with RFID in its own
problems [8]. Malaysian Public Institution of
daily supply chain operations [5]. US Air Force
Higher Education has formulated knowledge
Research Laboratory has done research project of
management system using SSM. They used
RFID in their supply chain management. Final
combination of technical (Hard) and non-technical
project report result has illuminated that
(Soft) issues business process and they considered
utilization of RFID was experienced the benefits
human activities within the organization to
of improvement inventory management, improve
formulate system [17]. Soft systems methodology
labor productivity, eliminate duplicate order,
is in the analysis of complex situations where
replaces manual procedures, automate receipt and
there are divergent views about the definition of
acceptance, improve shipment visibility
the problem – “Soft problem”[8]. In other way
management, improve asset tracking, reduce
SSM is an approach to organizational process
shrinkage and enhance business process [6].
modeling and it can be used both for general
United Parcel Services inc., the world leading problem solving and in the organizational change
fright forwarder had proved that perceived [8]. SSM has seven stages process (several
benefits of RFID had gained over barcode after iterations are needed, see Figure 1).
implementation of RFID technology [7]. World
Stage 1: Investigate unstructured problem
leading retailer Wall Mart is the first successive
situation - within the real-world frame of
customer gain benefit from RFID technology in
thinking. A significant amount of information
supply chain management on above mention area.
needs to be collected (e.g., organizational history,
culture, structure, types and number of
2.2. Soft System Methodology
stakeholders, their perspectives and assumptions)
There are number of methodologies exist to
[9]. In the case study of Manchester Metropolitan
investigate the organizational changers due to
5. the system to be modeled. Root definitions often
University (MMU) accommodation problem was
follow the form: A system to do P, by (means of)
done by Jeremy Rose [12] gathered data from
Q, in order to R telling us what the system will
various actors to analyze the problem situation.
The actors were student, accommodation office do, how it is to be done, and why it is being done
staff, landlords and IT staff. (its longer-term goals) [11], [12]. There are six
components that make well formulated root
definition which call CATWOE (Table 1x).
Referring to Jeremy Rose [12] root definition
described MMU a system that produced qualified
candidates for potential employers. Qualified
candidates (X), by means of suitable assessment
(Y) in order to demonstrate the capabilities of
candidates to potential employers (Z).
Table 1: Six components of root definition [12]
Component Meaning
The beneficiaries or victims of a
Customer
Figure 1: Soft System Methodology Seven Stage [13].
system
The agents who carry out, or
Actor
Stage 2: Express the problem situation – This
cause to be carried out, the main
rich picture describes the structure and processes
activities of the system
of the organization and the environment in which
Transformation The process by which defined
it operates. The structure of rich picture is consist
inputs are transformed into
with physical layout, hierarchy, reporting defined outputs
structure, and the patterns of communication, A viewpoint, framework, image
Worldview
formal and informal. By process is meant the or purpose, which makes a
particular root definition
organization’s basic activities (i.e., resource
meaningful
allocation, deployment, monitoring, and control).
Those who own a system (have
Owner
The relation between structure and process should
the power to close it down)
illustrate the problems, tasks, and elements of the
Influences external to a system
Environment
environment in a way that is easy to understand. It that affect its operation
should identify relevant themes, develop a shared
understanding of different perspectives, and be a The transformation process is the core of the root
basis for further discussion [10]. Referring to definition, which transforms inputs into outputs.
Jeremy Rose [12] accommodation problem, the The transformation process is evaluated by three
rich picture shows different communication of (Es) criteria [11]. These criteria’s are:
accommodation office with full of paper works, E1-Efficacy or checking that the output is
competition over beds and perception of students produced;
and landlords. E2-Efficiency or checking that the minimum and
necessary resources being used to obtain it;
Step 3: Root definition of relevant system - At E3-Effectiveness or checking that the
this point change from “Real world thinking” to transformation process is worth doing to attain the
“Systems thinking”. Root definitions are written longer-term goals related to the outputs; these
as sentences that elaborate transformation. It is a three criteria can be extended as:
short textual definition of the aims and means of
6. using SSM. The SSM has been well-liked with
E4-Ethicality or checking that transformation is
many organizations to address their different type
morally ethical;
of contextual organizational problem. This
E5-Elegance or checking that transformation is an
document has referenced number of research
aesthetically pleasing;
documents and white papers on such real world
Stage 4: Building conceptual model(s) - case studies. Jeremy Rose, Department of BIT, the
Conceptual models demonstrate potential Manchester Metropolitan University, UK has
activities and their logical dependencies. It is addressed issues of university accommodation of
based on the agreed root definitions in stage 3 of students by using SSM (accommodation office
the desired system and is measured against the has meshed with paperwork and solution was
three Es criteria mentioned in stage 3 [9]. computerization) as well as improve the efficacy,
efficiency and effectiveness of the university
Stage 5: Comparing the conceptual model(s) education system [12].
