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/Suppl
yChainRFID_wp_web.pdf
http://www.autoid.org/SC31/clr/200305_3822_UConnec
t%20I4.pdf
http://www.ftc.gov/bcp/workshops/rfid/boone.pdf

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.

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.

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.

(8 bits)

(28 bits)

(24 bits)
(36 bits)

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).

EPC Infrastructure

ONS (Object Naming Service )

A querying mechanism similar to

the DNS (Domain Naming
system)

Matches the EPC code

The ONS server provides the IP

address of a PML Server that
stores information relevant to the
EPC .

EPC Infrastructure

PML is designed to store any

relevant information about a
product

Location information

Physical properties

Composition information

Manufacturing and expiry

dates

Etc.

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

hype cycle
Describes how technologies are
introduced and then mature through a
boom, burst, and stabilization period
hype curve

stability

trough of disillusionment

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.

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.

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.

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.

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.

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.

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.