Mar 21, 2005Virtually all the early users of radio frequency identification technology have made the same basic observation: There are real benefits to be gained by assessing internal business processes to determine current deployment priorities, needs and capabilities. Businesses that begin now to prepare for RFID--whether they plan to deploy immediately or at some future point--will gain competitive advantage. A needs-focused analysis of business processes, systems architecture and internal capabilities will grease the wheels for a prompt and decisive implementation later.
Lessons learned from early adopters, as well as uncertainty with new and evolving standards, all would indicate that you should wait to deploy RFID. This makes it the perfect time to assess.
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Assessment will enable you to take a hard, objective look at your interior business operations, identify their strengths and weaknesses, make corrections as necessary, and project results. And when you complete the assessment process, your organization will be miles ahead in terms of readiness to implement RFID technology. Your analysis can be conducted within the following seven-step framework:
1. Assess Your EPC Numbering Options.
New RFID tag standards have only recently been released (December 2004), and tag manufacturers have not yet rolled out new-generation tags that comply with the just-developed guidelines. That does not mean, however, that you cannot take proactive steps to prepare for the tag-related decisions you will make in the very near future. An excellent immediate starting point would be to evaluate your Electronic Product Code (EPC) numbering scheme. By determining variables such as the desired method of numbering and tracking cartons, cases, and pallets, relating EPC numbers to internal inventory numbers, and addressing cross-referencing and unit-of-measure issues, you should be able to start tagging and scanning quickly.
If these issues are still unresolved, there are decisions you can make now to initiate an effective numbering scheme. The same is true relative to all other components of a typical RFID system. Work your way back up the chain to highlight what you can do now to improve your internal processes. Remember that when you do implement RFID, you will have a smoother implementation and get benefits sooner.
2. Assess Management of Your RFID Readers and Devices.
You will have RFID readers on your shop or warehouse floor that you will need to configure, monitor and control. The readers must be part of a network. You will either have to create a floor network or need to integrate the new readers into your existing network (or perhaps set up a new network to operate in conjunction with your existing network).
An RFID reader emits a radio beam and records every tag it finds within range. A reader’s range must match the physical characteristics of the selected RFID tags, pallet densities and conveyor speeds. Take care to scan only the tags that you want at a particular point in time. Some RFID shipping systems, for example, require wire mesh between truck docks to ensure that only items passing the proper doorway are scanned by the designated reader.
This component involves two kinds of issues to resolve: reader selection issues and reader control and networking issues. Since new readers are sure to follow the new tags, the best approach may be to set readers aside in order to focus on your network in the assessment. That way, you will already have identified any obstacles to reliable, high-speed networking that may currently exist, and you will be better prepared to select your new readers when they become available.
In today’s business world, distributed systems are ubiquitous. How far does your current network extend into your environment? Can you control, monitor, configure and manage network devices centrally? Is there a network already in place that can be added to or upgraded? Or must you set up the network from scratch?
Your RFID readers will be part of a network. If that network is already in place, it will be easier to add to or extend it. If you do not currently have a network in place, now is the time to begin its planning and construction.
3. Assess Management of Your Data. Early RFID pilots have shown that you can expect to be inundated with data--real-time, streaming data about cartons, cases and pallets. All of that information will have to be managed.
Data management is hardly a new issue. If you have been scanning UPC bar codes, you will be thoroughly familiar with the task and its demands. If you have never scanned the UPC codes you created for your trading partners, however, you have missed a significant opportunity. You were compliant, but you failed to gain competitive advantage as a result.
RFID will present the same kinds of challenges and opportunities, and this will be a good time to evaluate your readiness. What transactions that are currently captured manually could be automated? Does automation place stress on your current process? If you have begun to resolve your unit-of-measure and cross-reference issues, what new transaction automation opportunities might your solution present? Remember, RFID will require your data capture and management processes to handle far more information at far greater speed. But if you begin to address these issues now, your transition to RFID will be smoother and far more cost-effective.
4. Assess Integration of Your Business Applications.
Moving business transactions into and out of your main business system is nothing new. But RFID will place substantially more strain on your capabilities. How good is your current system at handling large transaction flows reliably and at high speed for you and your trading partners? Do you have a single main business system, or have you linked several systems together? If you now use several different systems, you will have more to assess in preparation for an effective roll-out. You will need to accurately determine how well-integrated to one another your multiple systems are, because their linkages represent the most vulnerable points of your transaction flow..