with the real world problem situation - The
conceptual model identifies which activities need 3. Methodology
to be included in that particular real world In this chapter in section 3.1 discusses in details
situation. It is not concerned with how these who and what stakeholders, what people are and
activities will be carried out. The conceptual technology use by them. In the section 3.2
model will be compared with the real world to provides information how we elicits user
highlight possible changes in the real world [9]. requirements and data gathering. In section 3.3
At this stage it is easy to trace activities which are presents that practical usage of SSM for future
inadequately done or not done at all, and make RFID system in Skanska Maskin AB warehouse.
recommendations for improvements [12]. This
comparison will direct to proposals for real-world 3.1. Case Description
improvements based on the logic of the This section briefly describes about what is
conceptual model. Skanska AB, Skanska IT Solution AB and the
Skanska Maskin AB. Further more it expresses
Stage 6: Determining desirable and feasible people and their roles and responsibilities and
changes - The activities in the conceptual model current technology they use.
do not exist in the real world. This would then be
a recommendation for change. The aim of this 3.1.1 Skanska AB
stage is to identify and to explore change that is In 1887 Skanska AB was founded. It is
systemically desirable and culturally feasible [9]. internationally well recognized world leading
construction and project Development Company.
Stage 7: Action to improve the problem It is one of the world’s ten largest construction
situation - Changers of real world problem companies. Skanska AB is a fortune 500 company
situation will be implemented. After and a member of the UN Global Compact. Their
implementation taken place the problem situation business role is constructing and developing
will be changed. The iterative process cycle offices, homes, roads and public-private
reduces the remaining statics (problems) [9]. partnership projects all over the world from small
scale to massive complex once. Skanska AB is not
In our literature study, we have found many only aim for company profit but also they wants
research papers which has addressed many issues to be a leader in quality, green construction, work
of different type of organizational contextual by safety and business ethics. There are 60,000
7. It is challenging to Skanska Maskin AB staff to
employees actively working in Europe, USA, and
keep track and store large quantity of many
Latin America in their project sites and offices.
different type of items in their warehouse.
Skanska AB is the mother company and it has
sister companies; Skanska IT-Solutions and
Skanska Maskin AB. 3.1.2. Technology
Skanska IT-Solutions is a sister company of Skanska IT-Solutions AB is fully responsible for
Skanska AB. It is offering services and providing and suggesting IT solutions for their
own subsidiary companies. Technical Director1 is
technology-intensive functions in the field of IT to
companies in the Skanska group. Skanska IT- one of key personal in Skanska IT-Solutions holds
Solutions mission is to provide high-quality, cost- major role in data communication and data
effective IT services to support Skanska’s warehousing of Skanska AB. He addresses many
business objectives and operations. issues of information technology related such as
data security and adopting new technology to
Skanska Maskin AB is also sister company of
subsidiary company of Skanska AB. Senior
Skanska AB and locates in three different
System Analyst2, Specialist Working with
geographical location Stockholm, Malmo and
Business System (CapMan) is one of key
Gothenburg in Sweden. Skanska Maskin AB
hierarchy of Skanska International AB holds
enrolled with business of
major role in developing system applications to
subsidiary company of Skanska AB. IT-Data
-selling and renting building and construction
Manager3 is head of the department and holds
item, accessories and consumable items
major role in IT-Department in Skanska Maskin
When customer requires rent or buying
AB. He has taken control all IT related matters
construction items, he/she comes to sales
such as project planning, implementation and
counter at Skanska Maskin AB or contact
change management. There are number of
sales representative or contact through
employees working under him, among them,
telephone after referring catalogs. Sales
System Analyst/Programmer 4,5 is one of key
representative check the item availability and
category who holds total responsibilities of
prepare an order then sends it to issuing staff
Inventory Registry Information System (IRIS) and
at warehouse. Customer collects ordered
innovate new methods and techniques to improve
items from the warehouse or Skanska Maskin
warehouse application system. Skanska Maskin
AB delivers the order items to the respective
AB warehouse operational functions have taken
customer.
control by IRIS application. The IRIS system has
- repairing and recycling defected items
especially designed and developed for Skanska
Once rented item returning to warehouse it is
Maskin AB for the purpose of data warehousing
accepted and checked working condition by
of rent and sale items, stock and finance
receiving staff. If the item is not usable and
controlling, auditing and generate reports,
repairable sends to repair. If the item is not
receiving and storing items from local and foreign
usable and not repairable then it sends to
recycling.
- manufacturing construction items 1
Conny Roll:
If item needs to be manufactured demand of http://www.itsolutions.skanska.se/skanska/templates/page____333.aspx
2
Lars Gustafsson:
customer requirement or a new requirement http://www.projectsupport.skanska.com/files/documents/Newsletters/Newslette
r_April_2008.pdf
comes from customer then new items 3
Lars-Erik Johansson: http://www.excellent.se/pdf/skanska_ref.pdf
manufacture. 4
Per Fagerberg: http://uk.mywebster.dk/news/skanska-maskin-ab.aspx
5
Kristian Thisted:
http://www.maskin.skanska.se/files/Nyheter/VaLinFo/VaLinFo05-1.pdf
8. selling, renting, repairing, manufacturing and
vendors and tagging bar code to items for easy
recycling happen of Skanska Maskin AB
identification. After bar coding locate items in
warehouse.
right place in the warehouse. When items sale or
rent that has recorded in IRIS system.
