Get Ready for the RFID Wave

But scanning over radio waves has its trade-offs. A pallet of paper products (like bathroom tissue) is relatively easy to scan because paper does not interfere with radio waves. But RFID tagging a pallet of canned soda is not as simple because metals reflect radio waves and liquids absorb them.

Generation 2 RFID tags that comply with EPCglobal's Electronic Product Code (EPC) standards for RFID (released last December) are only now becoming available. If you have not yet invested in tags, hold off for another couple of months. By then, tag standards probably will be refined and tag prices may be lower.

Get Ready To Tag

How can you prepare for RFID today? First, assess your organization's supply chain and the basic processes driving it. Most companies that have begun tagging agree that the real benefits of RFID do not come with "slap and ship" deployment methods, where you slap on the labels and ship the products without using the data for detailed inventory or resource planning. Instead, evaluate your underlying business processes and make changes and improvements as necessary to take advantage of RFID technology.Your assessment should yield a list of RFID implementation priorities, as well as their expected costs and benefits. For instance, you may decide to use RFID labels in shipping, to automate your shipping transactions, or in production, so you can automate production receipt as well, as the material moves from production to warehouse to shipping.

Where you label--item, carton or pallet--depends on the value of the items you are tagging. You can code individual serial numbers of each item, which helps if you are tracking field-service hours on specific units.

Most companies with RFID implementations tag at the carton and pallet levels, rather than on the individual product. You can make the most efficient use of tag data later if you define how your organization will count and track cartons, cases and pallets, and associate EPC numbers to internal inventory numbers. It also helps to determine how you will tackle cross-referencing and unit-of-measure issues, and evaluate lot numbering and individual serial numbering schemes.

You can do a lot of different things with RF tagging and scanning. The trick is getting the business benefit--gathering data you do not have already, or gathering a greater level of detail about your existing data, such as more granular inventory information.

These ideas all point directly back to your existing systems and processes: Will you capture your RFID transactions in the warehouse-management system, the ERP (enterprise resource planning) system or another application? Identify the business transactions needed for your product and then work your way back through the process to determine what will be affected, and highlight what you can do now to improve your internal processes. Look beyond your current transaction-level reporting, and consider what you can do with the additional volume and detail RFID will provide.The Hardware: Readers and Servers

RFID readers, which may be installed on a new server or added to an existing system, ride on your existing network or a new one. If you are still using barcoding, determine whether RFID will replace it or generate new transactions. Are there ideal locations for your new RFID scanners, such as between the factory and warehouse?

You may need to add more servers or bandwidth based on your expected RFID transaction volume. At some point, you will need to perform a detailed evaluation of the RF sources and interference, too. If your production or warehouse facilities have not run their operations on the network, consider the system operators' skills and your organization's ability to troubleshoot and support the new RFID application. You may need to provide training.

RFID trials have demonstrated how managing all this new information can be a challenge. RFID can swamp your network with real-time, streaming data related to the location and contents of cartons, cases and pallets. Make sure your servers and network can handle this onslaught of new data. And determine what you will do with the new data.

To manage RFID data, you may need to set up a separate application, on an edge server, to control your RFID readers. Once you capture real-time RFID data, the edge server summarizes and distills the scan transactions into a format that your applications can recognize. But this approach limits the new opportunities your RFID system can create for your organization because it only summarizes the data.There is no way to know for sure how RFID will affect your network and other applications until you go through an assessment process. Then you can decide whether to summarize some of your RFID data--by not sending every carton scan to your inventory system, for example. That saves on data and traffic volume, but then you cannot track cartons by their serial numbers. If you do track by serial number, however, you get more data on your products but strain your network.

Meantime, assess which manually captured transactions can be automated. And consider how RFID simplifies some inventory procedures, such as lot numbering. With RFID, you can mix lots on a pallet. If your processes for capturing production, shipping, returns and recalls assume one lot per pallet, you must re-engineer that process to support multiple lots. Now is the time to understand your existing processes and their limitations so you can modify them if necessary to get the full functionality from your new RFID system.

Remember that RFID requires your data-capture and -management processes to handle more information at faster speeds than barcoding systems do. Are you ready for real-time, streaming data, or do you need to buffer and slow your data-capture processes? Strike a balance: You cannot report receipts to your current inventory system one carton at a time, so you may need to update your inventory transaction-reporting process to support RFID.

Stress Management

Because RFID data volumes will put some new stresses on your organization's systems, you need a scalable solution. Determine if your servers can handle large transaction flows quickly and consistently. And anticipate more granular data and increased transaction volume: Which applications are affected by RFID transaction flows, and how will you move data to and through those applications? Do you have a single business system, or have you integrated several applications? Are you relying on your application vendor to link its modules, or do you have an internal integration team?A major benefit of widespread RFID adoption is its ability to deliver end-to-end transaction visibility among trading partners so that when a carton of your product moves from the back of Wal-Mart's warehouse to the front of the store, you can see it in real time. EPCglobal has established standards, processes and procedures for providing properly authenticated trading partners visibility into one another's transactions. These standards all rely on event-based XML transaction processing, and trading partners must use modern business-to-business transport protocols and trading-partner profiles. RFID will accelerate the movement away from EDI-formatted batch transactions to XML-formatted real-time events.

If you rely on EDI-Internet Integration (EDI-INT) systems to exchange data with your partners, you will be left behind by the RFID-driven shift to XML. So it may be time to update the skills of your EDI team. And do not forget that in the context of both EDI and XML, the underlying integration also encompasses other internal systems, which you should configure to handle real-time, event-based data.

Processing the Process

RFID deployment is all about your business processes. You can save time and money by automating the way you identify those processes or map the impact of changes like RFID. Although an RFID deployment does not involve formal business-process management, you still must understand how those processes--and your organization--can benefit from generating RFID data on your products. And a well-developed business-process map can help you model where and how RFID will pay off and prevent any bottlenecks.

Aside from ensuring that your network and systems are scalable enough to support your new RFID transactions, you should be able to remotely manage individual RFID readers on your network. Be ready to adapt to changing trading partner requirements, such as new tags and the new processes to support them.Unless you are facing an imminent compliance deadline, do not invest in RFID tags until you are well-versed in your business processes and the changes you will have to make to support RFID.

Select a meaningful RFID numbering scheme. Determine your level of RFID tracking--pallet, carton, item or even serialized items. Ensure that you can reconcile with current numbering schemes.

Get your network ready. RFID will deliver large quantities of data. Make sure your network has the capacity for the projected volume.

Know what to do with the new RFID data. Determine how you will summarize and present this data to your business systems.

Examine your internal integration requirements. Determine if you must update one business system or several. Then define how those systems accept transactions and whether they can accept data in real time.Know your external integration requirements. Collaboration among trading partners is a critical element of any RFID deployment. Assess your ability to support XML messaging over secure Internet protocols.

Get on top of process management. RFID will enable you to change--and therefore, improve--your business processes. But you first must understand your current processes.

Scale with it. RFID is already being implemented by several large trading partners, such as those who supply products to Wal-Mart and the U.S. Department of Defense. Be ready for RFID to become a big source of data within your organization.

Sites To See

EPCglobal information, www.epcglobalinc.orgThe IETF's EDI-INT protocol, www.ietf.org/html.charters/ediint-charter.html

Wal-Mart's RFID program

George A. Spohrer Jr. is an executive with Crowe Chizek and Company LLC, an accounting and consulting firm. He specializes in technology and process issues. Write to him at [email protected].