Apr 16, 2007The news that EPCglobal's board has ratified the standard for the Electronic Product Code Information Service (EPCIS) is big news, because it completes the major elements of the EPC system. The other key elements are the air interface protocol (the EPC Gen 2 standard) and the numbering scheme used for serialization (the tag data standard). But it would be foolish to expect that all companies will soon be using EPCIS to share data, or that the standard will spur adoption of EPC technologies.
The EPCIS is a set of network standards that enables companies to share EPC data over the EPCglobal Network securely. Unlike America Online in its early days, the EPCglobal Network is not a closed system. It is, perhaps, best described as a layer within the Internet that allows EPC data to flow seamlessly and securely.
So who should care? Any company in any industry that shares supply-chain data with partners should care. Today, data is shared from point to point, often by different means and sometimes in different formats. For example, a consumer products goods manufacturer sends advance shipping notices (ASNs) to Retailer A using standard electronic data interchange (EDI), to Retailer B using AS2, and perhaps to Retailer C by fax or a text file. The retailers send back confirmation of receipt of the goods and eventually point-of-sale (POS) data, but each retailer uses a different format, which makes it hard for the manufacturer to aggregate the data and assess demand for its products across all retail chains.
Adoption of the EPCIS across an industry would enable computers to communicate automatically with one another and pass data back and forth—with the right authentication—automatically. So instead of sending some ASNs via EDI and some via AS2, the process could be automated. Tag reads at dock doors could automatically trigger software to send an ASN in the right format to the retailer's EPCIS.
Similarly, instead of receiving POS data in different formats and trying to harmonize them, a manufacturer could receive POS data from all retailers in the same format and have it deposited in an EPCIS database. The manufacturer could then pull that data from the EPCIS into enterprise resource planning applications to generate replenishment forecasts or logistics planning. Or the manufacturer could use analytical tools to determine how its processes could be made more efficient.
Essentially, EPCIS could replace all the different formats and vehicles for sharing supply-chain data with a more standardized and efficient way to communicate. Sounds great—but don't expect everyone to run out and set up EPC databases with EPCIS front ends to manage communication. Many early adopters have been testing this network architecture, and they tell me they see the potential benefits, but a lot of work needs to be done to make sure they can scale the system across their complex supply chains.
Another issue is the volume of RFID data being shared. If you are slapping tags on 30,000 cases a year and sending them to a retail partner, you probably don't need an EPCIS. The EPCIS was developed as a means of sharing massive amounts of serialized data. It will be a couple more years before most CPG companies reach the level of data volumes that would require them to switch to an EPCIS. Pharmaceutical companies will be close behind (or perhaps slightly ahead), but other industries will take even longer.
I would expect to see the early adopters implement the EPCIS standard in a limited way and then expand it as they grow their EPC rollout. But clearly, the standard makes it possible for more software companies to get into the RFID market and build applications that leverage the data and networking standards EPCglobal has created. That is probably the most important thing about the standard's ratification. Standards enable the creation of new applications, new applications drive business value and value drives adoption.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.