ARC 2004: Extending RFID investment beyond the cost

Boston, MA—If you’re not doing more than slapping a radio frequency identification (RFID) tag on a container or product, then you’re throwing away more than the cost of the tag, according to presenters at ARC Advisory Group’s meeting, “Performance Driven Manufacturing and Supply Chain Forum,” on June 23-25.

By Control Engineering Staff June 30, 2004

Boston, MA— If you’re not doing more than slapping a radio frequency identification (RFID) tag on a box, pallet, or product to comply with someone’s mandate, you’re throwing away far more than the cost of the tag. That view was among those expressed during ARC Advisory Group ’s meeting, “Performance Driven Manufacturing and Supply Chain Forum” on June 23-25, which included ample RFID discussion.

Dan Cadigan, project manager for BP Castrol’s RFID pilot, has found a way to make RFID work inside heavy corrugated boxes of five-quart plastic containers of oil, despite the liquid, metal seals on the container caps, and line rates faster than 600 ft/min. Tests and implementation at Castrol are seen as necessary to doing business, even though tags cost $0.50-1.50, because saying “no” to Wal-Mart’s business isn’t a likely alternative to complying with its RFID deadlines, says Cadigan. Despite some critical reports of 20% tag failure, less than 1% of tags failed testing, he adds. After working with IBM on tag location inside the box, he says there were no tags failures on the packaging line. Castrol then worked with International Paper to embed RFID tag in the walls of the boxes in the proper location.

BP’s to do list
Cadigan reports there are still some RFID-related interference gremlins to hunt down in the 900-MHz radio spectrum, which includes walkie-talkie transmissions, wireless communications for some onsite pumps, and some spurious, still-unknown failures on the loading dock. Areas of continued study include impact of future data movement from retailers back to Castrol over the corporate T1 line, along with expansion into other Castrol and BP applications. Other plans include an updated company privacy policy to include RFID and testing of handheld readers to help with mixed product pallets, which Castrol sees as a growth opportunity, notes Cadigan. A business case needs to be built to support the investments, but he anticipates expansion across more than 15 Castrol sites.

Get full use
Beyond compliance, as Castrol’s anticipated T1 connections suggest, RFID is one component in a demand-driven supply chain, says Steve Banker, ARC’s service director for SCM. “Demand-driven supply chain demands smarter workers with better information to operate in this environment.” RFID can help provide real-time, end-to-end dynamic decision support; product-asset hierarchy; and real-time data collection. Real-time data processing, satellite systems (GPS), and global decision management are other tools in the mix. As for data flow, the UCCnet global registry won’t suffice for all electronic product code requirements globally because it doesn’t accommodate dual-language needs of Canada, recycling data needs of Europe, or tax codes for Brazil, says Banker. In these cases, e-commerce and data synchronization schemes will need to help, he adds.

During an afternoon RFID panel discussion, Eric Peters of Manhattan Associates said the U.S. government is looking at future combinations of GPS and RFID to check contents of overseas shipping containers while they’re still at sea. Combining GPS/RFID also could safeguard high-theft targets, such as cell phones or other electronic equipment that “fall off trucks” in transit, says Amar Singh, of SAP. Other applications include pharmaceuticals, adds Singh, especially for drugs like Class 2 narcotics, which require accounting to the milligram from manufacture through dispensing. Peters says Florida’s drug pedigree law is designed to prevent tampering; FDA is looking to prevent drug counterfeiting; and RFID could help with each effort. Michael Dempsey, with RedPrairie, says RFID can also help validate drug locations, which could be useful because some drugs lose potency if, for example, they’re subjected to heat. Smarter recalls are another significant application for RFID, Peters adds. “Why pull all products from all store shelves, if a company can prove exactly which ones were affected?”

Data flow, one throat
Yet, despite application advantages, some seem to wish there were no RFID mandates or deadlines. However, Chris Colyer, with Microsoft’s manufacturing industry group, expressed appreciation. “I applaud companies like Wal-Mart, or we wouldn’t be having these discussions.” Colyer also noted that the vast data quantities that RFID can provide is similar to the amount of data collected and analyzed in real-time plant-floor applications. The implication is that companies that have expertise in dealing with plant-floor data in real-time will have an advantage in connecting and putting to use two-way flow of RFID information.

Peters says some RFID companies are adding to marketplace confusion by “crafting their message around pieces that end-user don’t care about. Do you care who your DRAM provider is in your computer? You want one throat to choke if there’s a problem…” As for timing, Peters, and others, warned that Wal-Mart and others will not bend on deadlines. Those without time to adequately test and implement RFID as needed had better find an alternate place to sell their products, he suggests. For some RFID technology providers, consultants, and system integrators, there may be a crunch at deadline time, adds Dempsey; so, “buy now; buy early. There are limited resources.”

Control Engineering Daily News Desk
Mark T. Hoske, editor-in-chief