The first day of field visit we gathered data from
Recently warehouse staffs use hand held computer
observation and interviews. The interview has
as a mobile device for material issuance and
been responded by IT Manager and two System
inventory updates. The hand held computer
Analyst/Programmers. They explained us IT
behaves as bar code reader as well as mobile
involvement of typical store functions. The
computer. Still they have unsolved problems
barcode functionalities had limitations depending
when issuing item like Scaffolding, concrete
on the type, amount, and way of storing. The bar
mixers, repaired items which unable to attached
code system worked fine with them for selected
barcode on them. Scaffolding and concrete mixers
item. They manufactured the bar codes on hard
can not be tagged barcodes because which may
plastic which was durable for field use. They used
easily get damaged on filed use. And also the
two different colored bar codes for easily identify
same bar code can not use for item which is to be
defect and repaired item. They presented and
repaired and repaired done.
explained tracking the item history and report
3.2. Data Sources generating. It was demonstrated that how data
IT responsible personal of Skanska IT-Solutions transmitted from barcode reader or hand held
and Maskin AB want to look forward to computer to IRIS system. System Analysts
implement RFID technology in their warehouse discussed with us and explained that various
and they want to know that does it creates attempt to improve the bar code item handling
benefits? We contacted Skanska IT-Solution and system with hand held computers. There were few
we got this requirement. After receiving the handheld computers which enable to gather and
requirement document from stakeholder, we process bar code data.
prepared project scope for finding benefits of
future RFID system. We used Case-study as the We observed that the management of Skanska
research methodology which facilitates us to Maskin AB had an uncertainty of achieving
gather, analyze and conclude the data. We did benefits of RFID technology over existing
interviews with the Skanska Maskin AB barcode system. There were many other issues
management and gathered data. We observed all that they wanted to solve such that consuming
the store functions, how it happen who engage much time for item issuing, receiving, stock
with each action, how technology involve in taking and high labor cost with current bar code
gathering the item transaction data that we used to system. When issuing and receiving item like
identify the systems. Scaffolding and concrete mixers had complex
One month later we had a meeting with the situation. They had difficulties of identifying
stakeholder upon our request. Our aim was to item/machinery between defected and repaired.
investigate the context of Skanska Maskin AB Stock differences appeared between system and
warehouse therefore we followed number of steps physical stock (item gone missing). Impossible of
to gather qualitative and quantitative data. We did tracking and tracing rented items (lost and theft).
two semi-structured interview with key personal They wanted to address on above issues from
like IT Manager and System Analyst/ RFID and also expecting quality, accuracy,
Programmers. After interviewing we visited efficiency, effective services from RFID
warehouse and observed, how the store function technology. We created domain model, Use case
9. suitability shows that SSM is a best methodology
scenarios and high level sequence diagrams for
to use in this research.
typical stores functions based on empirical data
which we gathered. We created use case scenarios Stage 1: Unstructured Problem Situation:
Skanska Maskin AB wants to adapt for new auto-
for customer’s order item, rent item, sale item,
ID technology to overcome limitations of barcode
manufacture item, repair item and return item.
technology. They have doubt about the benefits of
RFID technology over existing barcode system.
3.3. Proposing RFID system using SSM
Not only that there are many issues to address
Referring to literature [17], the SSM can address
such as consuming much time for issuing,
many issues of change management. Due to the
receiving, stock taking items and high labor cost
present system transformation to the future system
for item handling with current bar code system.
at Skanska Maskin AB there exist number of
When issuing and receiving item like Scaffolding
organizational changers such as change the
and concrete mixers there exist complex
operation structure, reduce labor involvement, and
situations. Having difficulties of identifying
item handling automation. Using the SSM is the
item/machinery between defected and repaired
best way to handle them. Hence we have used
once. Stock differences have appeared between
SSM to find out benefits of RFID system in
system and physical stock (item gone missing).
Skanska Maskin AB. The SSM have addressed
Impossible of tracking and tracing rented items
considering the real world context to create the
(lost and theft).
solution avoid the envisioned UML approach
[13] [20]. The process of achieving the research
Stage 2: Express the problem situation - Then
goal has been identified two systems of Skanska
we analyze and express the problem situation by
Maskin AB which are present Barcode system and
drawing a rich picture (See Appendix B) which is
future RFID system. Stage 1 and 2 of SSM has
a kind of diagrammatic representation of Skanska
addressed in detail the present system and stage 4
Maskin AB warehouse operations. The picture
of SSM has addressed Conceptual model address
capturing much information relating to problem
the future system. The present to future system
situation and also show boundaries, structure,
transformation has been effectively addressed by
information flows and communication channel
Root definition of CATWOE in stage 3. The
which related to human activity in Skanska
system transformation at Skanska Maskin AB
Maskin AB. It is way of presenting problem
creates social, political and environment changers
which affect on the company. The 7th stage of situation which differs from traditional Unified
Modeling Language (UML) sequential diagrams
SSM discusses how to handle such organization
or class diagrams.
