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SAP Takes RFID into the Enterprise

SAP's Auto-ID Infrastructure will not be a new application or database but a "real-time information layer" that integrates with current—and future—enterprise IT environments. It will offer users two-way communications and control of readers and tags, providing functions such as remote updating of product pricing or routing instructions.

A key function of the infrastructure will be managing the massive amounts of data that will be generated by item-level tagging. But SAP says its Auto-ID Infrastructure will have other important functions. It will capture, filter and publish data—including product location, shelf life, price and inventory level—from many readers. It will aggregate and store information about shipping containers, pallets, cases and items. And it will receive and maintain data specifying the location and physical relationships between items, such as a particular item's location within a particular container.


SAP demo at Sapphire
SAP has relied heavily on its customers for input on how best to design applications that support RFID. It has hosted numerous workshops with key customers to define their priorities, decide which applications they need, determine how to enable existing applications to support RFID and look for new applications that can be created through EPC data. For instance, SAP plans to offer EPC-related applications that support other vendors' supply chain products. "Our customers tell us they will need to synchronize this data in third-party systems," Blanchard says. "We designed the infrastructure to do that."

The first step will be to provide basic auto-identification capabilities to customers' existing SAP systems. Then SAP will explore new retail and manufacturing applications to take advantage of EPC data. These applications include such things as shipping and receiving processes, automated order confirmation and payment, work-in-progress visibility, manufacturing cycle time, and automatic cross-docking, a process in which a finished good from the manufacturing plant is delivered directly to a customer with little or no handling in between. "We see some clients getting into one-day to two-day manufacturing turnaround, from the point where an item is out of stock to actually producing a finished good," Blanchard says. "The challenge is to try to identify new applications—not just change the way things are done now, but fundamentally change and improve them."

One of the first commercial RFID product offerings from SAP will be an automated replenishment system based on RFID and software agents (also known as smart or intelligent agents), which take data gathered by RFID readers and automatically use that data to take actions previously performed by people. SAP demonstrated an automated replenishment system based on item-level RFID tagging and software agent technology at its Sapphire user conference in 2002 (see SAP To Demo RFID Replenishment).

Working with the BiosGroup (which was acquired by NuTech Solutions, based in Charlotte, N.C.), SAP developed agents that interact with its supply chain applications to automatically replenish stocks when RFID systems detect that supplies are running low (see Agents Key to RFID Supply Chains). The demonstration showed how the agents tracked the removal of tagged items from a shelf, and how software agents, monitored this compared with preplanned stock levels. When more items than expected were removed from the shelf, the agents forecasted that the item would soon be out of stock and triggered a replanning cycle so goods could be replenished more quickly. SAP developed the application with Procter & Gamble, Sun Microsystems and an unidentified retailer.

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