For the last three years Radio Frequency Identification (RFID) has been the hot topic in data capture. Not surprisingly, because RFID is a technology that provides relatively easy transfer of very large amounts of data making it possible to track and trace items in the supply chain to an unprecedented degree.
The flexibility and speed with which data can be captured using radio far outstrips earlier technologies, such as bar code scanning, making RFID a natural choice for the kind of fast moving, responsive supply chain networks that globalised industry increasingly requires.
However, the expected benefits of RFID have not been easy or straightforward to realise. Much debate about the technology has centred on costs, technical issues and on the merits of RFID compared with other ways of collecting data.
Although individual companies have gained considerable experience in testing or implementing RFID technology, there is a lack of available practical knowledge about the introduction of RFID in Europe.
The European Union has even set up a body called Coordinating European Efforts in Promoting the RFID Value Chain (CE-RFID) to try and spread the word about RFID. One of the key challenges for companies, according to CE RFID, is to create guidelines for the use of the technology in specific applications.
”We need better framework conditions so that the immense capability of this technology can be used. In particular, additional UHF frequencies for RFID will be required,” says Dr Gerd Wolfram, coordinator of CE-RFID and managing director of MGI Metro Group Information.
Executives such as Wolfram are particularly concerned about integrating RFID with existing business processes and technologies. For many supply chain managers the debate has shifted from whether or not RFID is a silver bullet that can fix all their supply chain problems to more practical questions about how best to deploy it in warehouses and transport systems alongside existing technologies such as voice, bar codes and ERP software.
”In the race towards efficient logistics, it is increasingly important to know of, and interact with, the processes and tasks that are being executed on the shop floor,” says Jan Vermeesch, vice president marketing, of systems integration company Zetes Industries. ”It is essential, because if decisions are being made on real-time information, you should be able to act accordingly and if necessary, intervene in processes and activities – on the spot. This can be achieved by using auto-ID technologies.”
Vermeesch claims that one of the reasons why companies have been slow to adopt RFID is that it has been the subject of too much hype from companies that have been navel gazing: concentrating on their own technologies rather than seeing how they could be integrated with other systems. The emphasis in RFID has been in deploying open loop systems, claims Vermeesch. ”People look up and down the supply chain and if no one else is jumping then they are not jumping. A convincing business case can be achieved if you integrate RFID properly.”
Some companies are already introducing innovative combinations of RFID with other technologies. Take logistics provider Cordes & Simon, which is part of the German transport company System Alliance. The firm has invested in a system at one of its six warehouses that combines bar code scanning, video imaging and RFID to locate lost packages.
Locating the whereabouts of packages that have got lost in a warehouse or distribution system can be an extremely expensive business. Cordes & Simon has applied complex technology to solving an age old problem by providing an incontrovertible record of what happened to each item in its warehouse.
Items arriving at the firm”s facility in southern Germany are labelled with a bar code containing an ID number. First of all the packages are scanned with a wireless hand held device and the data sent to the firm”s warehouse management system. But in addition each scanner is tagged with an RFID chip that transmits the tag”s ID number to the nearest of 22 readers positioned high up in the warehouse.
The readers measure the elevation and angle of the transmission from the tags and the time it takes for a transmission to arrive in order to work out the location of each tag to within 15 centimetres.
The warehouse floor is also covered by fixed video cameras. Using the location information derived from the RFID tags on the scanners, each RFID read is associated with the camera that recorded the worker as he or she scanned each package. The system stores the camera picture, shipment ID, camera ID, date and time.
Later, if a shipment is missing, Cordes & Simon users can go to its web site, enter the shipment ID and receive a picture of each related scan as it took place in the warehouse. They can then fast-forward the pictures recorded by the camera to see what happened to the shipment. If the shipment moves out of range of one camera, the system can be set to switch automatically to the adjacent camera to continue reviewing the shipment”s movement in the warehouse.
Raf Jezierski, marketing director for Vocollect Europe is also a strong advocate for this symbiotic approach to technology. RFID and voice are complementary technologies that enhance each other, he tells Supply Chain Standard.
RFID tags can provide much more information about products – their product code, size, manufacturing date, expiration date and so on – than conventional data collection techniques, Jezierski explains. Because the data associated with each tag can be readily changed it can be kept much more up-to-date. This combined with regular readings that establish a tag’s whereabouts provide a clear audit trail. Tags can also be placed on a wide variety of locations on individual items as well as shelves and containers.
”By allowing complete and accurate life-cycle tracking of a product, analysts claim RFID will create faster shipments, fewer errors, and cost savings that more than justify the expense of these systems,” says Jezierski. ”But far from clarifying the issues surrounding RFID, all this headline-grabbing attention has only muddied the waters – especially when it comes to the integration of RFID and voice technology.”
Jezierski maintains that information alone does not make business processes more efficient. RFID systems do not tell distribution centre workers what to do with their products or how to handle them, but instead the technology provides a two-way dialogue between the DC workers and the warehouse management system.
