Many Airlines grapple with the problem of mishandling of luggage. Issues with bar codes such as inaccuracy in readings, damages and expiration have contributed to loss or mishandling of luggage. In addition, there are substantial costs associated with returning of mishandled luggage to their owners. Radio Frequency Identification Technology (RFID) may be used to track luggage through the pinning of tags on bags and other passenger belongings. Airlines may benefit from this technology. For example, Delta Airlines have agreed to a revolutionary luggage tagging system which is based on Radio Frequency Identification Technology (RFID) to identify the exact location of luggage belonging to a passenger. This system enables the passenger to know that their bags have been unloaded and the luggage carousel they are expected at. As detailed in this paper, this results in numerous advantages such as enhanced customer service, reduction in reimbursements to passengers, reduction in mishandling and loss of baggage as well as improved reputation of the company. This paper examines RFID technology in the context of Delta Airlines and how it eliminates problems associated with luggage loss.
Business problem statement
Over 3,000 bags get lost every hour in airports and airplanes worldwide. Undoubtedly, baggage loss is a significant problem for modern travelers. When the check-in tag that is usually pinned on a bag is missing, has expired (bar-codes are recycled continually) or has been damaged, baggage handlers resort to using a physical description of the bag for identification. This can be extremely daunting since there are over 4 million monthly checks across the 150 billion registered property items. The IATA surveyed all airlines with the goal of establishing the reasons behind bags being mishandled as well as the extent to which bags are being mishandled (IATA, 2007). This survey revealed that there are two main areas where issues can be fixed through RFID. First, barcode reading problems result ion 9.7% of mishandled and lost luggage. Secondly, failures to receive luggage status messages contribute to about 11% of all mishandled luggage (IATA, 2007).
Brief Description of Proposed Solution
Developments in logistics have transformed the world extensively. Radio frequency identification (RFID), an emerging technology, is increasingly being adopted in industry and business. RFID systems are made up of three components namely the tag, the reader and the computer system. The tag is made up of embedded chips on a card/ tag. These chips transmit and record information on these items. Most RFID tags available store data which is specific to a certain item. This data is used to identify this item. The reader is a radio frequency transmitter and receiver which receives signals and sends signals to communicate with the tag. This communication is passed to the computer system for processing. The computer system receives data from the RFID reader through a wireless connection or cable for storage, to interpret and take action. As a result of its mobility, organizational systems and technologies (“MOST”) qualities, RFID has garnered a significant amount of attention and considered to be a revolutionary wave in IT. RFID enables tagged items to be mobile as well as intelligent. It also enables communication with the informational infrastructure of an organization. There is a contact information database which holds the information that facilitates notifications in relation to each unique baggage code. Any method may be employed in receiving information in the contact information database. The passenger interface is configured to enable the passenger enter portions of information by email, over the telephone, through a website of an airport terminal.
The RFID system notifies passengers on the status of their luggage in flight and helps to find lost bags. The RFID system was developed by LugTrac. LugTrac informs passengers whether bags have been loaded to their flight by way of email or by cell-phone. The LugTrac system may alert personnel when something goes wrong and may be a way to save one’s luggage just in time from being placed into the wrong flight. The baggage code readers may be of various types. These include optical bar code readers, RFID tag readers or QR readers. The readers are positioned at locations at which they can track arrival and departure of luggage. When tracking arrival; as well as departure of luggage from a given location, several readers are used. The luggage location notification system is configured to make a notification which is automatically sent to the passenger whom the luggage belongs to. Each notification shows the location from which the luggage has arrived or the location from which the luggage has departed. The time of these events is also recorded. The notification contains the name of the passenger and their flight information such as flight number, the flight arrival city or airport, anticipated departure and actual departure times. The user may configure to send notifications to a wireless mobile communication device such as a phone, iPad, email-address, instant messaging application or mobile application. The mobile app is a revolutionary approach to Delta Airlines RFID system which can be downloaded from an online App Store such as Google play and installed into a smartphone or other intelligent mobile device.
