security label

June 13, 2012—Automobile manufacturer Volkswagen Slovakia is tracking its assembled vehicles as they undergo final servicing and inspection processes at its plant in Bratislava, using a real-time location system (RTLS) provided by Identec Solutions. The RTLS solution makes it possible for the company to improve efficiency during the cars’ final production stages, by knowing where individual vehicles are located, as well as preventing bottlenecks at specific service sites. The system enables the company to locate parked vehicles, in addition to identifying when a car enters and exits each of many processes.

The Bratislava facility produces more than 1,400 cars daily, with 400,000 automobiles planned for this year, including several Volkswagen models, as well as Audis, the Skoda Citigo and the SEAT Mii. The plant, which has experienced an increase in production demand during recent years, determined that improving its finishing area’s efficiency would help manage that growth.

After completing assembly, a vehicle is moved to the finishing area, where it travels through a number of stations while undergoing final quality inspections, as well as possibly spot repairs or other servicing. The precise order or sequence of those processes varies per vehicle. As such, locating particular cars when needed—as well as routing them to the proper area based on prior servicing, and ensuring that the vehicles remain on schedule for shipping—can be a time-consuming process. The RFID system was intended to resolve that problem, by tracking the processes that each vehicle has completed, as well as its specific location as it waits within parking areas between processes. The solution would not only help staff members locate vehicles in real time, but also improve capacity planning for each section of the finishing area.

“Because of the topology of the hall,” says Jens Wieland, Volkswagen Slovakia’s chief process officer (CPO), the company determined that it would be impossible to implement a solution based on passive RFID tags and readers consisting of gates through which the cars had to pass. The Volkswagen plant required a system that would track every vehicle’s entrances and exits at any of the processing zones and parking lots. For that reason, the company deployed a solution employing active RFID technology.

The journey from the Bank of Japan to the Diet, the country’s parliament, takes about 10 minutes by taxi on a good day and is one that Masaaki Shirakawa knows all too well. The BoJ governor has been summoned to appear before the nation’s parliament 20 times so far this year, including a double session on Wednesday. At this rate he will smash his annual performance record of 24 days, set in 2009.

Every time, the governor gets the same line of questioning: Why is the BoJ not doing more to stimulate an economy that has shrunk in three of the past four years? If the bank were to take bolder and more unconventional easing measures, politicians like to argue, prices in Japan would start rising, helped by a weaker yen, triggering a virtuous circle of investment, income and private demand.

Every time, Mr Shirakawa counters that whatever is holding back demand, it is not the cost or availability of credit. Just as important in stirring economic activity, as the governor noted in a speech last week, is raising Japan’s potential growth rate by getting more women and old people into the workforce and increasing productivity – none of which, he might have added, is a job for the BoJ.

And besides, Mr Shirakawa might also be tempted to argue, what else can the central bank realistically do?

If the BoJ were simply to tack on another Y5tn ($63bn) or Y10tn to its existing Y70tn asset-purchasing programme, it could hardly lead to easier credit conditions. Just 9 basis points of yield separated two-year bonds from five-year bonds last week, the lowest spread in more than two decades. Accelerating bond purchases to bring down interest rates would be like “pushing on a string”, says Seiji Adachi, senior economist at Deutsche Bank in Tokyo.

If the BoJ were to buy more long-term government bonds – as the International Monetary Fund recommended this week – it would edge closer to the natural territory of institutional investors and run the risk of being seen to support a profligate government, says Neale Vincent, a fixed-income analyst at Nomura. So far, the BoJ has limited its JGB purchases to bonds with up to three years left to maturity, arguing that this corresponds to the typical maturity of loans in Japan.

In last week’s speech Mr Shirakawa stressed that politicians must take steps towards fiscal reform “in order not to create any room for misunderstanding the bank’s [bond purchases] as financing government debt.”

Already, however, some see the distinction as debatable. The fact that the BoJ will be mopping up about a third of gross JGB issuance this fiscal year amounts to “de facto debt monetisation,” says Frederic Neumann, economist at HSBC in Hong Kong.