issues until it reach to stable solutions. All above
10. Figure 01: Rich picture of problem situation of existing system in Skanska Maskin AB.
This rich picture has expressed present problem Step 3: Root definition of relevant system - By
existing system. The view from the Skanska using this rich picture, we define the root
Maskin AB IT manager expects a profit from the definition for Skanska warehouse. The Skanska
overall business. There exist company boundary Maskin AB warehouse is owned and operated by
to separate the company and its external actors. Auto-ID system to rent and sell item to customer
The external actors are security, burglary, (RS) by means of RFID Technology (RT) in order
counterfeiting, and supply. Inside the company to gain benefits (B). This is not everything
boundary pictures has showed that the company Skanska warehouse does; this is a part of wider
functions and their flows. In the core boundary the system. There is other issue base root definitions
problem situation exists. It has existed items that like the Skanska warehouse owned and operated
can not handle with the limitation of Barcode system to implement a quality service (QS), by
technology. Stock taking has consumed more time devising and operating procedures to delight its
and resources within the present system. The customers (OP), in order to improve warehouse
solution is the RFID technology for future system. services(I).
11. common in Skanska Maskin AB and their logical
The existing auto-ID (barcode) system changes
dependencies are prepare (register) order, rent or
into the future RFID system call transformation
sell to customer, turn-in recycle or accept for
process that is heart of conceptual system of
repair, rent or sell to customer, need repairing or
Skanska Maskin AB. This transformation process
take into stock, adjust inventory differences, etc.
and Skanska warehouse worldview together create
On above six potential activities and their logical
very powerful concept which defines the belief
dependencies were common in Skanska Maskin
that make transformation reasonable.
From the Skanska Maskin IT-Administrative view
point, following component has identified from Issue item
Request item
the root definition.
Rent or sell to
Prepare
Component Meaning of Skanska customer
(register) order
warehouse perspective AB.
Customers who rent and buy
Customer
items from Skanska Maskin AB
Skanska Maskin AB staffs who
Actor
wish to exercise a technology
As shown in this picture, each activity may join
Transformation Unmanaged Auto-ID system
by arrow and arrow head indicates that an activity
transform to managed Auto-ID
depend upon other. That type of number of
(RFID technology) system [17]
activities make understandable model.
The belief that technology
Worldview
transformation to RFID is a
Figure 3 shows that logical expansion of the root
good way of demonstrating the
definition mention above creates a conceptual
qualities and gain benefits to
model of new RFID system at Skanska Maskin
customer as well as Skanska.
IT Management of Skanska AB
Owner AB. This type of detailed model (in Figure 3)
RFID technical standards and
Environment represents an interaction of human activity
Skanska warehouse policies (warehouse staff) that can be used to create a
Table 1: Component of Root Definition CATWOE
This transformation process can be evaluated by
Design Automated
monitor and control of three Es criteria such as: Receive and store
RFID system
items
Efficacy: Does the RFID system fully function in
Skanska warehouse.
Efficiency: Does the RFID system worthwhile and
Rent/Sell/Manufacture Allocate resources
used minimum resources. /Repair items
Effectiveness: Does Skanska Maskin achieve
benefits from RFID system over barcode [18].
Earn profit by providing Apply RFID technology
Stage 4: Building conceptual model - Base on effective and efficient
and carry out business
service
root definition, conceptual model (see Appendix
B: Domain model of Skanska Maskin warehouse)
well-structured evaluation of the state of the real
demonstrate potential activities and their logical
situation at the Skanska Maskin warehouse.
dependencies. The potential activities such as
request item, issue item, repair item, manufacture
item, return item, make inventory, etc. are
12. After developing the conceptual model for future
Figure 3: Components of the RFID system model
system (RFID) of Skanska Maskin, we have
and communication relationship
compared those two systems by using interaction
Taking into account of major activities in the sub diagrams of each system. It has been confirmed
model (rent/ sell/ manufacture/ repair items) in the that each problem situations has been answered
conceptual model, the high level Use-cases have from RFID system.
been created (see Appendix C) to describe the At once number of items can pass through the
system behavior in details of each activities. RFID interrogator which takes less time for doing
Using the use cases, sequence diagrams (see transaction of issuing and receiving. System can
Appendix D) have been generated to compare monitor and record defected item and repaired
benefits of future system (RFID) over existing item. System is round the clock active and items
Auto-ID system (Bar code) at Skanska Maskin can not go missing due to auto metical data saving
AB warehouse. To check performance measures when items are leaving from warehouse. Zero
for new system, monitor and control criteria have stock differs between physical stock and system
to be added into conceptual model. stock. Easily Items can track and trace.
Stage 6: Determining desirable and feasible
changes – RFID system is really a technical
Design Automated
Receive and improvement for Skanska Maskin AB. It has
RFID system
store items
exactly fitted ethically and culturally to the
Skanska Maskin AB. Unless RFID system has not
taken place in Skanska Maskin AB that may not
Rent/Sell/Manufacture Allocate resources
/Repair items gain profitable benefits from RFID over Bar code.
