Vendor Accent

Implementing RFID

Dushyant Pandya suggests a practical model for the successful implementation of RFID.

Unlike barcodes, RFID tags transmit identification data through almost any packaging, confirming content without individual product scans. By tracking and tracing RFID-generated data across enterprises and meshing it with detailed business process information, companies can gain complete, real-time visibility into the product lifecycle, and support strategic supply chain initiatives.

Adoption patterns

RFID will transform industries and provide cost-saving benefits by enabling enterprises to gather detailed information at any checkpoint. For example, British brewery Scottish and Newcastle placed RFID tags on high-value beer kegs and saved $25 million annually by reducing the number lost in transit or not returned.

Mandates from retailers such as Wal-Mart, Target and Tesco are driving RFID adoption. These retailers are now expanding the use to a wider range of products. They ask suppliers to use RFID tags which let them streamline the processing of massive inventories and reduce product handling. Over time, an increasing number of organisations and governments worldwide will see the potential of RFID and implement similar mandates.

In response, vendors are rushing to market solutions that meet purchaser mandates. However, analysts warn that these ‘slap and ship’ systems will probably need to be replaced in two years or less because they fail to leverage the ways that RFID can boost revenue generation and operational efficiency.

Moving beyond the importance of complying with customer requirements, RFID technology offers rich business benefits.

• Reduced out-of-stocks. Reading RFID tags at the case level lets retailers identify potential out-of-stocks and place immediate replenishment orders.
• Enhanced security and reduced shrinkage. The ability to track cases of high-value products across the supply chain helps reduce theft, tampering and loss prevention costs.
• Improved delivery receipt and reconciliation processes. Accurate information hastens the order-to-delivery cycle by quickly reconciling deliveries with shipping documents, and by identifying discrepancies and analysing causes.
• Improved management of time-sensitive goods. RFID makes it easier to monitor goods with limited shelf-life and ensures that older products are rotated to the front.
• Better inventory and warehouse management. RFID improves inventory accuracy by reducing human intervention. It shortens the warehouse cycle by making it easy to identify the case and pallet contents without scanning individual barcodes.
• Better defect-tracking and recall management. RFID- generated data can be used to discover where defects appear and determine which products to recall.
• Faster product velocity. By analysing real-time RFID track-and-trace information, companies can identify sales velocity, eliminate distribution bottlenecks, and improve business processes.

Effective implementation

Implementing RFID is a significant investment. Companies developing an RFID strategy and embarking upon implementation must attempt to maximise RoI with technologies that meet their needs for both the short and long term. Critical questions to consider include (i) how a technology infrastructure can route massive amounts of RFID data to the correct applications and business processes, (ii) does the company have the business context that leverages RFID data to identify problems and opportunities, and (iii) which are the technologies that enhance existing business processes and support re-engineering.

Four smart stages

To be successful, companies should plan a four-stage RFID implementation model that addresses technology and process management challenges.

Stage I: Scalability and manageability in shipping Due to limited improvement in inventory management, order fulfilment, packing and shipping, RFID is primarily a cost centre at this stage. However, considerations must include

• Scalability. Technologies that gather and distribute RFID data at manufacturing and warehousing facilities should provide a foundation for distributing it across the enterprise. A solution should scale to support gathering, storing and routing increasing amounts of data.
• Data scanning and integrity. Reader, collection and filtration devices need enough data management and smoothing functionality to accurately manage large amounts of data.
• Long-term viability. A solution must be flexible enough to accommodate ongoing enhancements and emerging standards.
• Integration with warehouse and factory management systems. Support for seamless, real-time data delivery in the format needed is a must.
• Manageability. Remote monitoring and management capabilities are vital.

Stage II: Integrating RFID data into IT infrastructure

At this stage, companies want to recoup investments and generate additional RoI. Though RFID can improve asset management and order reconciliation, realising these improvements requires data to be accessible by enterprise applications. Companies should consider

• Reliability and scalability. A platform must route information continuously and scale to handle increased use of RFID tags, more scanning points, and facilities in creating and shipping products.
• Application connectivity. Adapters that deliver data to ERP and CRM applications with minimal configuration are indispensable—as is the ability to manage metadata across applications and maintain cross-referencing relationships.
• Partner connectivity. Large-scale transfer and synchronisation of data and documents among trading partners is vital. It should include UCC net-based data synchronisation and incorporation of EPC data into advance shipping notices and purchase orders.
• Manageability. Administrators must be able to monitor and manage all infrastructure components, including those involved directly and indirectly.

Stage III: Improving business processes

At this stage, organisations can improve supply chain execution with business practices that allow them to identify and respond in real-time to changing conditions. Using RFID data to drive business process improvements requires software that helps coordinate people, processes and technologies in support of business goals. When evaluating these, companies should consider

• Event-driven rules-based architecture. A solution must not only identify and manage RFID-created events, but also define and execute complex business rules.
• Visibility into business data and processes. An enterprise must support the aggregation, analysis and presentation of information about internal and external business activities and KPIs.
• Adaptability. To ensure that managements rapidly implement process improvements, support for graphical, point-and-click definition and modification of business rules and processes is critical.

Stage IV: Driving towards predictive business

Companies will derive maximum benefit from RFID if they incorporate the principles of predictive business as these allow organisations to identify problems before they occur and put smart solutions in place.

The right solution

This practical RFID model makes it simpler to choose the right solution. Each stage builds on the earlier one, and ideal RFID solutions leverage aspects of the same key components in each stage.

• Enterprise backbone software. It creates a reliable and scalable infrastructure for distributing RFID-driven data and assessing its impact. Powerful messaging and monitoring serve as the foundation for the service-oriented, event-driven architecture required to deliver data across the extended enterprise.
• EPC Agent and Event Cache Software. It supports RFID implementation and integration. An EPC ALE- compliant edge agent distributes RFID information based on rules and content, making it possible to monitor and manage edge applications. Event cache software is tuned for EPC information service, rapidly storing RFID data so that it is accessible and can be enhanced with contextual information.
• Connectivity and Process Management Software. It enables companies to connect all end-points, coordinate processes of all levels of complexity, and streamline activities across boundaries.
• Business Optimisation Software. It aggregates, filters and delivers information and interfaces—making available the data and services necessary to participate in business processes, measure performance, and respond to threats and opportunities. Equally important, the ability to incorporate massive amounts of RFID-generated data into a picture of operations and performance allows enterprises to drive dramatic process improvements.

Making the move

Predictive business transforms and enriches RFID solutions by integrating them with enterprise applications. Through advanced analytics and algorithms, best practices and business process improvement, predictive business and RFID can create new and profitable ways of meeting customer needs.

The author is Senior Director, Emerging Tech. & Market Development, TIBCO Software.
E-mail: dpandya@tibco.com