Sara Lee wrestles with RFID

Food producer Sara Lee is testing RFID tags on some product cases and shipping pallets to meet a mandate that RFID technology be...

Food producer Sara Lee is testing RFID tags on some product cases and shipping pallets to meet a mandate that RFID technology be used on goods sent to Wal-Mart's Dallas-area distribution centers from January 2005.

Ray Hagedorn, vice-president of business solutions for the IT department in the Sara Lee Foods division, recently spoke with Computerworld's Carol Sliwa about what Sara Lee has learned about RFID.

Which applications will make use of the data that you gather through RFID?
We are a major supplier [to Wal-Mart] and we had to focus on January. If we got too caught up in breaking down the processes we were going to waste a lot of time prematurely. So we said, "Let's narrow our focus. Let's learn about the technology".

Are you mostly taking a "slap and ship" approach now?
Absolutely. And if everybody would be honest with you, that's what they're doing.

How much did you spend on the RFID tags?
It was 35 cents a tag. As we look at our newer models, it's going to be less than 35. I'm not sure exactly what it is yet.

Are tags being read at the accuracy rates that Wal-Mart expects?
Yes. At a case-by-case basis, as I go down through our process, I validate that case. A tag is on it. I encode the tag and then I immediately validate that, and I capture those statistics. If it doesn't read, I can pull that out and put another tag on until we get it read. That gives us our 100%.

It sounds time-consuming.
Oh, absolutely.

Wasn't RFID supposed to automate the process?
It's not ready for high volume.

What advice would you give your peers?
Don't make huge investments. Get started, pick your point, learn. Pick a partner in your business [operations] because you cannot do it [all] as technologists. We have our logistics group involved with us every step of the way.

Have you done any integration?
Oh absolutely. We have integration going backward. We're just not using the data. We don't know what to do with the data yet.

What are the problems with RFID technology?
The tags, without question. From the middleware side, this is still early in its evolution. Many suppliers have middleware that is integrated into their standard offering of product, and they also have some things that can work with someone else's - like a warehouse management system.

You can go through different research or consulting groups that give you a short-list of things that you should be looking for in a middleware supplier. But your supplier probably is not going to be the same 12 months down the road.

Do you have any idea what the biggest benefit will be for your company?
No. I believe there is value, and this is predicated on good information flowing back to me at key points in time, near real time, that our planners can use to better plan and better forecast - allowing us to shrink safety stock, for example.

When do you think you'll start to see value?
I even hate to hazard a guess. But I would say we would be really looking for things to dramatically improve where I can start using information flowing back, regardless of whether it's internal or external, within the next 12 months.

You first look at where you have pain points for information accuracy, timing, controls or whatever the case might be. And if you say, "Wow, I've got a big issue here. RFID today can make a vast improvement", - go for it.

We just haven't found any of that that immediately jumped out.

Carol Sliwa writes for Computerworld

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