Virtually every business system comes equipped with, or can easily be integrated with, some type of electronic data interchange (EDI) system. And since EDI has been with us for more than a quarter century, many new application-integration challenges and opportunities begin by using EDI as a model. Remember: By definition, EDI was (and still is today) a batch interface. Are you going to dumb down the real-time data delivered by RFID to an hourly batch? Will that be the highest and best use of the enhanced data-capture capabilities inherent in RFID? Probably not.
Does your application vendor provide integration support, or are you using third-party products to tie multiple applications together? Are you running all your applications from a single vendor, or have you adopted a “best of breed” approach?
Can your existing integration systems handle your current transaction volumes with capacity to spare and with room to grow? Are you already a real-time enterprise, or are you posting critical transaction data after hours of delay? Are you using a common integration framework, or are you building and supporting custom integrations one at a time?
5. Assess Integration With Your Trading Partners.
EPCglobal technology is a key component of RFID capability. EPCglobal enables trading partners to see one another’s transactions as they move through their respective supply chains. How well are you integrated with your trading partners?
The use of extensible markup language (XML) has greater application potential than does EDI because XML allows for real-time, self-describing events. Has your enterprise begun to migrate from EDI-formatted batch transactions to XML-formatted real-time events? RFID is going to accelerate this migration.
Integration among trading partners is built on modern business-to-business transport protocols, and on the management of trading-partner profiles. If you are just beginning to experiment with an EDI-Internet Integration (EDI-INT) system to exchange data with your partners, then you may not be able to keep pace as this movement gathers speed.
In the beginning of this new market, most EDI vendors lagged behind, while early third-party business-to-business providers rapidly emerged. Today, the EDI vendors who failed to adapt are gone, and most remaining EDI vendors are becoming more comfortable with XML and with use of the Internet for transport.
That does not mean you are finished, however, since your EDI application may be linked to a series of old batch interfaces into your existing applications. You must be prepared to operate in real-time, and you must do so seamlessly, end to end.
6. Assess Management of Your Processes.
Business process management is the holy grail of many application and integration vendors today, including RFID vendors. Most integration projects begin by moving data between disparate applications. As the integration project’s speed and complexity increase, it becomes increasingly important to utilize a single process that updates multiple applications.
How close is your operation to seamless, straight-through processing of transactions? Can you carry out a transaction automatically, or must you have people along the way to check and recheck the accuracy of transactions?
Are there some high-volume processes that you can run with minimal operator intervention now? Will your present business processes enable you to increase automation and to move closer to a straight-through process when you deploy RFID? If you evaluate the quality and characteristics of your business process management now, you will be able to determine what adjustments will be necessary to effectively handle more processes and more RFID transactions later.
7. Assess Your Scaling Capabilities and Management of Architecture.
Early RFID pilots have shown that you must be able to scale up in order to handle volume. And you must be able to administer remotely each individual RFID reader in your network. The potential volume of data with which you will deal is truly staggering, and you must be prepared. How flexible are your systems? How quickly can you adapt to volume increases? How quickly can you adjust to changing customer requirements?
This is probably not the first time you have heard the expression “the agile enterprise.” Relative to RFID, enterprise agility is exactly what is required. You will need to adapt to changing business requirements, and you will need to do it in weeks instead of months.
The old barriers must be broken down. You will need to find and eliminate bottlenecks in your existing systems while you have time. If you initiate an RFID needs assessment now, you will be better prepared to begin deployment later. You will have positioned your business to leverage significant competitive advantages because you will already have assessed the underlying business processes. If you wait, or if you try to implement RFID under the gun from your main supplier, you will surely find your bottlenecks. But you will then be forced to fix them on the fly. And on-the-fly repairs and quick fixes under pressure rarely, if ever, succeed long term.
So what are you waiting for? Stop delaying, start preparing!
George Spohrer is an executive with Crowe Chizek and Co., a consulting, risk management and technology services firm based in Indianapolis, Ind. To comment on this article, send e-mail to
gspohrer@crowechizek.com, or click on the link below.
