Building Smart RFID Networks

By Hersh Bhargava

June 11, 2007—RFID technology leads us to a world of connected objects, enabling inventory to speak for its presence and drive processes, as opposed to processes driving inventory. This paradigm shift opens up new avenues and approaches to improving process efficiency, inventory management and business intelligence.

RFID networks enable businesses to build event-driven applications and react to real-time information. If business processes start working with real-time events, enterprises can become more efficient and lean.


To have a successful RFID implementation and reap true benefits, businesses must first identify business goals, build RFID networks that provide visibility into assets and inventory, and collect RFID data and convert it into actions, perhaps in real time.

An RFID network generates a continuous stream of data. Because of its sheer volume, this data needs to be handled very carefully. In the world of connected objects, the goal is to have efficient RFID networks that provide the right information to the right application at the right time (the "3 Rs") and make enterprise-management systems event-driven.

Event-Driven Enterprise-Management Applications
For most companies, enterprise resource planning (ERP) systems keep track of the location and quantity of inventory, while supply chain execution (SCE) systems determine how much to produce, where to produce it and how to distribute it. Processes typically control the production and flow of inventory across the supply chain—a process-driven approach. In the world of connected objects, where RFID networks sense the presence (or absence) of inventory, business processes will become driven more by events than by processes. The receipt of a purchase order is an event, and it may trigger several business processes—such as manufacturing and logistics—upon its arrival. A shipment's receipt may lead to several Electronic Product Code (EPC) reads and trigger an electronic proof of delivery (ePOD) application, as well as updates to inventory counts in a warehouse management system (WMS), and the fulfillment of orders awaiting this receipt of shipment.

This fundamental paradigm shift, in which inventory drives processes, fosters efficiencies in the supply chain (or asset utilization) that could not have been achieved in a process-driven world.

Building event-driven processes is a very challenging task, one that requires a tectonic shift in thinking. It may require defining new processes and retraining personnel. Several technical or engineering challenges arise when dealing with a continuous stream of RFID data where time is an integral dimension. Conventional analytical tools have a hard time harnessing actionable intelligence from such data. The biggest cause is RFID data's very nature.