Radio Frequency Identification, better known as RFID, is a technology that has been used by the military since World War II. Previously limited in use and capabilities, this technology is finally beginning to impact global trade and business.
RFID is essentially the use of a tag or chip with an antenna and a reader or transmitter and reciever of radio waves. Used within supply chains, this simple technology has the ability to provide end-to-end visibility of goods from their manufacturer to their end user or users.
What does that really mean?It means that a bottle of Viagra, manufactured in the US can be tracked from the pharmacutical company that manufactures it (Pfizer) to each of the distributors and intermediaries who touch it on its way to a pharmacy, such as a CVS, and eventually the consumer or patient who has been prescribed to take it.
In tracking this, it means that the manufacturer and the FDA can be assured that the product has arrived un-tampered with, and without being traded for a knock-off or fraudulent product. In addition, it means that if there were to be a recall, that product, the lot, and the batch could be tracked down, more easily to ensure patient safety.
But wait, there's more!In addition, this technology allows the manufacturer and distributors to track the amount of time the product had in transit, meaning that transit routes and tranportation providers can be monitored and evaluated more effectively. So that the delivery time that used to be 10 days can be cut down to 5 days at the same price, allowing for quicker fulfillment of orders, lower inventory levels to be maintained by retailers and distributors and more accurate planning to be done across the supply chain.
In short, consumers will be able to get more products, less expensively and in a more timely fashion then ever before. Companies will be able to be more responsive, while also being more efficient and profitable. A win-win situation.
So why hasn't this been done before?Well, in short, it hwas only recently that the technology was given the time, attention and effor that it deserved. The Massachussetts Institue of Technology (MIT), funded by leading manufacturers and retailers conducted a great deal of research and created what is known as the Electronic Product Code™ (EPC). The EPC is similar to the bar code or U.P.C., in that it allows for identification of items, but the difference is that the EPC allows for a great deal more information and more specific information to be encoded and communicated. This information could allow for tracking of such things as the temperature within a freezer car to ensure that a shipment of beef is stored at the right temperature to ensure freshness.
It was only during the last few years that an organization called EPCglobal was formed to develop standards for the use of this technology to help ensure commercialization and adoption. EPCglobal currently has more than 600 of the world's leading manufacturers, retailers, technology providers and others within its membership. Pretty impressive for an organization that is less than 3 years old. In addition, EPCglobal is the first and only cross-industry, global standards organization that is solely focused on RFID technology.
But what is the value of standards?Standards are an accepted method for doing something. By developing standards for the manufacturing and implementation of a technology, it enables faster, cheaper and more effective implementation of that technology for the companies using it. It also means that one technology can be used by the same company that services many different customers in many different industries and countries.
In short, the same company that manufactures widgets and sells them to Retailer A, also sells them to Retailer B and Retailer C. This company also sells them to the U.S. Department of Defense, as well as the Royal Canadian Mounted Police. In order to meet the needs of each of its clients, this company needs to make sure that it packages, ships and can provide tracking information in such a way that it meets the specs of each customer. Standards, provide a way for this company to enact a single process that is acceptable to all of these parties, as well as others. Making it more efficient for the manufacture, who can then pass along that savings and improved service to each customer. Thus, standards allow for greater efficiency for all parties involved.
In the coming weeks, we will explore this technolgy and its potential benefits more closely.