IT managers must have an effective application stack for their radio frequency identification (RFID) implementations to be successful, according to research from Butler Group.
Many organisations have run trials using a "slap-and-shift" tagging method, but this is only suitable for small-scale implementations, said Alan Lawson, research analyst at Butler Group.
Slap-and-shift is the nickname for a straightforward and commonly-used initial RFID approach. It is a tracking method in which cases and pallets of goods that are ready to be shipped to a trading partner or customer have an RFID tag attached prior to being dispatched.
This method offers good control and tracking options in low volumes, and at the scale of many of the trial projects it proved effective to implement and track. As a result, a good return becomes relatively easy to display, according to Lawson.
However, despite small-scale slap-and-shift trials producing good results, there were several issues involved in the successful adoption of RFID, and not all of these were likely to be fully apparent due to the controlled nature of the test projects, he said.
"The points that will need to be addressed include factors that are capable of entirely derailing the project, such as the sheer volume of data that can be generated, complexity of device management, lack of standards, limited solutions to interpret the data and costly integration with existing applications."
For larger RFID projects to work satisfactorily, IT managers will need to ensure that an adequate application stack underpins the RFID system, Lawson said.
This stack is comprised of four levels. The first is the services layer, which includes business process management software, analytics and content management software to deal with the large volume of data that is generated.
Second is the event management layer to handle the messages produced by tags. This comprises event management software, as well as an application that sets and manages messages and rules.
Next, the IT system will have a data collection and management layer, based on data collection and management software and interfaces to the RFID devices.
Fourth is the physical devices layer, with the hardware readers, scanners, pocket PCs and terminals.
Suppliers including Sybase, Microsoft, IBM and Oracle have strategies to provide infrastructure software to support RFID systems. Microsoft recently announced its RFID infrastructure, which is built on top of the .net Framework and can be embedded in third-party applications, or used on its own to capture and interpret data from sensors and manage events.
Sybase has released an end-to-end system, RFID Enterprise, which enables companies to integrate data from RFID devices seamlessly with enterprise data management environments.
Key to the success of RFID is for companies to see that although the supply chain stands to benefit the most, RFID will also assist in compliance, automation and business process transformation.
Lawson said, "Business transformation opportunities should be the aim of the project, rather than simply identifying low-hanging fruit, such as stock handling in a warehouse or store. Identifying the real value of RFID for the organisation, and targeting the optimum means of achieving this, should be done from the outset."
Gartner research director Michael Mahler said that for RFID to be effective, organisations need software systems that communicate well.
He cited an RFID project at Kimberly-Clark that was developed by SAP. The Electronic Proof of Delivery project aims to solve the problem of discrepancies occurring in invoices as goods are shipped between consumer goods companies and retailers. The initiative is expected to go live in early 2006.
Mahler said, "SAP and Kimberly-Clark are using RFID as the motive to enable collaborative, event-driven business processes and real-time information sharing, to provide the fuel for improved analytics and insight with retail partners.
"What is critical for long-term competitive advantage is having the functionality to react, analyse, collaborate and execute quickly."
A co-ordinated approach is important. Christine Spivey Overby, principal analyst at Forrester Research, said "fail-proof" RFID implementations rely on co-ordinating a company's hardware, IT architecture and applications.
Spivey Overby warned that hardware reliability should not be taken for granted. The hardware must work before firms derive business value. Fail-proof RFID deployments - still an elusive thing - require skills for diagnosing the RF environment of a site, installing readers and testing tag performance, she said.
Along with hardware, users also need to consider RFID middleware. "Even quick-hit implementations, limited in both scope and complexity, require management capabilities for basic data collection, smoothing and filtering," she said.
Today, these implementation services are tightly coupled with RFID middleware from companies such as Oracle, Acsis and OATSystems.
Spivey Overby said that as RFID expands data categories to include the identity and status of individual items, cases or other assets, users will need applications that support cross-functional, or cross-enterprise, bus- iness processes. "RFID data also enables higher-quality analytics embedded in enterprise applications," she added.
RFID versus barcodes
Many comparisons are being drawn between RFID and barcodes, which was another revolutionary supply chain technology in its time.
Butler Group research analyst Alan Lawson said, "In illustrating how improvements can be made, this comparison is useful, but it needs to be kept in context - RFID has the potential to go far beyond what barcoding was intended to achieve, and the distinction needs to be made."
Barcodes rely on a scanner passing over a flat black and white print to register a code unique to that product.
Conversely, RFID uses radio frequency signals. An RFID system consists of an antenna and a transceiver. The transceiver reads the radio frequency and transfers the information to a processing device and a transponder or tag. The transponder is an integrated circuit containing the RF circuitry and information to be transmitted.
Lawson said RFID can be far more than just an improvement on barcodes, and any strategic view should account for the potentially high volumes of business data the implementation of an RFID system will capture.
"Although it is necessary to account for this additional volume of data, it is shortsighted to simply consider it as a data storage issue. It is far more appropriate to highlight this aspect as a business opportunity to enhance or improve processes, and to clearly state this as part of the business case for RFID implementation," said Lawson.
Supply chain standards group EPC Global www.epcglobalinc.org
Association for Automatic Identification and Mobility Global www.aimglobal.org/technologies/rfid
RFID Technology Centre www.rfidc.com
National RFID Centre www.rfiduk.org