General Benefits to the Company
There are several general benefits that arise from the adoption of RFID technology. First, there are cost savings. According to IATA (2007), annual savings of US$ 760 million will be made when fully implemented (US$ 0.10 per tag). By the time the RFID system is fully implemented, only 1% of 2 billion plus luggage items handled annually will be mishandled. Each luggage mishandled costs and average of US$ 90 (IATA, 2007). Costs from mishandling are associated with the return of mishandled luggage to the owner or reimbursement.
The second benefit is reduction in loss and mishandling of baggage. This is made possible because RFID affords the user higher accuracies in readings as compared to traditional barcodes. Tests indicate that the percentage of first-reads is 99 percent in RFID while in bar-code tags it is less than 90 percent. In addition, the writing option provides possibilities for new applications that enhance security. The efficient luggage reconciliation process through simplified bag tag readings also makes the process of luggage handling smooth and eliminates chances of luggage loss. In addition, data on the tags may be updated in real time at any time for added security. For example, the results from inline screening may be written onto the tag.
The third advantage is enhanced customer service. Customers get to relate well with the airline personnel and to trust them with their luggage. There is customer satisfaction. The convenience with this approach is that there is flexibility in the bag-tag choice. This is because the system can read all IATA-issued bag tags from a host of different manufacturers. Besides enhanced customer service, the reputation of the company is also safeguarded as a result of customer satisfaction.
Delta Airlines is one of the leading American airlines with its headquarters in Atlanta Georgia. Delta Airlines oversees over 5,000 daily flights, which are facilitated by about 80,000 employees. Despite having had years of trying to enhance its luggage-handling systems, Delta saw the performance of bar-code-based system collapse. Bar-coded labels were read successfully only 85% of the time by scanners. The company had reached a situation where new improvements could not be made without new technology being utilized. Although only 0.7% of the bags were actually lost, the airline had to spend over $100 million in annual costs to return bags to the rightful owners and compensate those customers whose bags were never found (Collins, 2004). The management of Delta Airlines decided to take on the problem head-on. They looked to RFID technology as the means of creating better luggage handling systems for passengers. A pilot test was initiated whereby checked luggage was placed on flights between Florida and Atlanta, Georgia. In the test, Delta successfully tracked 40,000 bags bearing RFID tags from checking to aircraft loading (Wyld, Jones, & Totten, 2005). The RFID-enabled system brought about handling accuracy higher than that of the bar code system. In 2004, Delta implemented a pilot test in Ohio which brought the same results.
Audience for Recommendations
The RFID-tagging system is a brilliant idea that is promising to end the lost-luggage challenges for airlines. The aviation industry could benefit immensely from the adoption of RFID technology. According to Mishra and Mishra (2010), the aviation industry lost about $2.5 billion on lost and mishandled luggage. This implies that there are extensive costs incurred when reuniting lost bags with their owners. It is appalling that other airlines have not yet fully embraced the RFID system despite its inherent advantages especially given that carrying luggage is fast becoming a business. Some carriers charge hefty fees for the handling of luggage. Senior management and suppliers should take up this technology with the view to improving service delivery to passengers, improving the company’s reputation and avoiding extra costs. The senior management in airlines should accept change and the advantages it promises to deliver.
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Houston, T. (2011). FlyDelta app lets you track your baggage on iOS and Android. The Verge. Retrieved December 6, 2013, from http://www.theverge.com/2011/11/27/2590264/flydelta-app-lets-you-track-your-baggage-on-ios-and-android
IATA (2007) RFID Business Case for Baggage Tagging. available at http://www.iata.org/NR/rdonlyres/99091491-CB49-4913-BAB4 EA578CA814CC/0/RFIDforbaggagebusinesscase21.pdf
Mishra, A., & Mishra, D. (2010). Application of RFID in Aviation Industry: An Exploratory Review. Traffic & Transportation, 22(5), 363-372 .
Wyld, D. C., Jones, M. A., & Totten, J. W. (2005). Radio frequency identification (RFID) (Evaluation). Academy of Marketing Studies Journal, 9(1-2), 1-13.