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The Big Picture

We are moving toward a world where business is done in one language, with one currency and with one system to track products.
By Bob Violino
Sep 07, 2003By Mark Roberti

Sept. 8, 2003 - A few years ago, I was hosting a panel discussion about online marketplaces at an Industry Standard conference. One of the panelists, an electronic commerce expert, said that we would never get to a world in which every company identified a particular part in the same way. I disagreed with him. Today, I disagree with him more than ever.

Let’s take a step back and look at the big picture. People can decry globalization all they want, but to facilitate business, we have been evolving since the beginning of humanity toward a world with a common currency and a common language. We no longer trade with animal teeth, bones and shells or even francs, liras and deuschemarks. And the Euro may not be the end of this process. Similarly, one reason people from Austria to Zambia speak English is because we need a common way to communicate to do business.

Over time, we've seen industries move toward more standardized ways of identifying parts and items. But we're a long way from an ideal situation. Even within the same company, diverse manufacturers, such as Emerson Electric and Honeywell, can have five or even 10 ways of identifying the same item internally. That makes it hard to analyze purchasing decisions and even harder to pool purchases to save money.

The Electronic Product Code is sometimes maligned as a pie-in-the-sky idea dreamed up by academics who don't understand the real world. Many people say the world never will agree on a single global numbering scheme across all industries. Many people also said Europe would never have a common currency. I’m sure they can’t begin to imagine that one day we may have a single global currency.

Obviously, adopting a standard way of tracking products won’t happen overnight. Companies can't just throw out all the software and IT systems they've built to track items using the Universal Product Code, Global Trade Identification Number, International Standard Book Number or other numbering schemes. To succeed, the EPC has to be a bridge between these existing schemes and some future scheme that covers the universe of items.

The Uniform Code Council and EAN International, the two bodies that have taken over commercialization of EPC technology, understand this. And even if they didn't, their members would soon make it clear to them. They've already come up with a method of mapping EPC numbers to GTINs, and no doubt practical ways will be found to map other numbering schemes to EPCs. This will create a way of communicating across industries and allow companies to continue to do business using their existing numbering schemes.

The EPC is seen as something driven mainly by the consumer packaged goods and retail industries. But there are tremendous benefits for all industries if they can map existing numbering schemes to the EPC. For instance, if you supply electronic components to the computer industry, it will cost you less to track your shipments if you can use the same technology as other industries because the higher volumes mean the cost of the hardware will be cheaper. Moreover, if you want to begin selling your components to the auto industry, it will be easier if they can identify your parts using their existing tracking system.

CEOs now have to deal with two conflicting impulses. While they don’t want to replace a lot of hardware and software to be able to track items with EPC tags, they recognize the value of having a single global numbering system. I believe AutoID Inc. and the RFID industry will find ways to make it possible for them to enjoy the latter without having to endure the former. When that happens, the world will be a giant step closer to a single way to identify items globally. That will remove a hindrance to global trade that is almost as significant as language and currency.

Mark Roberti is the Editor of RFID Journal. If you would like to comment on this article, send e-mail to mroberti@rfidjournal.com.

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