It’s payback time: The next generation of RFID may hold real value
Bryan Tracey -- Manufacturing Business Technology, 10/17/2007 12:00:00 AM
For all of its hype, RFID hasn’t had much of an impact on the logistics industry to date. Many enterprises have reported minimal return-on-investment, and multiple pilots have failed to yield full-scale RFID deployments.
Frankly, many believe RFID has taken up more room on the trade-show floors and magazines than it has in trucks and distribution centers.
If you’re a manufacturing professional, whatever you know about RFID, whatever opinions you have about the technology to date, be ready for a significant change, because the next wave isn’t just about little tags anymore.
In April, EPCglobal ratified a new standard called EPC Information Services (EPCIS).
You might recognize EPCglobal as the standards group that defined the Gen2 RFID Tag Air Protocol Standard currently specified for use by Wal-Mart and the U.S. Department of Defense. However, this latest standard from EPCglobal has nothing to do with how tags talk to readers.
EPCIS defines how companies communicate and share information about RFID-oriented observations throughout the supply chain. It provides both a standardized object model for the consistent description of supply chain events as well as a standardized structure for the exchange of that information within and between trading partners.
“Total Supply Chain Visibility” is a holy grail to many. Demand planning, recall enablement, counterfeit protection, diversion prevention, supply chain optimization, and efficiency—all of these grandiose ideas require that we greatly improve the visibility of products from manufacturing through to the point of sale.
Cross-partner visibility didn’t easily arise from the first wave of passive RFID, as we lacked a standard for sharing RFID-oriented observations.
With EPCIS, we’ve solved that problem. Soon manufacturers and retailers will become acquainted with the ability to easily share this type of visibility information with one another. New communications applications will be developed as the granularity and timeliness of the standardized information increases.
Of course, with EPCIS—as with previous forms of standards and technology—companies will perceive potential benefits differently. Some will embrace this new approach to visibility and thrive. In fact, they will not only win new business by providing best-in-class event access, but also benefit from that visibility internally.
Others will hold back, hoping that change isn’t necessary and demand for visibility will go away.
Your choice of a path is nontrivial and the answer isn’t readily apparent. In a world of razor-thin margins, increased demand and competition, the overhead of adding new technology to the mix isn’t always the obvious choice.
Organizations that embrace the technology and standards and use them to their benefit will emerge as the leaders of the next generation. These companies will offer RFID-based value-added services—tagging, certified observations, total visibility, serialized ASNs, etc. These services will add to the bottom line. These companies also will learn from the technology, optimizing their own operations by leveraging these RFID observations to minimize exceptions, improve turnaround times, and reduce redundant labor.
Just imagine boosting internal operational efficiencies while increasing customer satisfaction and retention. This is what RFID was supposed to be all about from the beginning.
Bryan Tracey is cochair of the Software Action Group at EPCglobal, and VP of engineering at GlobeRanger, an RFID software vendor.
