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What's In Your Supply Chain?
Recent reports suggest companies could face significant lawsuits because of an inability to know what their suppliers are doing.
Mar 10, 2008—Capital One, a financial services company, has been running ads for the past few years in which consumers suffer a wide variety of bad experiences—in one, for instance, a family skis in the summer when there is no snow—because they don't have a Capital One credit card, so they don't earn reward points or they suffer black periods when they can't use their points.
The ad asks, "What's in your wallet?" Lately, however, the question running through my mind has been, "What's in your supply chain?"
These unfortunate incidents underscore the challenges companies face in an increasingly integrated global supply chain. Wal-Mart and other retailers are being sued over the dog food poisonings, even though they were not the parties at fault—rather, an importer had reportedly changed the labels to hide the fact that potentially harmful ingredients had been used.
Companies are going to increasingly demand more information from their suppliers to protect themselves from lawsuits, their brands from negative publicity, and the public from harm. And if they don't, governments will demand more information from them. The U.S. Senate passed a tough measure last week that will require a higher number of inspections of toys by the Consumer Products Safety Commission. (The House passed a similar bill last year.)
We are moving inexorably toward a world where everything in the supply chain is being more closely tracked. Radio frequency identification is going to be a greater part of that over time, but 2-D bar codes can also be employed to capture serialized information about parts and materials that are going into products.
Clearly, we're going to see a rapid rise in the adoption of automatic identification technologies over the next decade. These technologies could provide information on what suppliers are doing and what's going into their supplies, as well as reduce counterfeiting (see Counterfeiting is Everyone's Problem). But auto-ID technologies can only help if the data collected can be turned into actionable information and shared with business partners.
That's why I'm such a strong believer in standards—and not just within the RFID industry. I believe we need to develop standards that will enable any data collected automatically—whether by a passive RFID, active real-time location, 2-D bar code, ZigBee or Wi-Fi system—to be employed across supply chains, across borders and among trading partners.
That shouldn't be that difficult to achieve. If data can be output from these systems in a format compliant with EPCglobal's EPC Information Services standard, companies can use the data and software can create new applications, or modify existing applications to take advantage of all the data captured. That's what we should be working toward, because it's the only way you'll ever know what's in your supply chain.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.
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