Vendor Accent

RFID: a reality check

Kaushal Vyas on the real potential of RFID technology—minus the hype.

RFID (Radio Frequency Identification Device) technology is at the peak of the hype cycle where there is over-enthusiasm and unrealistic projections about its benefits. Large retailers around the world, including Wal-Mart, have issued mandates to their suppliers to comply with their RFID initiatives within a specific time-frame. This mandate has sent the suppliers into fast forward mode to implement and comply with the mandate in a relatively short span of time. The majority of RFID implementations are focussed on mandatory compliance for outbound tagging and shipping processes by adopting a slap ‘n’ ship process. These implementations add significant cost to the supplier, while not adding much value to their own supply chain. This begs the question, how can these companies utilise RFID in other parts of the supply chain including manufacturing, distribution, transportation, and realise the true business benefits and value by implementing RFID technology.

Standards-based RFID technology has the potential to be adopted globally. EPC global is responsible for driving RFID standards worldwide.

RFID for manufacturing

An obvious area for RFID benefit is the manufacturing sector. Depending on the manufacturer’s profile, RFID can be used to provide significant advantage in multiple areas. Its benefits vary depending on what is being manufactured. Materials management is a key area of focus for manufacturers. To start with, manufacturers can track RFID-tagged raw goods while receiving and RFID-tagged finished goods during shipping. This provides a basic level of product tracking through the manufacturing processes starting with raw goods. Advanced applications can take advantage of RFID-enabled manufacturing and shop floor control systems to collect RFID data during the manufacturing process, thus providing data collection through all critical points including raw goods receiving, manufacturing, shop floor and finished goods tracking. RFID provides automated materials tracking throughout the manufacturing process. Its benefits include full accountability of raw material, reducing material loss on the manufacturing floor and automated tracking from raw goods to finished goods. Standards-based tagging provides granular level tracking information that can be used during product recalls.

The RFID-enabled supply chain

An RFID-enabled end-to-end supply chain starts with RFID-enabled manufacturing and tagging finished goods. When the finished goods are moved through the distribution process, warehouse processes can be optimised using RFID-based receiving, inventory control and shipping. These optimised processes can provide significant benefits to the distribution processes and enable supply chain visibility from manufacturing to distribution. Transportation processes can utilise the RFID-enabled finished goods for tracking in-transit shipments as well as enable value-added processes like security, compliance etc. Multiple RFID technologies can be used during transportation including active and passive tags, mobility solutions etc. Each supply chain area can be optimised individually, and companies can derive benefits from these efforts. This effort can be extended to RFID-enabled multiple manufacturing plants and multiple distribution centres. Optimised business processes provide extended benefits in their respective areas and improve overall business performance.

Enterprise RFID

Global companies are trying to solve complex problems that are difficult to solve using traditional methods. These revolve around product and information visibility, product track and trace, global data synchronisation etc. Some of these problems can be solved using RFID-enabled systems and business processes.

RFID-enabling parts of the supply chain provide extensive benefits in specific areas as outlined above. However, a fully-enabled end-to-end supply chain provides the enterprise with wide benefits ranging from global visibility to track and trace for products or information. In order to achieve these benefits across the enterprise, a long-term vision and plan needs to be implemented with the correct systems and infrastructure. An implementation plan with a bottom-up approach provides the ability to solve complex enterprise problems by enabling the local business processes using RFID and moving key events or data higher into the enterprise. Outlined below is an approach to solving global visibility and track and trace problems.

Key business processes within the enterprise systems need to be RFID-enabled at each part of the supply chain including manufacturing, distribution and transportation. This implementation creates a localised RFID information repository, which is used for RFID processes and RFID analytics locally.

Enterprise systems execute their key business processes based on RFID data. These business processes generate events that are escalated to the enterprise information repository via an event-driven architecture.

The enterprise information repository holds the key events from across the enterprise systems including manufacturing, distribution and transportation systems. The events are escalated real-time to enable real-time event- driven enterprise. Detailed information for specific events is provided through a hierarchical process as needed.

The information services portals provide complex business applications such as global visibility and track and trace applications. These portals are role-based and accessible throughout the enterprise.

Track and trace

Enterprise business processes such as global visibility as well as track and trace use key event data from the enterprise information repository and provide a consolidated view of the desired data. The track and trace application gives a relationship between data from multiple parts of the supply chain (manufacturing, distribution, transportation etc.) and presents the consolidated view to the user. Detailed tracing of information can be generated using drill downs and extracting data from the local repository.

Utilising RFID technology for right business processes can provide significant value in each area of the supply chain. Enabling end-to-end supply chain processes from the manufacturer to the consumer with this technology helps solve complex supply chain problems, thus directly enhancing the bottom line.

The technology is evolving and so are the standards and systems supporting RFID. It is therefore necessary to understand the limits of the technology before investing in it. Partnering with RFID and business process experts is extremely important for successful RFID implementations.

The author is Solution Manager, SSA Global.

He can be reached at kaushal.vyas@ssaglobal.com