RFID became a hot topic last year when Wal-Mart announced it would require its top 100 suppliers to label product at the pallet and case level with RFID tags by January 2005.
Soon after, the DOD ordered its suppliers to do the same. Target and Albertson’s have also given notice to their suppliers of forthcoming RFID requirements.
Even though questions of standardizing a format slowed Wal-Mart’s initiative, pilot programs are proceeding as planned. Last month, eight of Wal-Mart’s largest suppliers — Gillette, Hewlett-Packard, Johnson & Johnson, Kimberly Clark, Kraft Foods, Nestle Purina PetCare Co., Proctor & Gamble and Unilever — began a pilot program at a Dallas/Fort Worth distribution center.
The initial trial involves 21 products at seven Wal-Mart stores but is expected to expand to three distribution centers in Texas serving 150 Wal-Mart, Sam’s Club and Sam’s Market stores.
If all goes well, Wal-Mart reports it will be on schedule for the January deployment regardless of whether its suppliers are ready.
One local company, Provia Software, is eagerly awaiting that deployment and has been a key player in the process.
“We were already involved in (RFID) before Wal-Mart made that announcement,” said John Clark, Provia’s marketing manager. “That put Provia in a very good position because we were well on our way with the technology.”
Provia specializes in order-to-delivery supply chain management software. Its ViaWare WMS (Warehouse Management System) delivers third-party logistics to clients such as Gillette, Menlo Worldwide, Graybar Electric, Spencer’s Gifts and Lanier Worldwide. Provia also offers yard and transportation management and supply chain visibility.
Predominantly a barcode or paper-based product, ViaWare involves having workers use handheld devices.
Provia explains that the problem with barcodes, however, is that they are not unique to cases and must be individually scanned, making it easy to double count a case. RFID tags, however, are unique to each case of product and can all be read simultaneously so that counting becomes entirely automated.
Perfect counts no longer rely on imperfect humans.
Gilette uses WMS in its North American distribution facilities, and when it became interested in RFID as a replacement, it contacted Provia.
“They were looking at ways to incorporate that technology to use instead of bar coding or to verify it, and they told us we should take a look at it,” Clark explained. “Our warehouse management systems are great at optimizing work that people can do. It can tell you where to go, how many to pick. But what they can’t do, quite honestly, is count for you.”
What Gillette envisioned is that while a worker picks cases, forklift RFID readers would confirm each pick and alert the worker to a miscount.
Too, RFID readers on loading docks could verify counts from the supplier to the store shelf.
Gillette and Provia became involved in the Auto-ID Center, an MIT consortium that was working to develop the technology for the supply chain and other uses.
Last year, only weeks before Wal-Mart’s announcement, Provia unveiled its new WMS with RFID support. When the Wal-Mart announcement came in August, Gillette and Provia were sitting comfortably ahead of the power curve.
Provia partnered with Sun Microsystems to build the RFID Test Center, a 17,000-square-foot warehouse in Dallas that opened on May 5. The center enables suppliers to evaluate how to integrate RFID into their manufacturing, warehouse and distribution environments.
Not only does Provia’s WMS provide a solution to RFID compliance, it has also produced Freeware, a bolt-on solution for companies that do not use WMS.
“For us, it’s really just another way that we connect information into logistics solutions for clients,” Clark said. “The only reason companies are predominantly doing RFID is because Wal-Mart is telling them to do it. They are definitely forcing the technology.”
At the Distribution/Computer Expo 2004 last month, Provia unveiled a solution that would allow Wal-Mart suppliers to leverage the investment of RFID implementation within their own organizations. ViaView, an event/alert management and support product, makes RFID-tagged product visible to suppliers as it progresses through the Wal-Mart supply chain.
That data would show suppliers the turn time of products at every step of the chain.
Southfield-based Radley Corp. has had a Grand Rapids presence since 1987. They provide the hardware for supply chain management systems and have been certified in RFID for three years.
“Three years and we don’t have a single (RFID) customer,” Radley Corp. Vice-President David Barks said. “We have 125 customers around the country and not a single one of them is in production with RFID technology. It’s getting a lot of publicity, but from a development standpoint, it’s moving pretty slow.”
The Auto-ID Center last year became EPC Global and is currently working to develop a standard for RFID tags.
The lack of a standard is threatening to halt the Wal-Mart deployment.
“The tags they wanted are not even being manufactured,” Barks said. “They’re waiting for the standards industry to catch up. When EPC Global approves a standard, then they’ll move forward. But my guess is very few people are going to make that deadline.”
There are two types of RFID tags: active and passive.
Active tags have been in use since World War II and are still in use by the automotive industry today. Incredibly expensive, active tags contain their own power source and are only cost-effective if they can be reused and when applied toward extremely costly items, like automobiles.
Passive tags do not have their own power source and are much cheaper. Their power supply comes from the readers themselves, which power up the tags to read them.
Although less expensive than active tags, the cost of passive tags is still a deterrent. According to Barks, for the average-sized manufacturer, a tag will cost upwards of a dollar. In mass quantities, the price goes no lower than 30 cents.
Wal-Mart’s pilot program is accepting two passive tag formats, the Class 0 and Class 1, and are waiting on EPC Global’s development of a standard Class 2 to begin full implementation.
The other major end-user forcing RFID implementation, the Department of Defense, has yet to release its specifications, but with the expectation that all orders placed after Oct. 1 that will be delivered in 2005 will require RFID tags, DOD suppliers are just as anxious as their Wal-Mart brethren.
“We’re waiting on the DOD to publish this final specification here in the summer timeframe,” said Wolverine World Wide director of new technology, Gary Sherman. “We’re speculating they are going to require it on the case and pallet level.”
Wolverine supplies combat boots to the United States military. The Rockford-based company has created an interdisciplinary team to research RFID implementation, but has yet to move forward beyond that.
IBM, another major player in the RFID industry, is developing tags that will one day allow for a unit-level tagging. The implications of such — from loss prevention to eventual elimination of cashiers — reach the boundaries of science fiction.
At the Community Media Center’s Media and Democracy Conference in May, RFID was briefly discussed, and several attendees announced that they had already purchased RFID blockers.