Applying RFID in warehouse operations of an Italian courier express company

This paper deals with the re-engineering and design optimization of a warehouse for package storage operations occurring daily at a leading courier express company in Italy. The objective of our study is to quantify the return on investment and error reduction that can be achieved by the application of advanced tracking technologies in the package management process. This study considers the use of RFID tags to facilitate identifying items in a package delivery service facility. In a first phase, we analyze the current process and show the speed-up of the operators with barcode readers compared to the operations handbook. In a second phase, we introduce radio frequency identification (RFID) technologies in the warehouse and perform practical experiments in order to detect configurations with error-free item scanning. An optimal configuration of the warehouse and of the RFID-based package management process is obtained by a non-linear optimization model that minimizes the overall technology and management costs. The probability of item errors is modeled by a maximum likelihood estimation procedure that determines the scanning area of each antenna with minimal scanning error. The new process with RFID technology reduces the costs of daily operations in the studied warehouse up to 25% and the workload of the operators up to 4 h. © 2011 Springer Science+Business Media, LLC.