Due to RFID system taking over the bar code
system, changers can be happened within the
Earn profit by providing Apply RFID Skanska Maskin AB organization structure,
effective and efficient technology and carry
service
procedures and attitudes of employees [19].
out business
Stage 7: Action to improve the problem
situation - Changing an organization of Skanska
Take control action
Maskin AB with new system means that there are
Monitor for efficacy, efficiency
new problems will arise. Then all newly created
and effectiveness
problems should be investigated and debated.
This is iterative process which has to be iterated
Efficacy: warehouse transaction continue with
number of time until final static remove. When all
uninterruptable and accurately.
problems resolved then RFID system can be
possible to implement.
Efficiency: it takes less time and less labor for
many transactions.
4. Discussion
We started our research by establishing
Effectiveness: Skanska Maskin AB get full benefit
communication with IT Managers at Skanska IT-
in useful way from RFID.
Solution AB. We received thesis requirement
from them and held communication through
Stage 5: Comparing the conceptual model(s)
emails and telephone. We were invited for a field
with the real world problem situation –
13. system. Stage five made more accurate the future
visit at Skanska Maskin AB in Linnarhult
system and stage seven created final future
Gothenburg. The aim of our field visit was to
system. The second step of our approach was to
collect qualitative data regarding the research
compare the created to systems to reach our
problem. We used semi structured interview and
research goal.
observation as a mediating tools. Skanska Maskin
AB presented their present system and it
We assumed that the domain model of Skanska
operational functions to us. We conducted
Maskin AB was same as the present and future
interviews to gather data for each specific store
systems. We identified and analyzed the Skanska
function. The store staffs such as IT manager and
Maskin AB domain (See Appendix B). The
System Analysts answered the interviews with
domain consisted with following components;
their views of present store functions and future
customer request, payment, store, items,
system. Through the interviews and observation
accounting, sale, rental, return, repair,
we revealed how the technology and human
manufacture, recycling. These components
recourses utilize to perform store functions such
interconnected with each other to perform better
as renting items, selling items and repairing items.
work flow. We did not consider interaction
We observed present barcode operation in
between human activities and components in the
different store functions in different situations.
present bar code system shows in Figure 4. The
Barcodes were prepared by store staff when a new
interaction diagrams (See Appendix D, E) filtered
item arrives to store and the information of the
out number of process happen when items issue
item stored in the barcode. This barcode read and
(rent or sell), return, repair, manufacture, recycle,
collected data, once an item rent out, sell, receive
customer request, accounts update, etc.
back after rent and recycle. All these observations
were counted for the generation of the empirical
Bar code auto-identification system used for daily
data in the end of the research. Skanska Maskin
store operations such as renting out, selling,
AB recently introduced handheld barcode readers
returning, recycling and manufacturing items. The
instead of usual stationed barcode readers at their
inventory control, stock taking and item storing
counters to reduce for item handling. They said
used bar code identification. There was a unique
that they were interested to change present system
identification number for each item which store in
to RFID with improving handheld barcode
a barcode tag. The bar code tag attached to the
readers. They wanted to see the benefits of RFID
item. This identification number was read by a tag
system. A beneficial and successful future RFID
reader. The tag reader read the tag only it was on
system at Skanska Maskin AB can influence to
line-of-sight and visual contact. The bar code
implement RFID system to the other branches of
reader read a tag at a time. Once a customer order
Skanska Maskin AB in Scandinavia.
was received by Skanska Maskin AB, store staff
collected the items from shelf in store to dispatch
Our approach to find benefit was based on two
the items for customer. On this process store staff
major steps. In the first step, we gathered data by
used hand held or stationed bar code reader to
observation and interviews on the present system.
register item for issuing. Depending on the type of
The gathered data was utilized with SSM to create
item and item condition, the store staff updated
and identify both present and future system. The
the item status in the system or by manually
illustration of rich picture of Soft System
attaching sticker. The bar code reader gathered all
Methodology helps to identify the present system
information of items and sent it to warehouse
which contained the complex situation. The stage
three and stage four of SSM created future
14. created the following benefits. Reduced Cost,
management system. The system updated item
Operational Efficacy, Improved Visibility and
status in the database.
Improved Customer Services are the major
According to future system analysis, the item benefits we found in the research. These benefits
identification does without line-of-sight and visual can be discuss as the ability to generate an
contact between the item and the reader. The item accurate picture of the store item inventory which
has to be in the premises of item reading range of reduces the inventory cost and the data in the
the RFID interrogator. The time takes to read system will be up-to-date. Once the items rented
many items are not depended on their quantity. out the item inventory updates real time so there is
Once item has ordered from the store, the store no time delays in all the system functions consider
staff collects items and passes through the RFID to the present exciting system. The automated
interrogator to issuing counter. The RFID item moving hardware can identify the items and
interrogator reads all RFID tags at once and sends move them to the respective location. These
the data to RFID controller to update the database. processes intern have saved the time and human
Once an item return to store after using by the resources to the company. Same way the cost for
customer, the item receiving staff receive the item item production handling can be automated
and pass through the RFID interrogator. If depending on the type of the production items.
