RFID Strategy -- Approaches To RFID Compliance

The three tiers of technology and cost.

I recently completed an eye-opening assignment for a consumer products manufacturer. This particular client sells to Wal-Mart but is not currently part of the RFID mandate program. I was asked to help them prepare for RFID tagging in anticipation of Wal-Mart's expansion of their supplier mandate.

I discovered that personnel throughout their organization were reading articles about RFID. So they were doing their homework, which was good. However, they were coming to outlandish conclusions about the power of RFID technology based upon what they read. This tells me that our part of the industry -- the industrial press -- is not doing a good job of separating the hype from the reality of RFID. Therefore, I will use this month's column to outline the basics of RFID compliance for readers who may be in a similar situation.

RFID Compliance Fundamentals

The goal of the Wal-Mart RFID compliance program is to affix an EPC-encoded Gen 2 class 1 RFID tag on each pallet or case of finished product to be shipped to specific RFID-enabled Wal-Mart distribution centers. This EPC number also needs to be included in advanced shipping notices (ASNs) that are sent to Wal-Mart. The EPC number encoded in the RFID tag contains information that identifies the supplier, the SKU, and the serial number of the pallet, case, or each. In most of the implementations I've seen, the serialization feature is not even used; all tags are given the same serial number (i.e., "1") or they are encoded with a sequential count (1,2,3,4,...) that has no bearing on the actual serial number of any product.

That's it! It is not much more complicated than barcode compliance. The power and potential of RFID technology lies in the speed and ease of acquiring, sharing, and acting on data and not in any magic within the tag itself. I think that confusion stems from the various ways of getting value-add from the process, and not from any complexity in the process itself. Depending on your industry and internal processes, there may be no value-add to RFID beyond basic compliance.

RFID Pilot Program: The First Tier

The quickest way to achieve RFID compliance is to talk to your existing printer or label supplier to learn about RFID-enabled features in their equipment. All the major players offer bundled software tools that allow RFID tag data to be incorporated into the existing data-stream for barcode labels. Many of them offer RFID "Quick Start" kits that allow your IT staff to quickly come up to speed on how to build RFID encoding into your existing label-printing tasks.

This approach assumes that you are using a manual slap-and-ship approach to labeling RFID-tagged product. The advantage of this method is low initial capital cost and rapid implementation. There are two disadvantages. The first one is that the slap-and-ship approach is labor intensive, so it does not make sense as your volume of tagged product scales up over the years. The second is that the RFID data is not used in any meaningful way to help improve internal processes or sales -- it just goes out embedded in the tag. Therefore, the hardware-vendor "Quick Start" approach represents a first step in an RFID pilot program. But, for many companies, this is more than enough for their present needs.

RFID Integration Consultants

A step up from the first approach is to engage the services of an RFID consultant, systems integrator, or value-added reseller. These resources will allow you to create a system that will retain RFID data in a searchable and reportable database. For example, the serial-number field within the EPC tag number could be used as a pointer to a database of other significant information related to your production, distribution, or sales.

Integrator solutions typically focus on adding flexibility for changing requirements or business growth. They do this by implementing commercial software to manage RFID device configurations and updates, as well as by specifying integration points to your existing IT infrastructure. These integration-software solutions range from simple scripts, custom development, or off-the-shelf enterprise integration applications. This approach represents the mid-point in RFID compliance cost, while providing a basis for future growth.

RFID-Enabled Supply Chain Solution

The third tier of RFID technology deployment is to install a commercial RFID-enabled supply-chain application, such as a WMS. All of the ERP and WMS vendors offer RFID add-on modules to their product set. These RFID-enabled applications manage RFID label generation, scanning, and communication with supplier networks such as 1Sync. They integrate RFID into the existing corporate databases without the need for the "integrationware" used in the mid-tier approach.

The advantage of these supply chain packages is the power and flexibility that they offer to manage data and business rules as your organization's RFID needs change in response to the market. They also offer ways of capitalizing on RFID data to help drive better demand planning or vendor management. The primary disadvantage of this approach is cost, complexity, and time to implement the program.

Conclusion

Capabilities vary widely between the approaches discussed here. The appropriate strategy for your specific needs also depends upon the strength of your internal IT resources. I hope this discussion has been useful as a guide to further research and will help you as you shop around to get best value.

Paul Faber is a Principal with Raleigh, N.C.-based Tompkins Associates, a supply-chain-solutions consulting firm. As the chief manager of RFID equipment implementation at Tompkins Emerging Technology Center, he possesses extensive experience in material handling solutions, systems integration, and installation. Paul has managed field integration and operations activities at material handling sites around the world.


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