|
|
Meeting The EPC RFID Mandates: Where To Begin
Any discussion of radio frequency identification (RFID) really can't get started without asking an obvious question: Why do we need RFID? Even more to the point, if bar code and other automatic identification technologies have added so much to improve the efficiencies of data accuracy and real-time information acquisition, why must we turn to yet another technology?
When considering the automatic identification needs of the supply chain, there are numerous reasons we’re heading towards RFID. But here is one of the key reasons: According to Deloitte Consulting, supply chain information inefficiencies are the cause of an estimated $40 billion in lost sales, or 3.5 percent of total sales revenues.
Yes, that’s a letter 'B' as in 'billion,' making it easy to conclude that there really is a long way to go to realize all the benefits that automatic identification has to offer. The next step is the improved product visibility and process improvement available through the use of RFID technology. That doesn’t mean bar code and other auto id methods are disappearing. Instead, realize that RFID is a complementary technology that will help reach the next level in supply chain cost reductions for both retailers and their suppliers.
Some background
EPCglobal Inc., a joint venture between EAN International and the Uniform Code Council (UCC), is leading the development of industry-driven standards for the Electronic Product Code (EPC) to support the use of RFID in today’s information rich trading networks. The organization had its origins in the Massachusetts Institute of Technology’s Auto-ID Center, which was established to identify technologies and methods to drive down costs throughout the supply chain.
EPCglobal is a member-driven organization comprised of leading firms and industries focused on creating global standards. Its goal is increased visibility and efficiency within the supply chain, plus higher-quality information flow among companies and their key trading partners. Members include major retailers, U.S. government agencies like the Department of Defense (DoD), numerous consumer product goods manufacturers (CPGs), plus RFID solution providers.
RFID systems consist of three primary components:
• RFID Tag (includes chip and antenna)
• Antenna
• Decoder/reader
Passive ultra-high frequency (UHF) RFID tags – tags which contain no battery in the 868- to 956-MHz range – are comprised of an antenna and a silicon chip that is electronically programmed with unique information. Radio signals are emitted by the antenna/transceiver and are received by the RFID tag when it is in range, which can be read and/or written to.
 This illustration (left) outlines the steps:
• Tag enters RF field
• RF signal powers the tag
• Data encoded in tag is transmitted to reader
• Reader captures data and may transmit data to tag
• Data are compiled
Passive UHF RFID was selected by EPCglobal as the optimum method for case and pallet tagging due to lower tag costs and favorable read ranges that would accommodate the varying requirements of both case and pallet identification.
The EPC itself is the data packet encoded in tags to uniquely identify each case or pallet. The main components of the packet are the header (identifies length, type, structure, version and generation), the manager number (identifies company/company entity), the object class (item identifier UPC/SKU), and a unique serial number.
In addition, EPCglobal created the EPCglobal Network, which enables users to exchange EPC-related data with trading partners, making RFID the key to unlocking the ability to share data in a mutually beneficial manner.
There are many advantages to the use of passive RFID tags as related to the EPC initiative:
Advantages
• Line-of-sight reading not necessary
• Identifies many items simultaneously
• Contributes to advanced supply chain management, including reduced out-of-stocks, real-time inventory transactions and improved speed and efficiency in product handling
• Knowledge of each item scanned once or multiple times
• Prevents counterfeiting
• Some tags appendable/reprogrammable
And there are issues as well:
• Tags and equipment still evolving
• No track record of reliability
• Performance issues regarding reading near liquids and metal
• Accurate reading due to tag placement/orientation
• Possible interference with other equipment/processes
• Frequency protocol concerns
• Hardware/middleware/software costs
• Tag costs
Getting started
Your customers are the force behind the adoption of RFID technology. When companies like Wal-Mart, Target, Albertson’s, Best Buy and the DoD began establishing dates for RFID compliance, confusion meeting that mandate became an issue.
 To begin, you must form an RFID team within your own company. The team should consist of all the key disciplines in your organization, including IT, manufacturing, logistics, operations, etc. Together you must define exactly what the RFID timeline of your customer is and what they expect from you.
Wal-Mart, for example, required its top 100 suppliers to use RFID tags by January, 2005, to identify cases and pallet loads of predetermined SKUs destined for specific distribution centers in the state of Texas. There was a timeline in place for expanding the shipments to be tagged throughout 2005, and there were approximately 30 volunteer companies in the first phase of compliance. All additional suppliers had to comply by January, 2006.
The DoD is requiring segments of its major suppliers to tag cases and pallets with RFID smart labels by January, 2005, based on contract renewal dates and specific terms. The springtime of 2005 is the designated date for phase one RFID compliance for retailers like Target, Albertson’s and Best Buy.
Here are some typical questions your RFID team needs to consider in order to get a handle on just what type of RFID solution fits your specific operation:
• What is your manufacturing process flow, and where might RFID fit in best?
• Are your products manufactured and shipped right away, or are they stocked prior to distribution? This impacts your decision about when RFID smart labeling should occur.
• How automated are your facilities today? RFID compliance might be the perfect time to update and improve your manufacturing and/or packaging processes.
• How are your orders processed? Are you manufacturing specific orders only or manufacturing for stock? Or is yours a mixed manufacturing process?
• What categories do your products fit into? Are they high margin/high value; does one carton equal one unit; is liquid or metal contained in the product or its packaging; are you packaging in cases, trays, bundles; what about pallet loads?
