Embracing RFID technology drives process improvements
Depending on who you talk to or what you read, radio frequency identification is either going to revolutionize business practices the way the Internet did, or it will simply become another information gathering technology that is routinely integrated into the manufacturing process. Either way, for manufacturers, distributors and retailers alike, the advances in RFID technology (and the consequences of these) are becoming increasingly difficult to ignore.
To some, comparisons between RFID and the Internet as an equally revolutionary tool are a bit extreme. By itself, RFID isn’t revolutionary — slapping a tag on a pallet and sending it to a distribution center isn’t going to change the supply chain. Only when RFID is used in tandem with the Internet to access and share product information does the ‘revolutionary’ potential of the technology emerge.
Dramatically different than the RFID of years past, today’s technology adheres to industry standards put forth by EPCglobal ( www.epcglobalinc.org ). These standards are key factors in enabling the sharing of a significantly greater amount of information via the Internet for increased visibility and greater efficiency throughout the supply chain. In other words, the data stored on individual tags is no longer restricted to the confines of the building in which it resides.
The far-reaching implications of RFID don’t stop with information sharing; the real return on investment comes when a company uses the data to change and improve processes.
Whether or not you are an RFID believer, there’s no denying that RFID is a catalyst for dramatic change in how goods are manufactured and distributed. The question is, “are you ready to embrace RFID and its full potential?”
RFID in manufacturing
By all accounts, the adoption rate of RFID technology has exceeded expectations. Still, the adoption rate might be even better if it were not for several key inhibitors, which include the development and adoption of clearly defined standards, inferior tag reliability and readability and difficulty in achieving a return on investment.
While EPCglobal and the tag suppliers have been aggressively tackling the first two items, ROI continues to be an elusive target for many. I believe this is due largely because many manufacturers have been looking at RFID as a compliance mandate driven by a few large retailers rather than as an opportunity to embrace the technology as an enabler of process improvements.
By viewing RFID strictly as a compliance issue, manufacturers are overlooking the opportunity to tap into the wealth of information the technology delivers that can be used to make more accurate (and more profitable) business decisions. Receiving information from RFID is one thing, but using it is another. The true rewards from RFID will come, not through the technology itself, but rather from the manufacturer’s ability to filter and capitalize on the data it provides.
It’s my belief that the earlier you apply the RFID tag to an object in the production process, the greater the benefits you will be able to obtain from the information captured. Likewise, the more RFID is applied upstream from the supply chain to manufacturing operations; greater is the value that can be gained by integrating RFID technology into existing information and automation control systems.
Areas of impact in manufacturing
By applying RFID technology on the plant floor, manufacturers can seamlessly integrate the newly captured information into the existing information and control infrastructure, thereby using the RFID tag as a unique identifier and minimizing capital equipment costs and investment risk. On the plant floor, RFID will provide the greatest impact in the areas of inventory visibility, labor efficiency and tracking and genealogy:
Inventory visibility %%MDASSML%% As contract manufacturing becomes more prevalent, achieving supply chain synchronization will require greater visibility into supplier, as well as customer, activity. The better a manufacturer is able to collect, manage and use information to drive production assets and processes, the more visibility (and value) it can provide to its trading partners
Labor efficiency %%MDASSML%% Many current bar code activities require manual intervention to capture data. An immediate impact of today’s advanced RFID technology is eliminating those requirements, thereby freeing up labor to perform other, more value-added tasks. This can have a major impact, particularly in high-volume and high-speed manufacturing operations where speed, accuracy and timeliness are critical for throughput and performance.
Tracking and genealogy %%MDASSML%% Increasingly demanding FDA requirements are forcing consumer goods manufacturers of all types to more effectively manage product information, including lot tracking and related quality data across their entire supply chain. In the event of a product recall, access to reliable, accurate and real-time information is absolutely critical. RFID can also complement existing manufacturing execution system efforts in genealogy tracking. For example, information collected by the MES, such as product ID, time stamp, physical attributes and lot number, can be encoded onto an RFID tag and then passed downstream into the warehouse at the pallet level, and then out into the supply chain. This greatly enhances a manufacturer’s ability to retrace steps in a product recall.
To my colleagues in manufacturing, I echo her sentiments %%MDASSML%% don’t wait! Start a pilot program as soon as possible. Like any new technology, I recommend starting small and getting a feel for the technology in terms of what it can or cannot do for your organization. In addition to helping identify what processes are going to be affected, pilot programs can provide valuable insight into the ROI of their potential RFID investment. This ability to ‘test drive’ the RFID deployment helps reduce the investment risk and improve business performance across the entire organization.
Many manufacturers are overwhelmed by the volume of information available on RFID technology and don’t know where to start. The information can be confusing %%MDASSML%% which tags to use, which readers to use, what infrastructure to use, what printers to use %%MDASSML%% but the good news is that help is available from knowledgeable technology providers who can help companies sort through the maze of information and provide practical, real-world advice.
Above all, don’t go it alone. Find a partner that understands your company as well as how to use RFID to enable positive change. With the right approach and the right implementation, the short-term costs of RFID will be easily eclipsed by the long-term benefits this technology provides.
Author Information Sujeet Chand was appointed vice president, Advanced Technology and chief technical officer for Rockwell Automation in April 2001. In this role, he is responsible for technology strategy, advanced technology development, and global standards and trade. Chand holds a doctor of philosophy degree in electrical and computer engineering, a master’s degree in electrical engineering from the University of Florida, Gainesville; and a bachelor’s degree in electrical and electronics engineering from Osmania University, India.