Proposal for an RFID (Radio Frequency Identification) pilot project with embedded barcoding in the Distribution
Warehousing environment, with a particular focus on the technological requirements and implementation of a system that
will improve operational efficiency and productivity.
Introduction:
The Warehouse environment in Eskom is extremely labour intensive. With the loss of employees due to natural attrition and
rotation, automated technologies available in the market need to be explored to diminish the impact of the employees lost. RFID
(Radio Frequency Identification) with embedded barcoding was identified as the technology to be explored to reduce the time and
effort with human intervention required to perform the Warehouse operations (detail of the operations will be explored in the scope
of work).
Eskom Western Cape Operating Unit (WCOU) Warehousing is one of the key geographical locations for this particular project as
the site represents one of major Warehouses in Eskom Distribution with the highest number of transactions (receiving + issuing)
and the highest asset turnaround i.t.o stock value. The emphasis of this project is placed on particular stock items based on their
value and the level of human intervention. The stock items referred to are wooden poles with various lengths and diameters, steel
transformer related equipment and meters with plastic encasings.
Scope of work:
A proposal is required that details how a stand-alone RFID system with embedded barcoding will:
 Be fully integrated and utilized in the Warehouse environment, focussing specifically on the Electrical Distribution Industry.
 Indicate how the technology will improve operational efficiency and productivity in the Warehouse and how the
implementation thereof will reduce labour costs.
 Prove how users of the system can monitor in real-time the location and status of pre-determined/tagged stock items.
Currently the detailed RFID technical specifications to be used in the Warehouse environment are unknown; therefore the type of
RFID technology needs to be simulated to cater for all the different scenarios, material type and operational conditions. See below
what the Warehouse operations encompasses including the minimum technological requirements:
Task
Warehouse
Receiving
Warehouse
Issuing &
Dispatch
Activity
Involves the unloading and checking of the said
shipment received from outside
suppliers/manufacturers, to ensure:
 Physical material unloaded corresponds to
freight bill/delivery order, which include checking
quantities.
 Inspect goods and if discrepancies are
identified, it is noted and routed to the relevant
supplier.
Technological Requirements/Outputs
Products should be fitted with active & or passive RFID
tags that can be read by both fixed and handheld
readers.
Items are identified with the appropriate stock-keeping
unit number/part number, in the case of Eskom called a
SAP number, and the quantity received are also
recorded.
The following information are the minimum requirements
to be captured on the database, however further details
thereof can be discussed during the clarification
meeting:
 Eskom SAP no
 Short Description of item
 Eskom Purchase Order number
 Serial number (where applicable)
Comprises of distributing stock to pre-determined
areas that requires it (Project sites/ CNC’s), it
comprises of:
 Picking required items from a
selected/predetermined storage area in the
Warehouse.
 The shipment should be checked for omissions,
issuing documents to be prepared and one
When issuing stock via the fixed or handheld reader the
web-based database should automatically update and
reflect the stock as ‘Issued’, therefore stock-levels
should automatically reduce.
The information retrieved from the tags via the readers
should have the capability to be imported into a
database that is available and accessible via a webbased application. Proper records must be maintained
for each item received on the database.
The system should provide error-free picking and
issuing.
Warehouse
Stock-take
should ensure material is loaded on the correct
vehicle.
The following information are the minimum requirements
to be captured on the database, however further details
thereof can be discussed during the clarification
meeting:
 Issued Location indicated by reservation number
& Project number
 Bin Location
 Serial number (where applicable)
 Eskom SAP number
 Item Description
To verify current stock-levels in the Warehouse and if
there is a discrepancy to know when the discrepancy
occurred.
There are two particular ways counting needs to be
conducted:
1. Only count a particular item in a particular area
that is uniquely identified.
2. Count various items/materials in a particular area
of the Warehouse storage yard.
For the purpose of this exercise stock-taking are
conducted at random intervals.
The following 3 comparatives are made during
stocktaking:
1.Physical quantity
2.Computer Inventory quantity
3. Bin/Stock card quantity using a specific Eskom SAP
number.
Therefore the RFID technology proposed should cater
for both scenarios.
During stock-take the database should identify those
batches of materials which expired should the expiration
date/ shelf life have been captured.
The RFID scanner/reader should pick up how many
units are in stock, what are their serial numbers and
their location.
Live technical demonstration
As part of the technical evaluation criteria a demonstration need to be conducted by the prospective service provider to the
evaluation team, to prove:
 how their solution will cater for the specific business requirements set out by Eskom
 how the proposed solution will be conceptualized and implemented in the Warehouse Environment
 if and how the support to the solution will be maintained by the prospective service provider.
Suppliers should prepare themselves to conduct a live demo 2 weeks after tender closing, confirmation thereof will be
communicated by Eskom.
Area of expertise
Prospective service provider to demonstrate whether his organisation has the capability and capacity to handle the magnitude of
such a project by:
 Providing details regarding the capacity and skillset of its core team, if additional skills are required it should be
communicated upfront.
 Have the necessary know-how of the technology by providing contactable references and an overview of previous work
done using similar technology.
 Providing a breakdown of the implementation phases of the project as well as the period required to perform the work.
Payment Terms:
It is expected that the prospective service provider proposes the payment terms which they would like to negotiate. A detailed cost
analysis is required.