Executive Briefings

RFID's Role in Today's Supply Chain

Use of RFID tags at the item level is upstaging case and pallet tagging among many retailers, says Tom O'Boyle, director of RFID at Barcoding Inc. O'Boyle explains the benefits derived from item-level tagging and looks at other innovative applications for RFID, including hybrid systems that mix active and passive tags.

Applying RFID tags to individual items gives most retailers a bigger bang for the buck than tagging cases and pallets in the warehouse, says O'Boyle. Item-level tagging not only allows retailers to track high value products, it also enables them to see what is on the store floor or in the back room and enables a quick inventory count, he says.

Counting is traditionally a manual process that entails someone actually looking at the inventory and checking it off on a count sheet, he explains. "With RFID we can do that kind of count very quickly with fewer people," he says.

The success of item-level tagging in retail, coupled with the evolution of more sensitive chips and readers, has driven a broader adoption, says O'Boyle. "We are seeing item-level tagging in areas we would not have seen it before," he says. "There is a real evolution in the types of assets and commodities that are being tagged."

Another trend is the development of systems that use both active and passive RFID tags, says O'Boyle. Active tags typically are used to pinpoint the location of high-value mobile assets because they have their own power source and relay their position without being scanned. Passive tags have no power source and must be scanned or "read." Passive tags are used on inventory or consumable items that are scanned at certain critical points in the supply chain, such as moving from truck to warehouse or from back of store to the store floor. "More and more we are seeing a hybrid approach, where a company might use active tags to find highly sensitive and more expensive assets, such as a patient bed in a hospital," says O'Boyle. "To track certain commodity items it might use long-range passive tags and would employ short-range passive tags for security control, such as entering and exiting doors. "We see all those being combined together into single major RFID system, as opposed to individual systems that are not necessarily tied together," he says.

Many industries are starting to work on standardizing the data on RFID tags, O'Boyle says. For example, many companies in the automotive industry are using RFID tags on returnable totes. "There now is a move to standardize how the information on totes is encoded, which will enable the owner of the tote to be identified so it can be returned to the right location," he explains. Tags and readers already follow a standard so the next step is to have industries develop a standard for the data. "We are starting to see more and more industries begin to address this issue."

Data standardization is not an easy task, O'Boyle notes. "It is difficult to get individual companies that have their own ideas about how they want to use the data to come together with their competitors to collectively agree on a standard," he says.

The Department of Defense showed how this can be done, says O'Boyle. "DOD not only specified how tags and readers needed to work, but also established a data usage standard that was tailed onto EDI transactions. A supplier to DOD had to tag in the right way and send the data up to DOD to be used on receipt. That was a significant change, but it provided a building block for other industries to follow."

To view the video in its entirety, click here

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Applying RFID tags to individual items gives most retailers a bigger bang for the buck than tagging cases and pallets in the warehouse, says O'Boyle. Item-level tagging not only allows retailers to track high value products, it also enables them to see what is on the store floor or in the back room and enables a quick inventory count, he says.

Counting is traditionally a manual process that entails someone actually looking at the inventory and checking it off on a count sheet, he explains. "With RFID we can do that kind of count very quickly with fewer people," he says.

The success of item-level tagging in retail, coupled with the evolution of more sensitive chips and readers, has driven a broader adoption, says O'Boyle. "We are seeing item-level tagging in areas we would not have seen it before," he says. "There is a real evolution in the types of assets and commodities that are being tagged."

Another trend is the development of systems that use both active and passive RFID tags, says O'Boyle. Active tags typically are used to pinpoint the location of high-value mobile assets because they have their own power source and relay their position without being scanned. Passive tags have no power source and must be scanned or "read." Passive tags are used on inventory or consumable items that are scanned at certain critical points in the supply chain, such as moving from truck to warehouse or from back of store to the store floor. "More and more we are seeing a hybrid approach, where a company might use active tags to find highly sensitive and more expensive assets, such as a patient bed in a hospital," says O'Boyle. "To track certain commodity items it might use long-range passive tags and would employ short-range passive tags for security control, such as entering and exiting doors. "We see all those being combined together into single major RFID system, as opposed to individual systems that are not necessarily tied together," he says.

Many industries are starting to work on standardizing the data on RFID tags, O'Boyle says. For example, many companies in the automotive industry are using RFID tags on returnable totes. "There now is a move to standardize how the information on totes is encoded, which will enable the owner of the tote to be identified so it can be returned to the right location," he explains. Tags and readers already follow a standard so the next step is to have industries develop a standard for the data. "We are starting to see more and more industries begin to address this issue."

Data standardization is not an easy task, O'Boyle notes. "It is difficult to get individual companies that have their own ideas about how they want to use the data to come together with their competitors to collectively agree on a standard," he says.

The Department of Defense showed how this can be done, says O'Boyle. "DOD not only specified how tags and readers needed to work, but also established a data usage standard that was tailed onto EDI transactions. A supplier to DOD had to tag in the right way and send the data up to DOD to be used on receipt. That was a significant change, but it provided a building block for other industries to follow."

To view the video in its entirety, click here

Keywords: supply chain, it supply chain, rfid, supply chain management, it supply chain management, supply chain management it, supply chain management scm, inventory management, inventory management it, inventory control, warehouse management, logistics & supply chain, inventory management systems, logistics it solutions, warehouse management systems, supply chain systems, wms warehouse management, retail supply chain