• What percentage of your product sales are subject to RFID compliance? If it's substantial, full RFID system integration might be the best solution; if it's a small percentage, you might want to meet RFID mandates in the simplest way possible.
Once you and your RFID team can answer those questions, you'll be prepared to formulate an RFID compliance plan. Ideally, of course, your plan will be one that can be executed in phases, because careful planning and as seamless an integration of RFID solutions as possible is critical. This is especially true with an emerging technology like RFID.
If a large percentage of your operation (and its profits) is going to be affected by the implementation of RFID, you might want to take a very high road and integrate an RFID system that will improve internal operations and therefore provide very real return on investment. ROI, however may not be a near-term factor, and will probably require some creativity. You also could choose to begin by utilizing a logistics services company to handle RFID tagging for you.
Common Variables
Whether your specific goals are simple RFID compliance, or the full-blown integration of an RFID system that will impact many parts of your operation, there are common variables that must be factored into your team’s explorations and a number of additional questions that have to be answered by your team.
You must look at the tags and your hardware and software needs. Many of these areas may only be addressed after you have accomplished at least some preliminary work in other areas. Your first reaction most likely will be to begin purchasing hardware, software and RFID smart labels so that you can meet customer needs. But before you do that, there are several steps that must be undertaken to ensure success and reduce your financial investment and implementation time. If these steps are not taken, you could end up spending a lot of time and money only to find out that what you have will not work.
You’re going to have to decide whether to place tags on some of your products or all of them; whether to manually tag products or apply them automatically; and whether to use RFID internally in your organization or just comply with your customers' mandate.
Software – You need to determine just how the new data you create will be handled by and integrated into your existing ERP system. RFID provides an extensive amount of information. Middleware packages act as filters that can keep applications and enterprise systems from being overwhelmed by RFID data. For example, as a case or pallet load moves past various RFID readers in your manufacturing facility, your business system will not need to accumulate all of that location data.
Hardware – Hardware requirements will depend upon what your implementation plans are; however, at the very least you will need equipment to encode the tags and an antenna/transceiver to verify and capture the data. Your team should work with reputable RFID vendors who can assist you in determining what you will need. Here are just a few of the hardware questions you’ll need to address:
• Should you produce RFID tags in-house? If so, you will require encode and reading equipment.
• Do you want to include variable printing on the label? This will require printing equipment.
• Will you choose to hand-apply or auto-apply the tags? In either case, this will require either stand-alone printers or label applicators.
• Do you want to validate the tag before it is applied to the product? This will require antenna and reader equipment.
Tag Durability – RFID tags are costly. You’re going to want to make certain tag integrity will be maintained prior to, during and after application to cases or pallet loads. That means carefully controlled handling techniques and storage procedures. Tags can be fragile and are susceptible to electrostatic discharge (ESD) and mechanical failure. How you handle them before you place them on the product and how the product is handled after the tag is attached both need to be addressed to ensure that when the product leaves your shipping dock it has a good tag on it. The bottom line is that you must ensure readability throughout the tag’s intended life cycle.
Tag Performance Issues – You need to take extreme care in tag orientation. For example, products or packages that contain liquid or metal can affect performance. Other important considerations are nearby devices or machinery that could cause interference problems. Still another variable is the specific tag type and how its readability can be affected by the position of the smart label on the product.
Tag Type & Placement – Testing RFID tag content and orientation sensitivity are essential to ensuring the performance of your tags. If you have products that present challenges, you’re going to want to determine precisely where the RFID tag’s optimum placement location will be. In this case, manual application of tags may not be precise enough and could cause problems with read rates.
 In addition, you must be aware that RFID tags from different suppliers will include slightly different tag positions. If your encode system requires precise tag placement within the label, you will need to specify this to your label supplier. These are important considerations that will help you optimize tag readability throughout the manufacturing and distribution process.
Not all tags are created equal. Each class and type of tag has characteristics that make it better suited to specific applications. The orientation of the tag in relationship to the reader/antenna will affect the performance of the tag. You will need to determine the best tag orientation as it relates to your product to meet a specific customer’s criteria for performance. Content sensitivity issues can be partially addressed by tag placement and orientation and/or tag type and antenna design in conjunction with creative approaches such as building optimized loads and utilizing air gaps. There are RFID application laboratories found in both academia and the private sector that can assist you in determining the best methods.
Even after you’ve pared down the variables, there still remain choices concerning obtaining the RFID smart labels themselves. First of all, you’re going to need a supplier who can supply RFID tags embedded in smart labels. Then you have to decide whether you are simply going to encode the tags or also include printed data; and then determine if you’re going to apply them by hand or with automated equipment. There are systems available that will encode tags, print text and bar codes on the smart labels, and apply them in one integrated operation.
Decisions also have to be made concerning when and where in the packaging/identification process to generate the Electronic Product Code serial number which is the key to this entire undertaking. The serial number allows each case and pallet to be uniquely identified. Conveniently, many standard label formatting and printing software packages are being upgraded to add the functionality to encode RFID tags. This software often resides between the label printer-encoder or printer-encoder-applicator and enterprise software applications.
The good news is that you and your RFID team do not have to come up with all of the answers to meeting the daunting challenge of implementation yourself. There are numerous companies with automatic identification experience who you can consult with to help guide your effort.
The key is for your RFID team to come together with clear goals that will help foster RFID pilot projects and further testing that will put you on the proper path to complete integration. It can be a challenging path, with many twists and turns, but it’s a path that promises to lead to logistical and economic improvements throughout the supply chain.
|
|
