RFID in the Supply Chain

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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/Supp
  lyChainRFID_wp_web.pdf
• http//www.autoid.org/SC31/clr/200305_3822_UConnec
  t20I4.pdf
• http//www.ftc.gov/bcp/workshops/rfid/boone.pdf

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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.

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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 2
• Wal-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.

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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 utilized by Wal-Mart and the Department of
  Defense in their RFID mandates.

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(8 bits)
(28 bits)
(24 bits)
(36 bits)
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EPC Infrastructure

• Middleware allows companies to process relatively
  unstructured tag data taken from many RFID
  readers
• Direct it to the appropriate information systems.
  
• It is able to perform many different operations
• Monitor the RFID reader devices
• Manage false reads
• Cache data
• Filter Data
• Query an Object Naming Service (ONS).

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EPC Infrastructure
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EPC Infrastructure
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The promise of RFID

• RFID/EPC will effect business process for
  manufactures and retailers in 4 main areas
• Reduce store level out-of-stock
• Reduce claims
• Reduce unsaleables
• Reduce diversion

Source A. T. Kearney
Initial one year benefits for manufactures
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hype cycle

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

hype curve
stability
trough of disillusionment
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Features

• Asset management
• RFID 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.

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Features

• Production Tracking
• The 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.

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Features

• Inventory Control
• Readers 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.

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Features

• Shipping Receiving
• The 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.

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Features

• Regulatory Compliance
• Companies 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.

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Features

• Returns Recall Management
• Companies 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.

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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.