Jun 19, 2006
Is RFID reshaping Supply Chain Management?
If you go by the talk of the town or are collared by the US Department of Defense or Walmart, then chances are that RFID is one of those uber initiatives that are top priority. From my viewpoint, which is from that of a large warehouser (GENCO is a large warehousing company principally) and that of a 3PL provider, RFID is at the pilot stage but nothing more than that.
What RFID does of course, in theory, is create a feedback situation i.e. if you’re aware or even comfortable using an analogy from Control Theory. In the past, the only recourse that managers typically had to determine whether something was stocked in the warehouse was to trust that the ERP/WMS system said that it was so. Frequently, such trust could often turn out to be misplaced, the magnitude of the error quite likely to be directly proportional to the state of completion/success/health of the ERP/WMS processes.
So along comes RFID (there are two main kinds: Passive and Active RFID) to close the loop in a sense that a WMS/ERP system could ascertain the actual state of affairs (I guess damaged tags being an issue not addressed yet).
Passive RFID refers to the technology that uses tags that need to be powered by the reader and then transmit information to the reader. They’re cheaper and will probably be the backbone of the first wave of adopters.
Active RFID refers to tags that contain power elements such as batteries and transmit information to the reader by themselves and also can be linked to other sensors (such as temperature/pressure sensors).
No new technology comes into being without a wrangle over standards. However, RFID seems to have escaped the brunt of such a battle. The EPCGlobal standard for RFID is the standard for embedding information in RFID.
What is of great interest to me is the increase in SKU level informaiton that is going to at once flood all levels of the supply chain. In order to manage a supply chain information, one thinks that one would require accurate and detailed information. That will quite likely happen with the widespread adoption of RFID. However, what are also equally necessary are data collection, manipulation and reporting tools (such as those from Business Objects or the like) that create a better reporting structure.