RFID in the Supply Chain

Primary Sources:

http://www.atkearney.com/shared_res/pdf/RFID-EPC_S.pdf

http://epsfiles.intermec.com/eps_files/eps_wp/SupplyChainRFID_wp_web.pdf

http://www.autoid.org/SC31/clr/200305_3822_UConnect%20I4.pdf

http://www.ftc.gov/bcp/workshops/rfid/boone.pdf

Supply Chain

Supply Chain refers to the distribution channel of a product, from its sourcing, to its delivery to the end consumer (also known as the value chain). The supply chain is typically comprised of multiple companies who coordinate activities.

The Wal-Mart Mandate

In 2003, Wal-Mart first told suppliers that they would be required to put RFID tags on products shipped to their distribution centers and stores by 2005. The intention was to track all pallets, and cases of all products from the top 100 US suppliers, and by late 2006, from all US suppliers. Wal-Mart required a 96-bit EPC with a Global Trade Identification number, which is an international standard. The tags operate in UHF spectrum (868 MHz to 956 MHz). The plan was to standardize the Class 1 Version 2 of the EPC specification; now there is a second-generation protocol UHF Gen 2Wal-Mart wants to be able to read 100 percent of the pallet tags coming through its dock doors. It doesnt expect to be able to read 100 percent of cases coming through a dock door, but it will require that for hand scanning. And it expects all tags to be read without slowing down the existing process.

EPC

EPC (electronic product code) is an emerging RFID standard developed by the AutoID center. It is the RFID version of the UPC barcode standard.EPC goes beyond UPC. It not only identifies the product as an SKU, but also provides access to additional data (via the EPC Network) about the origin and history of the specific units. The EPC tag itself identifies the manufacturer, product, version, and serial number. The serial number provides the key to data related to specific lots/batches/units. It allows you to track the specific unit's history as it moves through the supply chain. Unit-level data is stored elsewhere but a standardized architecture allows you to access the data much like a web page.This architecture is known as the EPC Network. EPC has become important. It is the standard being utilizedby Wal-Mart and the Department of Defense in their RFID mandates.

(28 bits)

(8 bits)

(24 bits)

(36 bits)

EPC Infrastructure

Middleware allows companies to process relatively unstructured tag data taken from many RFID readersDirect it to the appropriate information systems. It is able to perform many different operations Monitor the RFID reader devicesManage false readsCache data Filter DataQuery an Object Naming Service (ONS).

EPC Infrastructure

ONS (Object Naming Service )

A querying mechanism similar to the DNS (Domain Naming system)Matches the EPC code The ONS server provides the IP address of a PML Server that stores information relevant to the EPC .

EPC Infrastructure

PML is designed to store any relevant information about a product Location information Physical propertiesComposition informationManufacturing and expiry dates Etc.

The promise of RFID

RFID/EPC will effect business process for manufactures and retailers in 4 main areas:Reduce store level out-of-stockReduce claimsReduce unsaleablesReduce diversion

Initial one year benefits for manufactures

Source: A. T. Kearney

hype cycle

Describes how technologies are introduced and then mature through a boom, burst, and stabilization period

hype curve

trough of disillusionment

stability

Features

Asset managementRFID tags can be automatically read at the dock door as they leave with an outgoing shipment. By matching the reading with specific shipment information in a database, manufacturers could automatically build a record of what specific shipping containers were sent to each customer. This information could be used to document cycle times, improve returns and recoveries and aid in disputes with customers about lost or damaged assets.

Features

Production TrackingThe Auto-ID Center study found manufacturers can reduce their working capital needs between 2% and 8% by taking advantage of RFID to provide greater visibility into work-in-process tracking and materials inventory. By applying RFID tags to subassemblies in the production process, rather than to finished goods, manufacturers can gain accurate, real-time visibility into work-in-process in environments where bar codes are unusable. Industrial control and material handling systems can integrate with RFID readers to identify materials moving down a production line and automatically route the items to the appropriate assembly.

Features

Inventory ControlReaders covering warehouse racks, shelves and other storage locations could automatically record the removal of items and update inventory records. If an item was misplaced or needed urgently to complete an order, fixed-position readers or a worker with a mobile computer and RFID reader could automatically search for the item by reading for its specific ID number.To secure inventory from theft and diversion, readers could be set to sound alarms or send notification if items are placed in unauthorized areas of the facility or removed from storage without prior approval.Direct store delivery (DSD) and other remote sales and service personnel could take advantage of RFID readers integrated with mobile computers to quickly and accurately count inventory held in stores or in the vehicle.

Features

Shipping & ReceivingThe same tags used to identify work-in-process or finished goods inventory could also trigger automated shipment tracking applications. Items, cases or pallets with RFID tags could be read as they are assembled into a complete customer order or shipment. The individual readings could be used to automatically produce a shipment manifest, which could be printed in a document, recorded automatically in the shipping system, encoded in an RFID tag, printed in a 2D bar code on the shipping label, or any combination. Manifest information encoded in an RFID tag could be read by the receiving organization to simplify the receiving process and to satisfy requirements like those for advance shipping notices (ASN).Complete shipment data available in an RFID tag can be read instantly without manual intervention. Incoming shipments can be automatically queried for specific containers. If a sought-after item was present, it could be quickly located and selected.

Features

Regulatory ComplianceCompanies that transport or process hazardous materials, food, pharmaceuticals and other regulated materials could record the time they received and transferred the material on an RFID tag that travels with the material. Updating the tag with real-time handling data creates a chain-of-custody record that could be used to satisfy FDA, DOT, OSHA and other regulatory reporting requirements.

Features

Returns & Recall ManagementCompanies could supplement the basic shipment identification information by writing the specific customer and time of shipment to the tag immediately prior to distribution. In the event of a recall, companies could trace specific shipments to specific customers, which would enable a highly targeted notification and return operation and avoid a costly general recall. For general returns, companies could verify that the customer returning merchandise is actually the customer who received it, which would deter counterfeiting and other forms of return fraud.

Features

Service and Warranty Authorizations Upon completion of repairs or service, a record of the activity performed could be encoded on the tag to provide a complete maintenance history that travels with the item.