customer returns many items the RFID The real-time item inventory pictures can track
interrogator read all at once which eliminate of the and monitor loses and misplaces items in the
line-of-sight and reduces time to read items. The future system easily.
store staff checks the working condition of the
4.1. Reduce Cost
item and updates the item status such as “ready to
Referring to the present system interaction
rent”, “not usable and repairable” and “not usable
diagrams [ref. Figure 4 & 5 sequence diagram],
and not repairable”. Once an item status is
the present system’s time consumption for item
updated as “not usable and repairable” the item
handling relies on the quantity of the items.
automatically moves to repairing section. The
Barcode reading system read an item at a time
repair staffs receive the item and do the necessary
until all items registered to the system. The time
repairers. After the item repairing the store staff
consumption increases accordingly with number
update the item status and item moves
of items in the order. This problem gets
automatically to correct storing location. Once the
complicates and consumes more time to identify
item status is as “not usable and not repairable”
items depending on the type of them. Time
removes the item from the inventory and updates
consumption varies where the position of the tag
the stock and sends it automatically to recycle
on the item attached and the line of sight between
location. Once the item status change there is an
reader and the tag. As an example, once an item is
effect on item quantity, if the item quantity “out of
rented out visibility of the bar code decrease: a
stock” or “reached order point” then system
concrete mixers bar code is beyond readable due
automatically trigger and generate manufacturing
to damage of its surface. In such occasion the
order or purchasing order. This eliminates
receiving staff needs to do manual identification
shrinkage of items in the Skanska Maskin AB
using item inventory number. It is major time
warehouse.
consuming task and extra resources allocation to
We compared on above two systems in order to the company. Base on above facts more resources
identify the benefits by using interaction diagrams such as labor and technology have to be allocated
to handle items accordingly.
which belongs to each system. This comparison
15. capable of always available of all items at
Skanska Maskin AB. These results have
In the future system, RFID reader is capable to
eliminated item out-of-stock situation and
read all the items at once. That means the future
shrinkage in the future system.
system eliminate line of sight and other
environmental limitations such as bad visibility,
The RFID technology is facilitating to the store
working environment of item handling. It saves
management to automate the item handling
resources which involves handle items [ref. Figure
depending on the item environment. All above
4 & 5 sequence diagram]. Above mention system
functionalities save time and reduced distribution
benefits can be derived from number of item
labor costs in the future RFID system due to this
interactions with the system such as items selling,
time saving less work load assign to a single staff.
renting, receiving, manufacturing and repairing.
These results make organizational changers such
The human resource involvement for item
as reduce staff or assigned for other roles and
handling decreases in the future RFID system the
responsibilities.
way of item reading as mention on above. By
considering these facts we identified that future
4.3. Improved Visibility
system reduced cost for item handing compare to
The present barcode system in Skanska Maskin
the present system. The scaffolding and concrete
AB uses two different colored barcode tags to
mixers which have attached RFID tags can
identify the defect items (pink) and repaired
maneuver with minimum labor and time compare
(yellow) items. The visibility of the barcode tag is
to present system.
limited and depends on physical factors such as
4.2. Operational Efficiency item located environment and size of item.
According to the benefits describe in section 4.2
Referring to the reduce cost benefits in section 4.1
RFID system creates item visibility. This item
the future system is capable of handling more
visibility makes a clear picture of store items
items in less time. The RFID technology allows
availability that considers warehouse management
updating real time data and improves the item
to take managerial decisions effectively. The item
visibility to the company management. The
visibility provides by the future RFID system does
present system takes days to update inventory.
not depend on above mentioned physical factors
Stock taking is done by manually with warehouse
and it is visible through intranet at Skanska AB.
personal by item wise counting. The future RFID
The future RFID system is better than the present
system capable to do that within hours due to
barcode system at Skanska Maskin AB which is
RFID technology enable shelf which capable of
capable of doing item tracking and tracing.
frequently update items on the shelf [21]. These
RFID shelves act as RFID interrogator and send
There are some restriction and difficulties to apply
information to controller to update store database
the barcode technology to some items such as
accordingly. This reduces more labor involvement
concrete mixers and scaffolding. The barcode can
in stock taking and delays of inventory.
not use in such items due to the operational
environment. Most of the time barcode get
The present system at Skanska Maskin AB is
damaged and disappeared. With the future RFID
vulnerable of item counterfeiting, loss and theft.
system this can be eliminated by having
This happens due to the item status delay to
embedded RFID tags which does not required any
update in the database with barcode system. In the
line-of-sight to read.
future system, there exists an exact item status for
all items and no any delay. The RFID system is
16. With the future RFID system the labor
4.4. Improved Customer Service
involvement getting decreased and reduced
Referring to all above benefits of the future RFID
human errors. The error free environments attract
system, items are highly available and no in-
more customers to the Skanska Maskin AB.
between status with real time information.
