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RFID Demands a Measured Response

As RFID adoption grows, we'll need new metrics to understand and fully realize the technology's benefits.
By Oliver Hedgepeth
At the convocation, Simon Langford, Wal-Mart Stores executive VP and CIO, said RFID's current benefits are just the "tip of the iceberg." The history of computer technology's insertion into logistics and supply chain activities seems to create such icebergs of benefits, as we have seen from the 1960s to the present. And with the global complexity of Internet-based data transfers available to today's businesses, the logistics threads—the critical arcs and nodes in the supply chains—may produce a new set and quantity of data, as well as benefits. How to manage and measure the use of the emergent RFID databases is still an unknown. Given that bar codes speak a dozen times in a product's lifetime, while RFID codes speak 200 to 1,000 times a second, the thread between measuring RFID supply chain performance and achieving supply chain management benefits may become a study into complex-systems behavior.

A few standard metrics for bar codes do exist, such as product number and retail price. There may possibly be hundreds of metrics, meanwhile, for an RFID tag's encoded data. These include a product's date of manufacture, its supply chain entry and exit points, the last location it was processed and its on-sale and expiration dates.

So, how do we find these metrics? We start with a systems approach, looking at the RFID functional and technical parameters, the goals and objectives of their use. The cybernetic landscape—that is, the communication links and threads along the supply chain network arcs and nodes for the flow of goods, information and cost—should help us examine the span of a product's supply chain, from its strategic production-planning system and its production to the dock doors in a distribution center, and on to the point of sale where a customer purchases it.

Metrics for RFID, then—much like transportation—are set to be a derived demand. Transportation engineers discuss how people's desires for goods and services actually create a demand for transportation, and how communications is a replacement for transportation. We see today that the desires of people, or of organizations such as Wal-Mart or the U.S. Defense Department, for goods tracked and traced in real-time is creating a demand for new metrics, new units of measurement, new understanding of the concept of supply chains, and new concepts of outsourcing logistics services. As such, RFID is creating a new demand, and metrics is a key part to understanding and responding to that demand. Communications technology such as the cell phone is essential to transportation and logistics services, and possibly as a new partner with RFID. New laws on the use of the cell phone are emerging—and the freedom of using your cell phone has new boundaries on usage. What will those boundaries be for RFID five years from now?

USER COMMENTS

Chris Kapsambelis 2006-04-14 03:35:12 PM
RFID Hype Professor Hedgepeth joins a long list of academics predicting great advancements of Supply Chain capabilities based on a misunderstanding of RFID. RFID, in the Supply Chain, is by necessity limited to UHF passive technology. This technology has been shown to be incapable of providing Six Sigma accuracy in reading groups of items. Items must be read one at a time (Singulation). While UHF Passive RFID may be marginally better than Barcode in reading items on a conveyor belt at high speed, it will not result in the continuous interrogation of the item throughout its life in the Supply Chain as originally envisioned. The ability to track an item is not attributable to RFID, but to the EPC numbering system. The EPC numbering system can be used equally well with barcode, and it is currently being used to backup RFID for case goods. As for being able to count items faster with RFID, this capability was envisioned as a byproduct of group reading. Since every item has a unique serial number, a group read can be sorted and filtered into an accurate count of the group. But group reading is not accurate and Singulation must be employed. With Singulation, RFID is no faster than Barcode. To achieve what the professor predicts requires the use of Active RFID. Active RFID is not practical for item level tagging.

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