Buying more risky assets such as equities, property trusts or corporate bonds is another possible option but minutes show that BoJ board members have registered unease at blurring a boundary between monetary and fiscal policy. “Steering resources to certain sections of the economy is not a central bank’s responsibility,” says Kyohei Morita, economist at Barclays.

In view of the uncertainty over Greek elections this weekend, and the possibility of a fresh round of stimulus from the US Federal Reserve next week, the BoJ may be forgiven for holding firm on Friday as it concludes a two-day policy meeting, say analysts. But if deflation continues to linger and the yen stays strong, Mr Shirakawa – whose five-year term expires in April – can expect plenty more invitations to explain himself before parliament.

●Japan’s 10 utilities consumed the equivalent of 22 per cent more natural gas for power generation in May compared with a year ago, setting a monthly record as all the country’s nuclear power plants were shut on safety concerns, Reuters reports from Tokyo.

The utilities burnt 4.41m tonnes of liquefied natural gas (LNG) equivalent last month, a record for May, data from the Federation of Electric Power Companies of Japan showed.

Consumption of fuel oil and crude oil was up 157 per cent at 462,000 barrels a day from a year ago, the data showed.

The crisis at the Fukushima Daiichi nuclear plant sparked by last March’s earthquake and tsunami has shredded public faith in atomic power and prevented the restart of reactors shut for routine checks.

The 10 utilities generated 69.1bn kilowatt-hours of electricity in May, up 0.2 per cent from a year before.

Japan’s nuclear power output fell to zero for the first time in 42 years in early May. Kansai Electric, one of the country’s utilities, is projected to face a severe power shortage, though worries over rolling power cuts are subsiding as it is close to getting the formal go-head to restart its Ohi nuclear plant.

The ratio of nuclear power, which had accounted for about 30 per cent of Japan’s electricity demand before the Fukushima crisis, fell to a 34-year low of 10.7 per cent in the financial year ended March 31, the federation said.

Eon, Germany’s largest utility by sales, is to seek €8bn in damages from the German government for the accelerated phase-out of nuclear energy, should the country’s constitutional court deem the policy shift an illegal act of expropriation.

Eon’s announcement came as the highest court asked dozens of institutions – including the BDI industry association – to give their views on constitutional challenges submitted by Eon and rival RWE after Berlin last year closed eight of 17 nuclear reactors and brought forward a final phase-out from 2036 to 2022.

While legal experts believe a constitutional ruling will not come until late 2013 at the earliest, Eon’s demands throw a stark light on the risks of chancellor Angela Merkel’s “energy transformation” after last year’s nuclear disaster in Japan.

Ms Merkel’s ambition to replace nuclear power with renewable energy over the next decade has stirred fierce debate about the dangers of electricity supply shortfalls and rising prices. People familiar with the matter believe the potential payouts to the nuclear operators could total €15bn in compensation for lost revenues and now-redundant investments.

While the government has always maintained the constitutionality of the parliamentary vote to accelerate Germany’s nuclear phase-out, Eon and RWE have been vociferous in their opposition, filing suits in 2011 and 2012, respectively.

The companies claim Ms Merkel’s move to bring forward the phase-out was hasty.

Eon believes the lost revenues and investments in security equipment and nuclear fuel total some €8bn, while RWE calculates damages of €2bn alone for its two reactor blocks at Biblis, central Germany, according to people briefed on the filings.

However, Eon has been the only utility to quantify the total loss it says it suffered. RWE said it would detail a damages claim only if the constitutional court upheld its expropriation complaint as only that ruling could serve as the basis for a compensation suit before a civil or administrative court.

Swedish company Vattenfall, Germany’s third-largest nuclear operator by sales, is seeking damages before an international arbitration committee, although it did not specify the amount it was after. EnBW, the smallest operator, owned by the state of Baden-Württemberg, has not decided whether to sue the national government.

Legal experts said the oral hearing to lay out the case on the nuclear phase-out in Germany’s highest court was unlikely before year’s end. The court declined to comment.