Reduction of labor cost gain profit for the Skanska
Customers are having more chances to access
Maskin AB and benefit for the customers offering
many items at Skanska Maskin AB. The
a better price for an item. All type of transactions
customers can know the availability of the items
and documentations in the future system happens
immediately through the internet using the online
effectively and efficiently due to real time
web services; the web access can be easily
information.
connected to the real time store information.
Figure 4: Interaction diagram of issuing items by using Bar code system
17. Figure 5: Interaction diagram of issuing items by using RFID system
correct location at warehouse in Skanska Maskin
5. Conclusion AB. The future RFID system is a better solution to
unpredictable demand condition, operational
The potential benefits of future RFID system are
activities analysis and forecasting [22]. (c)
Reduce Cost, Operational Efficiency, Improved
Improved Visibility: The future RFID system is
Visibility, and Improved Customer Service. (a)
ability to share information and improving
Reduce Cost: Comparing the both system it is
inventory control, real-time inventory, reduce
significant that there exist and overall cost
shrinkage, visibility of order which in turn
reduction in the future RFID system. It happens
maximizes business profit for Skanska Maskin
due to time saving on item reading, automation
AB. The speed of demand for item selling,
item handling and reduction of manpower,
renting, manufacturing, customer data handling,
removing the item reading limitations of barcode
and customer order assortment are intermediate
system. (b) Operational Efficiency: In the future
function in improving real-time inventory within
RFID system item reading time comparison to
the future RFID system. (d) Improved Customer
barcode is dramatically reduce. The RFID reader
Service: Considering all above facts future RFID
can read many items at once comparison to the
system can provide better customer service in area
barcode reader which reads one item at a time.
of renting, selling, manufacturing items, handling
This makes efficient operations at Skanska
accounts and transactions.
Maskin AB. The labor involvements to handle
items are reduced comparison to barcode system.
The future RFID system creates organizational
In the future system RFID system can identify
changers at Skanska Maskin AB. In the
items and automatically moves items into the
18. training staff. It takes time to adapt and produce a
warehouse environment following changers are
cost effective output from the future RFID system.
taken place such as way of item receiving, selling,
This reduces profit to Skanska Maskin AB when
renting, moving, storing, repairing, manufacturing
the system changers happen but in the long run
and recycling. The other changers are hardware
RFID system creates profits. The future RFID
changers, warehouse and office layout, business
system will continue to mature with
process, appropriate data collection methods and
organizational and system changers. Costs will
locations changers. The structural changers of
need to continue to fall to levels comparable to
warehouse and employee role and responsibilities
current technology formats used today such as
change with the future RFID system. It may result
barcode identification. The security and privacy
termination of over staff and remains very few
concerns, item management and item tagging is
well experienced staff at the Skanska Maskin AB.
not likely to become a significant issue. Tag costs
The new technology involvement in the business
are the major variable cost component for RFID
process results the labor reduction. It is global
technology, and also Software, systems
problem which face the modern society. The
integration, process redesign and organizational
solutions for this labor reduction and
impacts will be significant to consider when the
unemployment increase have to handle globally.
system design.
If the Skanska Maskin AB does not adhere to this
new technological changers such as RFID
Acknowledgment
implantation which make a draw back to company
itself. This happens due to other competitor This paper is a bachelor thesis report in Software
companies are adapting to the new technology and Engineering and Management, written for IT University of
Gothenburg being part of Chalmers University and
create cheap and better quality products and
Gothenburg University. The Bachelor Thesis was carried out
services. The iterative SSM is a one solution to
by Mallawarachchige Don Sisira Kumara and Nihal
handle the labor reduction problem at Skanska Siriwardanagea at IT University in Lindholmen from January
Maskin AB. The side effect of future RFID 2008 to May 2008.
system, excess labor is a new problem situation
This thesis is base on project of RFID implementation at
which created within the organization. This has to
Skanska Maskin AB in Linnerhult. The purpose of this project
be analyzed with new rich picture, new root was to investigate benefits of RFID implementation. The
definition and new conceptual model in order to benefits have been derived by investigating existing system
and the future system with RFID based on research which
create new solution.
academically published.
In the future RFID system eliminate number of We would like to thank our supervisor Phu Phung at
warehouse assistant who may involve with item Chalmers University given us right guide lines to make
success of this project and teachers Björn Olsson, William E.
issuing, receiving, storing, and stock counting.
