RFID: A Business Driver for the Enterprise

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Like any IT buzzword bandied about exhaustively, beneath the hype there is a true value for your organization. Imagine tracking and securing all your in-transit goods, and having real-time access to the location and condition of every shipment, including details like quantities, sizes, temperature and exposure to heat or sunlight. Imagine intelligent exception management, protection against counterfeiting, contamination and theft…and the ability to out-execute, out-think and out-act your competition – because you can see more. Within this operation lie millions of transactions and data that need to be collected, organized, warehoused, and reported on intelligently.

The business drivers for RFID (radio frequency identification) are self-evident. In the U.S. the value of imports increased by 15 percent, while the value of exports increased by 5 percent, from 2002 to 2003. Increasing imports increases risk. In January 2002, U.S. Customs launched the Container Security Initiative to help prevent containerized cargo from terrorist exploitation. IDC estimates that the typical early adopter of IT solutions for safe commerce will spend $3.7 million. The majority of these dollars will be earmarked for contingency planning, managed security, secure access control systems, and electronic document management and capture. Companies that implement supply chain management systems with RFID will exponentially experience reduced costs, more business agility and responsiveness, and potentially improved supplier relations – and ultimately will reduce their overall liability while increasing security.

Global RFID Network Deployed

In partnership with Unisys, the U.S. Department of Defense created the world’s largest RFID network. Deployed worldwide, with more than 1,500 nodes in 25 countries including airports, seaports and rail terminals, the network tracks thousands of containers and air pallets of all classes of supplies, from the point of departure to mobile field units and individual soldiers. Unisys has led more than 20 visible commerce implementations and pilots in consumer electronics, life sciences, apparel, retail, food and beverage, airlines, banking, and government. Because of its real-world experience, Unisys knows how to leverage best practices to ensure effective implementations, including strategy (earning executive support), operations (pallet and case-handling techniques for 100% read rates), and technology (integrating) points for enterprise systems and RFID data).

RFID tags and readers across the supply chain enable remote monitoring of cargo containers. RFID can be used with global positioning systems and geographic information systems to estimate delivery times, plan shipping routes, and forecast supply chain needs. Major retailers have already launched many initiatives around RFID for their suppliers.

The expertise Unisys has garnered over the years has taught it many practical realities about RFID: The data can support many business goals – from inventory management to “zero gap” security – but the flood of data needs to managed to allow for analytics, automated work flows, and real-time decision making and collaboration with suppliers.

RFID affects every industry. Those in the automobile industry are well positioned to use RFID because of their experience in using bar coding for tracking components through the supply-chain and manufacturing process, as business processes are already established. They plan on using a coexistence approach combining both RFID and bar code technology based on the business requirements. (RFID needs to mature more before it will meet all of their tracking requirements.)

A New and Rapidly Changing Technology

Since RFID is based on wireless technology there are several environmental concerns, such as networking capability, radio antenna configuration, RFID tag types, locations and durability, and tag information serialization. Again, RFID technology is still new and changing rapidly.

A lot of technology is necessary to fuel RFID: hardware (tags and readers), middleware, electronic product code information system (EPCIS), and integration to back-end ERP and warehouse management systems. Bar coding companies are investing heavily in RFID to render their existing solutions compliant. The EPCIS component will facilitate the exchange of product information between trading partners following the UCCNet model (EPCglobal was funded by UCCNet). EPCIS may or may not be an off-the-shelf product, but more likely, an extension of a company’s ERP application.

Mega Shipping Calls for Mega Tracking

How do you track 46,000 vessels and 11 million shipping containers moving among 4,000 global ports? Information Builders’ business intelligence software and iWay Software’s enterprise integration solution – coupled with Unisys hardware and best practices expertise – can help make such a colossal task a reality.

Only iWay can access all the databases and applications within your supply chain and warehouse the data…and Information Builders can uniquely provide intelligent reporting. So whether you want to track containers utilizing for example, our ESRI geographic interfaces, or look to our SPSS predictive modeling interface – Information Builders can create an RFID-based supply chain information center on the lightning fast Unisys ES7000 server. Once employed, RFID moves from buzzword to business driver across your enterprise.

Fast Figures $26.3 trillion – total world Gross Domestic Product for 2003 17 – number of handoffs associated with the average international container, compared with eight for a domestic container 100,000 – average number of documents tracked by a large container vessel 80% of the world’s cargo moves each year by sea 445 seaborne piracy attacks in 2003 5% of the 15 million containers hitting U.S. shores that are physically inspected 80% of U.S. trade passes through three ports Double the number of air shipments between 1993 and 2002, making air the fastest growing mode of transporting goods around the world 5¢ – estimated price of RFID tags for clothing by 2006