May 02, 2006"We're all aiming at the wrong targets, and we're moving at a glacial speed." Those words of warning were offered by Jim Noble, group vice president and CIO of Altria, at RFID Journal LIVE!'s opening keynote session, Monday evening at the MGM Grand Conference Center in Las Vegas. The name 'Altria' might not ring a bell to some, but the many consumer brands the company owns certainly would, among them Marlboro, Kraft, Maxwell House and Nabisco.
The 'wrong targets' Noble referred to are EPC tags and RFID interrogators, or RFID-tagged products. The right target, he explained, is collaborative commerce. He believes the excuses he hears, about the many years it will take RFID to evolve, hold no water.
"People will tell you conventional wisdom is that this stuff will take a long time to evolve," he said. "I totally disagree. My point of view is that we're already way behind in implementation [of RFID], and we need to pick up the pace dramatically."
Altria has been studying how it might use RFID to improve its supply chain and logistics operations. Noble reported that as far as his company is concerned, RFID's value is in using item-level tagging to track everything from cartons of cigarettes to jars of mayonnaise. Still, Altria won't deploy RFID at the item level without the collaboration of its supply chain partners. "We can't do this ourselves," Noble told the audience. "I have 6,000 people in my IT team, so there isn't a lot we can't do ourselves, but on this occasion, we're just a link in the chain and we can't make the chain work without all of our business partners willingly engaging."
Noble said Altria would consume 80 billion tags a year if it deployed RFID corporation-wide for item-level tracking. Just to get started with item-level tagging, however, the company and its supply chain partners would first need to lay a tremendous amount of groundwork around the data synchronization of numbering systems between Altria and its trading partners, as well as an agreement among the suppliers and retailers regarding technology standards.
Noble was joined in the keynote by Kevin Humphries, senior vice president of information technology for FedEx, who spoke about the ways in which the shipping company is already using RFID. Humphries also addressed the significant value RFID could provide in tracking parcels.
FedEx is conducting a number of pilot tests to determine where deploying RFID for package tracking could provide the greatest value, Humphries said. In one particular pilot, sensors (such as temperature monitors) are used to track the condition of perishable goods and other shipments.
However, Humphries pointed out that the passive-tag technology the company is testing is far from honed. At a pilot test site in Springfield, Mo., FedEx is seeing read rates of more than 80 percent with EPC Gen 2 UHF tags and readers, though the technology is not performing as well as needed for real-world deployment. "At one dock door, we can get read rates in the high 80s [percent] but only with a lot of engineering work. That doesn't meet the model of deploying the technology in thousands of dock doors," he says.
While Altria and FedEx are looking to RFID to address different business problems, and are taking alternate approaches to testing and deploying the technology, both Noble and Humphries agreed that the technology will be of no real value without technology standardization and the cooperation of business partners. "There are many customers who ask us if we support RFID, but there are millions of others who don't use the technology," Humphries explained.
Still, Humphries said he expects standardization to enable wider use of the technology. Noble, meanwhile, said that the collaboration of Altria's business partners regarding item-level RFID tagging will transform his company's businesses. Track and trace applications of RFID at the case and pallet level, on the other hand, are helpful because they can be used to fight the introduction of counterfeit products, but they can not justify the costs of deploying the technology.
