RFID: Is it really useful for Manufacturers?

RFID technology has a long history in various industries
for multiple decades. However, the introduction of RFID in supply chain world is
relatively new. The technology is at the peak of the hype cycle, where there is
over-enthusiasm and unrealistic projections on its benefits.

Yet, some large retailers around the world, including
Wal-Mart, have issued mandates to their suppliers to comply with their RFID
initiatives within a specific timeframe. This mandate has sent the suppliers
into a fast-forward to implement and comply with the mandate in a relatively
short amount of time.

The majority of RFID implementations are focused on mandate
compliance that focuses on outbound tagging and shipping processes by adopting a
slap-n-ship process. These implementations add significant cost to the supplier,
while not adding much value to their own supply chain.

This begs the question, how can these companies utilize
RFID in other parts of the supply chain including manufacturing, distribution,
transportation, and realize the true business benefits and value by implementing
RFID technology.

Benefits of the technology

Standards-based RFID technology has the potential to be adopted globally.
EPC Global, is responsible for driving RFID standards worldwide. An obvious area
for RFID benefit is manufacturing.

Depending on the manufacturer's profile, it can be used
to provide significant advantage in multiple areas. RFID benefits will vary
based on what the manufacturer is producing.

Materials management is a key area of focus for
manufacturers. Initially the manufacturers can track RFID tagged raw goods
during receiving and RFID tagged finished goods during shipping. This provides a
basic level of product tracking through the manufacturing processes starting
with raw goods.

Advanced applications can take advantage of RFID-enabled
manufacturing and shop floor control systems to collect RFID data during the
manufacturing process, thus providing data collection through all critical
points including raw goods receiving, manufacturing, shop floor and finished
goods tracking. RFID enablement provides automated materials tracking throughout
the manufacturing process.

Enabling the supply chain

An enabled end-to-end supply chain starts with RFID enabled manufacturing
and tagging finished goods. When the finished goods are moved through the
distribution process, warehouse processes can be optimized using RFID-based
receiving, inventory control and shipping.

These optimized processes can provide significant benefits
to the distribution processes and enable supply chain visibility from
manufacturing to distribution. Transportation processes can utilize the RFID
enabled finished goods for tracking in-transit shipments as well as enable value
added processes like security, compliance etc.

Multiple RFID technologies can be used during
transportation including active and passive RFID tags, mobility solutions, etc.
Each supply chain area can be optimized individually, and companies can derive
benefits from these efforts.

This effort can be extended to enable multiple
manufacturing plants and multiple distribution centers. Optimized business
processes provide extended benefits in their respective areas and improve
overall business performance.

Solving enterprise problems

Global companies are trying to solve enterprise problems, which are more
complex and difficult to solve using traditional methods. These problems revolve
around product and information visibility, product track and trace, global data
synchronization etc. Some of these complex problems can be solved using RFID
enabled systems and business processes.

Proper implementation

RFID-enabling parts of the supply chain provides extensive benefits in
specific area's as outlined above. However a fully enabled end-to-end supply
chain provides enterprise wide benefits ranging from global visibility to track
and trace for products/information.

In order to achieve these benefits across the enterprise, a
long term vision and plan needs to be implemented with the correct systems and
infrastructure. An implementation plan with a bottom-up approach provides the
ability to solve the complex enterprise problems by enabling the local business
processes using RFID and moving key events/data higher into the enterprise.

Key business processes within the enterprise systems need
to be RFID enabled at each part of the supply chain including manufacturing,
distribution and transportation. This implementation creates a localized RFID
information repository, which is used for RFID processes and RFID analytics
locally.

The enterprise systems execute their key business processes
based on RFID data. These business processes generate events, which are
escalated to the enterprise information repository via event driven
architecture.

The enterprise information repository holds the key events
from across the enterprise systems including manufacturing, distribution and
transportation systems. The events are escalated real-time to enable real-time
event driven enterprise. Detailed information for specific events is provided
through a hierarchical process as needed.

It is also important that the information services portals
provide complex business applications such as global visibility and track and
track applications. These portals are roles based and accessible throughout the
enterprise.

Enterprise business processes such as Global Visibility and
Track and Trace uses key event data from the enterprise information repository
and provides a consolidated view to the desired data. The Track and Trace
application provides a relationship between data from multiple parts of the
supply chain (manufacturing, distribution, transportation etc.) and presents the
consolidated view to the user. Detailed tracing information can be generated
using drill downs and extracting data from the local repository.

Utilizing RFID technology for right business processes can
provide significant value in each area of the supply chain. RFID-enabling
end-to-end supply chain processes from manufacturer to consumer helps solve
complex supply chain problems, thus directly enhancing the bottom line.

RFID technology is evolving and so are the standards and
systems supporting RFID. It is extremely important to understand the limits of
technology before investing into it. Partnering with RFID and business process
experts is extremely important for successful RFID implementations.

Kaushal Vyas is
Solution Manager, SSA Global