Instead of relying on paper lists or a handheld device display screen to relay information to be acted upon, workers use a more natural form of communication to carry out their assignments. This makes them more productive, more accurate, and safer as they move between tasks, whether they are operating with a stationary RFID reader, or a body-worn device.
On its own, RFID cannot tell workers what to do with products, while voice cannot extract detailed information about a product. But when companies combine the two technologies – creating the equivalent of a talking tag – they not only acquire the ability to direct product receiving, selection, replenishment, and other operations; they also get automatic product identification and verification.
Together, the potential productivity gains are large, says Jezierski, because a high proportion of errors are the result of items being incorrectly picked from a location. With the combined capability of voice and RFID, the team member can be notified immediately if a given pick contains the right items, is expired or has been recalled. This reduces the possibility of shipping incorrect or obsolete products.
Today there are many more voice systems in place in warehouses than RFID systems, simply because voice has been used in industrial settings for two decades. As RFID technology matures, more and more systems will be deployed together with existing voice applications. Just as barcode scanners, printers, automatic storage equipment and other material handling systems have been integrated with voice, it is possible to integrate RFID and voice as well.
Most RFID systems employ standard interfaces and can be connected to voice either through the existing network infrastructure or directly as peripheral devices. Eventually, as the size and cost of RFID systems decrease, it will be possible to purchase turnkey systems that have both capabilities.
Voice recognition is one of the more important technological advances in warehouse distribution in recent years, delivering up to 35 per cent increases in productivity, improvements in accuracy levels up to 99.99 per cent, providing additional worker safety and job satisfaction.
”Although still in the early stages, RFID promises to create similar dramatic returns,” Jezierski maintains. ”In the warehouse, specifically, the use of RFID readers can produce nearly 100 per cent inventory accuracy, eliminate the need for cycle counts and reduce out-of-stock emergencies. However, these exceptional gains will only be realised when RFID is used to improve complete business processes.”
Vermeesch of Zetes is convinced that it will not be long before integrated voice and RFID systems will be implemented, especially in applications such as goods receiving where voice is more limited and locations are tightly defined making it sensible to combine the two technologies. His company is already working on prototypes
While DC managers and supply chain directors wait for the cost of RFID to come down – which may take some time – they need not put plans for voice-directed work on hold. In order to deliver benefits, RFID implementations require the compliance of the entire supply chain, whereas voice can be applied at any point in the chain without requiring others in the chain to change their operations or make any changes to the consignment packaging or labelling.
”Voice applications can be implemented relatively easily; the payback on investment is typically realised within 12 months, and the accuracy gains of as much as 50 per cent in six to nine months – all more than justify the investment,” Jezierski points out. ”And as the ROI picture for RFID becomes clearer, these systems can be added for increased benefit without negating any of the original voice investment.”
Research firm Frost & Sullivan advises users adopt a similar, dual approach in the medical field where asset tracking and the monitoring of pharmaceuticals is key. RFID technology offers significant advantages in terms of patient and asset tracking and the prevention of drug counterfeiting, but hospital adoption remains slow due to cost, claims a recent report by the healthcare analysts.
Return on investment
However, RFID has the advantage over bar codes when it comes to durability, improved accuracy and reusability. The idea put forth in Advances in Healthcare Applications is to marry the two technologies together, so that they coexist and provide a proven return on investment. Both barcoding and RFID technologies should be used together to work towards an effective tracking system, the firm recommends.
”Even as RFID matures, it is likely that bar coding will continue to offer hospitals a proven, efficient and more cost-effective means of capturing data for a variety of applications,” explains Frost & Sullivan research analyst Sachin Thukral.
”Some of the applications are bedside medication administration, unit-dose labelling in the pharmacy, specimen collection at the patient bedside, specimen tracking and management in the laboratory, materials management and more.”
Hospitals are currently the largest buyers of RFID technology. The time saved on asset tracking has proven to reduce costs of maintaining inventory of medical equipment such as pumps, wheelchairs and diagnostic and monitoring equipment (also see ELA column page 12). Various estimates have shown that 20 per cent of capital in hospitals is occupied in assets, like these, that are easily lost or stolen. ”There is a great need to locate critical assets, people and equipment, in a timely manner,” says Thukral. ”There is also a need for more efficient staff workflow and patient throughput because of an inability to locate critical resources, and to get them in the right place at the right time.”
The focus for RFID is shifting away from large scale efforts to automate data capture based on mandates, towards more modest efforts to introduce the technology in tandem with complimentary systems. In future companies may well have a diverse range of technology working alongside RFID including barcode scanners and voice solutions working on a radio frequency network and contributing to the effectiveness of ERP or WMS host systems.
Raf Jezierski, Vocollect Europe
By allowing accurate life-cycle tracking of a product, analysts claim RFID will create faster shipments, fewer errors and cost savings.
Jan Vermeesch, Zetes Industries
It is increasingly important to know of, and interact with, the tasks that are being executed on the shop floor.