RFID Potential in Supply
Chain ManagementRFID Systems
Radio Frequency Identification
(RFID) is a form of automated identification (Auto ID). Auto ID is a low cost
way to keep track of items as they move through the supply chain. Imagine a large
group of people in a marathon. The runners each wear a unique ID tag, a number,
to identify them from the time they start the race until they cross the finish
line. Using Auto ID technology, companies can manage their product inventory from
point of manufacture to point of sale. Automatic identification devices-bar codes,
satellite-based systems, and RFID tags-are used to monitor the shipping and receiving
of raw material components and finished goods through the distribution channel. Bar
Code. The bar code or Universal Product Code (UPC) tag was patented in 1952.
Since the first scan of a bar code in an Ohio supermarket 30 years ago, bar codes
have become ubiquitous on all consumer packaged items.
Satellite-Based.
Satellite-based systems use radio frequency technology to track containers of
merchandise on ships, and trailers of product pulled by trucks. A signal from
these battery-powered transponders is also activated by a transceiver as a container
enters a port terminal or a trailer enters a truck yard. This technology originated
during World War II when the U.S. government used transponders to distinguish
friendly from enemy aircraft.
RFID. Radio frequency identification
(RFID) is the next step in Auto ID development. RFID tags are integrated circuit-based
radio transponders attached to physical goods and/or their cartons and pallets.
The four different kinds of tags used are classified according to their radio-frequency
level (see Figure 1): Low frequency (LF), High frequency (HF), Ultrahigh frequency
(UHF), and Microwave (wave). RFID tags could replace the bar code; because they
locate product in the supply chain and communicate information to the manufacturer,
logistics provider, and retailer.
RFID System Architecture
Unique Identifier. This is part of the Electronic Product Code (ePC),
a uniform numbering scheme that identifies every inventoried item and assigns
an individual ID for any physical object.
Smart Tag. Every tag
attached to an item consists of a silicon chip and an antenna. Known as passive
tags, they are transponders with no power source of their own. Their energy is
received from the incoming radio frequency originating in the transceiver. Smart
tags do not need a large memory (96 bits, or less, of information), nor computing
functionality. The minimum storage requirement of a smart tag would be the unique
identifier but can also include other ePC information.
Tag Reader/Processor.
The reader/transceiver detects tags within its reading range and is the interface
between the tag and the value chain. Data is collected and sent to a data base
storing product information.
Networked Data Base. This stores additional
information about the product's genealogy and status.
RFID System Elements
WORM Tags. "Write once, read many" times tags are used to
hold the information as the item goes through its life cycle. WORM memories are
desirable for low-cost permanent storage.
ePC Naming Convention. The
ePC consists of four fields: Header gives the version number of the code to distinguish
different naming schemes; ePC Manager identifies the company or organization that
wants to number its products; Object Class identifies the product grouping; and
the Serial Number field identifies each product in the group (see figure 3).
Object Naming Service. The ONS is a reverse directory that maps the
ePC to the location on the Internet where the full product information is stored.
Physical Markup Language. PML is an XML based language describing
all the information related to a product and its infrastructure (packaging, pallets,
etc.) at a specific Internet site. RFID vs. Bar Code
Deliberate
vs. Automatic Scan. Whether at a checkout or in a warehouse, bar codes are
read deliberately by a person with a scanner. An RFID tag automatically announces
itself to a nearby reader by means of its radio signal. The continuous stream
of data available with RFID technology will increase accuracy and reduce the costs
of inventory control.
Line of Sight vs. Random Orientation. A
direct line of site is required to read a bar code. This point and shoot technology
is time consuming when compared to RFID. Since radio frequency identification
does not rely on visual alignment to gather information, product can also be randomly
placed on a pallet or in a warehouse.
Unique Item Identifier (figure
3). Bar Codes [North American Universal Product Code (UPC) and European Article
Number (EAN)] and their information are now subsets of the new Electronic Product
Code (ePC). The Electronic Product Code is the information transmitted by RFID
technology. RFID Can Improve the Existing Game
Shipping.
RFID can facilitate shipment consolidation by making it easier to know what
is on each load ("This is what I shipped."). Same-order items split
between several loads will not be misplaced or left behind to become shrinkage
( "This is what I meant to ship."). Loading times will be reduced as
readers automatically record what is loaded and create an Advance Shipping Notice
(ASN). The recipient knows exactly what to expect on arrival.
Transportation.
RFID not only makes it easier to track shipments of standard packaged goods, but
it also improves the efficient handling of reusable (sub-conveyance) packaging,
such as beer kegs and refrigerated food trays and dollies. The use of read/write
RFID tags can record the changing product in reusable food and drink containers.
Similarly, the overnight package business can be streamlined if a courier company
can eliminate multiple line-of-sight scans on 40 to 50 million packages a day.
Receiving. RFID has the potential to accelerate unloading times,
inventory reconciliation, and proof of delivery verification. This "one touch"
receipt of goods can move product to store shelves quickly and increase customer
satisfaction.
Internal Operations.
-Manufacturing plants will
be able to use RFID technology to track product as it moves through the plant,
facilitate product configuration, and improve labor productivity.
-Warehousing
operations can rely on RFID technology to generate immediate, constant, and accurate
inventory counts without the labor hours for line-of-sight bar code scanning.
RFID can also manage the merger of product lines in transit.
-Retail stores
will benefit from RFID's ability to automatically activate inventory replenishment.
Better on-shelf availability can reduce out-of-stock items and lost sales. RFID
tags can deter theft by alerting security if an unpaid item leaves the store.
It could also popularize automatic checkouts by making them fast and easy.
-Cross supply chain applications of RFID are in the areas of product recall of
consumer goods and fraudulent goods detection. The unique identifier will enable
companies to track food from point of origin to retail outlet and thus aid in
product recall and improved product safety. Standardization of product identification
will also help companies monitor pirated pharmaceuticals and protect consumers
from knock-off brands. RFID Can Change the Way the Game is Played
When a regular customer calls his local pizza parlor in Boston, they welcome
him by name and ask whether he wants to order the same pizza as last time. The
store recognizes his unique identifier (telephone number) and calls up his purchasing
record on its database. RFID has the potential to revolutionize logistics in the
same way the pizza parlor uses a customer's previous buying habit to anticipate
future wants. The Path of Innovation (figure 4) illustrates how various technological
innovations change the structure of society. Refrigeration changed the economy
of the southern United States. The web continues to change the way we do business
and organize our activities. RFID has that same potential.
Tomorrow's
supply chain will have to deliver higher levels of performance in satisfying consumer
demands. Emphasis will shift from manufacturers and retailers pushing products
into the value chain, to consumers pulling new or customized items into the supply
chain. RFID has the potential to offer direct insight into consumers' buying habits
(remember the pizza parlor), revolutionizing the way the supply chain meets customer
expectations. RFID will streamline the flow of inventory along the supply
chain, leading to new warehouse designs geared to digital sensing. RFID's insight
into consumer buying habits could also change the way retailers operate - automatic
shelf replenishment, personalized advertisements, smart homes and appliances communicating
directly with retailers for continuous inventory counts, and extending the visibility
of the supply chain to anticipate end-of-life and recycling potential. The consumer
will benefit with better service at a better price. RFID
is on its way to being the next revolution in supply chain technology!
Reprinted with Permission. Courtesy of Pete Rector, Senior VP, Research and
Development for Genco.
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