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Collaboration Vital to Attain EPC's Potential
In a new report, leading retailers and manufacturers tout the benefits to be derived from an EPC RFID-enabled supply chain and outline the steps needed to realize those benefits.
Sep 07, 2005—Manufacturers and retailers must start preparing to share data with their supply chain partners now in order to maximize the potential benefits from deploying EPC RFID, according to a new report from industry group Global Commerce Initiative (GCI) and IBM Business Consulting Services.
The report, "EPC: A Shared Vision for Transforming Business Processes," is based on input from GCI members. Those members consist of some of the world's largest retail and consumer packaged goods (CPG) companies, including Wal-Mart, Metro, Target, Tesco, Lever, Kraft Foods International, Colgate-Palmolive and Johnson & Johnson.
The report outlines where EPC data should be collected and shared throughout the supply chain, and how that data can improve operating performance among supply chain players. It is available, free of charge, at GCI's Web site.
In addition to laying out the potential benefits from deploying EPC RFID, the impetus behind the report is to prompt companies to start determining how EPC data will be supported within their own companies and exchanged with others.
"This is the first time retailers and manufacturers have come together as a group to see what needs to be done to benefit the whole supply chain," says Peter Jordan, director of international B2B strategy at Kraft Foods and cochairman of the GCI Steering Group. "This is an action plan," he says. "There has to be long-term planning for EPC to have maximum effect, and we are asking people to think about the next phase."
The report stresses that EPC RFID will deliver maximum benefits only if companies throughout any supply chain can exchange data collected using RFID easily across corporations.
According to the report, key lessons can be learned from the way bar codes were deployed and used for the past 20 or so years. In particular, it says, there needs to be industry-wide standards in the technology deployed, widespread adoption of the technology and open sharing of data between supply chain partners.
In this last respect, manufacturers are keen not to miss out on vital information from retailers, as they did during the adoption of the bar code. "Bar code could have achieved more than it did, but manufacturers didn't get the quantity or the quality of data back from retailers," says Jordan.
With EPC and RFID, retailers and manufacturers must agree that a different route be taken. "There has to be a change of emphasis to get value with EPC. What can we do this time that is different from the past, to enable access to information in a standard way—and more quickly?" says Sachin Shah, partner at IBM Business Consulting Services.
According to Jordan, use of the EPC network will reach critical mass in about three to five years, but issues must be addressed today. "The EPC network is not there today, but the groundwork and thinking about the next phase has to be done now," he says.
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