Leading Steel Manufacturer POSCO Implements RFID Logistics System to Track and Trace Two Million Multi-Ton Metal Parts Annually

UPM RFID, Tampere, 26 July 2011 – POSCO, one of the world’s largest steelmakers, has implemented a proprietary RFID-based logistics solution, the Smart-Works System, which uses custom UPM DogBone™ UHF RFID tags to track and trace multi-ton metal coil products from manufacturing through customer delivery. The automated solution, which is designed to improve the accuracy and efficiency of key operational processes, has received funding from the Korean government as part of the nation’s drive to become a leader in the field of ubiquitous sensor networks.

Implementing RFID technology in steel mills poses unique challenges, as the pervasive metal environment interferes with RF signal readability. POSCO used its experience implementing a RFID-based worker safety program in 2009 to design its own logistics system and ensure it integrated seamlessly with its existing manufacturing systems. The company is using modified UPM DogBone™ UHF tags that have two antennas and are applied upright inside heavy metal coils tags as flag tags, perpendicularly to the items’ curved surfaces. Positioning the tags thus solves the problem of readability, while enabling POSCO to capitalize on UPM DogBone™ paper-based tags’ superior performance and cost-effectiveness for large-scale inventory deployments. Metal coils are tagged during the packaging process, and items are read when they are moved by cranes to the warehouse, during storage and again when they are readied for shipment.

Currently, the company is using RFID tags to identify coil products manufactured at its Kwangyang and Pohang plants for a select group of 17 customers. Beginning in October 2011, POSCO will tag all of the items it produces, or more than two million steel components annually.

POSCO’s RFID system is comprised of UPM DogBone™ UHF tags, hand-held industrial PDAs, fixed RFID readers placed attached to cranes and placed at factory gates, enterprise resource planning and manufacturing execution systems and a server. Because the RFID system integrates seamlessly with customers’ own planning solutions via the internet, they can access real-time information on POSCO products, using data to plan and fine-tune their own production operations.

By implementing the RFID-based logistics system, POSCO has automated the inspection, packaging and shipping of its metal coil products. In addition to providing complete traceability of company products, the RFID system has decreased packaging and shipping errors, improving customer satisfaction and reducing costs by $1.4 million USD each month.

“The POSCO-UPM RFID Smart-Works System demonstrates how RFID technology can optimize critical operational processes for manufacturing companies, even in challenging production environments,” says Han Ku Park, Vice President, Maintenance Technology Department, POSCO. “We look forward to extending RFID technology further into our supply chain to gain new sources of competitive advantage.”

“We are truly honored that POSCO has chosen to use UPM DogBone™ RFID inlays in this important project. With their performance at POSCO, UPM DogBone™ inlays have once again proven their ability to deliver exceptional read results in difficult environmental conditions, while providing significant efficiency gains and cost savings,” says Edward Lu, Sales and Marketing Director, UPM RFID.

About UPM RFID
UPM RFID, part of UPM’s Engineered Materials business group, is the world’s number one producer of HF and UHF radio frequency identification (RFID) tags and inlays. UPM RFID has a global service network consisting of factories in China and in the United States and a broad network of sales offices worldwide. The UPM Group employs around 22,000 people and it has production facilities in 16 countries. In 2010, UPM's sales amounted to EUR 8.9 billion. UPM's shares are listed on the Helsinki Stock Exchange. Further information is available at www.upmrfid.com.

About POSCO
POSCO is the world's largest integrated steel producer based in South Korea. The company's business covers steel, engineering and construction, trading, power generation, liquefied natural gas production, network and system integration, logistics and magnesium coil and sheet production. For more information about POSCO, visit www.posco.co.kr.

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