Sullivan, Helena Holmström Olsson at IT University
The managerial tasks change with real-time
providing feed back and keeping us on right track. Our
accurate information. The information alignment special thanks for Lars Gustafsson and Conny Roll IT
of store item helps the managers to take correct Managers at Skanska International AB and Lars-Erik
decisions and prediction for future business Jahansson, Per Fagerberg and Kristian Thisted at Skanska
Maskin AB who were given utmost support and encouraging
issues. The item status changers update real-time
us as well as facilitating to gather data.
situation therefore information alignment
Sisira Kumara Mallawarachchige Don
occurred. There will be extra financial
e-mail: sisira@ituniv.se; siskum@gmail.com
expenditure and recourses to spend in the begging
Nihal Siriwardanagea
of future RFID system installation. This can be e-mail: nihal@ituniv.se; nihal.edu@gmail.com
utilized on installation of hardware, software, Gothenburg, Sweden, May 2008
20. Appendix A.
Figure 6: RFID implemented warehouse management system [18]
The Figure 6: shows that the system architecture of the ware house management system. It is organized
with two main modules. The front-end module is consisting of two data collection modules. The fixed
logistic data collection module is collecting the data from the items by the use of the RFID readers located
in the number of places of the warehouse. The collected data read through the Ultra Wide Band
technology readers (UWB) which is in the variable logistic data collection module. These data send to
the next Back-End module which consists of the Resource Tracking Module. The resource Management
Engine is responsible of number of activities; Resource tracking, Resource picking tour optimization,
Resource utilization, Resource maintains policy and Resource Operation Efficiency. Back-End processed
data save in the Database.
21. Appendix B
Domain Model of Skanska Maskin AB Warehouse
1
Store Register
1 1..*
1
Include-in
Recycle Repair
0..1 0..1
* 1 1
Sales Line Item
Turn-in Records-
current
Stocks 1..*
0..1
File-in Can-be
Contain-in
Record-in
1
1
* *
Rental Item Sale
Return Item
0..1 1..*
0..1
1 * *
Report-as
Report-as
0..1 0..1
0..1 * 0..1 0..1
Posible-to
Contain-in Contain-in
0..1
Manufacture
*
*
Receives
Capture-in Returns Request-on
Customer Request
1 1
1
1
Paid-by
1..*
1
Accounting System
1
1 Payment
Capture-on
22. Appendix C.
User case diagrams: Skanska Maskin AB warehouse interaction with actors
Process Request
Issues Order
Customer
Receive item
Manufacture Item
Repair item
Store Staff
Issuing/ receiving/ Recycle item
Manufacturing /
repairing/ administration
Analysis
Activities
Manage
System
Security
Administrator
23. Appendix D.
EXISTING SYSTEM SENARIO
A. Use Cases
A.1 Use Case UC1 : Customer Order an Item(s) from Skanska Maskin AB
Scope : Order register in material handling system (Inventory Register Information
System – IRIS)
Level : System goal – receive customer Preconditions : Receiving Order enable by
phone, e-mail, fax and post
Post-conditions : IRIS system receive the order, order is in progress order
Primary Actor : Customer, Store staff
Main Success Scenario:
1. Customer makes order by telephone/email/fax/post to Skanska Maskin AB
2. Receptionist/Representative receives the order by telephone/email/fax/post
3. Receptionist/Representative selects the right item/s that customer needs
4. Register the order in IRIS
Alternate Flows:
3a. Item is not available to rent/sell
3b. Create new manufacture order
24. A.2 Use Case UC2 : Skanska Maskin AB Rent an Item(s)
Scope : Renting item from IRIS system
Level : System goal – Rent Items
Primary Actor : IRIS controller, Customer
Preconditions : Existing new order for renting is on process
Post-conditions : Deliver the item(s) to the right customer
Main Success Scenario:
1. Store staff collects the item(s) from location, according to the order
2. Ordered item(s) send to the issuing counter
3. Issuing counter register ordered item(s) in IRIS system (under rental)
4. Issuing staff makes ready ordered item(s) for delivery
5. Customer receive the items with gate-pass and estimated invoice
Alternate Flows:
5a. when customer not present to collect item(s), delivers the item(s) to the right location
5b. if service personal is included in the order, send service personal to the customer
25. A.3 Use Case UC3 : Skanska Maskin AB Sell an Item(s)
Scope : Selling item(s) to customer
Level : System goal – Sell Items
Primary Actor : IRIS controller, Store staff
Preconditions : Existing new order for selling item(s) is on process
Post-conditions : Deliver the item(s) to the right customer
Main Success Scenario :
1. Store staff collects the item(s) from location, according to the order
2. Ordered item(s) send to the issuing counter
3. Issuing counter register ordered item(s) in IRIS system (under sell)
4. Issuing staff makes ready ordered item(s) for delivery
5. Customer receive the items with gate-pass and estimated invoice
Alternate Flows:
5a. when customer not present to collect item(s), delivers the item(s) to the right location
5b. if service personal is included in the order, send service personal to the customer
26. A.4 Use Case UC4 : Skanska Maskin AB Manufacture an Item(s)
Scope : Manufacturing Item(s) for Renting and Selling
Level : System goal – Manufacture Item(s)
Primary Actor : Production staff, IRIS controller
Preconditions : Customer makes an order; item(s) does not exist in the stores/inventory
Post-conditions : Item(s) available for rent or sell
Main Success Scenario :
1. Store staff receives the order
2. Item does not exist in the store or inventory or item(s) is suitable for manufacture
3. Create manufacturing order
4. Production staff receives manufacturing order and manufacture the new item(s)
5. Send new item to store update the IRIS system
Alternate Flows:
2a. Item is less quantity reported to be manufacture
2b. Item returned after renting, and it is not usable and recyclable
