On a road map, the data encoded in a RFID (radio frequency identification) tag will endure a long but clear-cut journey, travelling thousands of miles from a manufacturer's warehouse to a retailer's distribution centre in a chip no bigger than the head of a pin. But the data's path gets more complicated as it wends its way through the various middleware and back-office applications that will ultimately make it useful in the retail supply chain.
Standards are still being worked out, and the software is still evolving. By the time everything is settled, the ways in which the data travels may change. That's what we learned, tracing the path of RFID data at trailblazing user Gillette, one of Wal-Mart's top suppliers.
The Boston-based manufacturer has one of the most sophisticated global IT architecture designs among the 100 suppliers facing the January deadline that Wal-Mart has set its suppliers. Some commentators think the deadline will not be met, but Leo Burstein, distributed technology architect at Gillette, is confident that the bumps will be smoothed out. Burstein sits on the architecture review committee of EPCglobal, the standards body working to resolve some of the prickliest issues.
In the meantime, with so much in development, Gillette has faced a balancing act to establish "a framework that is flexible enough to sustain the long-term project but at the same time develop some tactical benefits that can be used to support our customers in the short term," Burstein says.
Start at the pallets
At Gillette, the data begins its journey in the software systems that assign a unique Electronic Product Code to each case and pallet. The EPC is transfused onto a chip embedded in a tag that has a flat, razor-thin coil on its underside. When the tag hits the RF field of a reader, it responds with a signal containing its code, and the data is sent to EPC middleware for processing.
Once Wal-Mart expands its RFID efforts and other retailers follow suit, data will be gushing through those companies' IT systems like a waterfall. But the volume of data is currently more akin to the trickle of a stream.
Thus far, only a handful of retailers have asked their suppliers to ship cases and pallets with RFID tags to selected distribution centres, so technology vendors aren't able to get the critical mass necessary to drive down costs.
Because RFID tags and related systems are expensive and the near-term payoff isn't clear, there's little point in tagging all products at the point they're manufactured. Retailers merely need to know when the cases and pallets are shipped and what's in them. As a result, most suppliers tag goods as late in the process as possible.
Tag at source?
Gillette is no exception. The company was one of eight suppliers to participate in a pilot with Wal-Mart. Most of the cases of razors, shaving cream and toothpaste it ships to Wal-Mart are tagged at its distribution centre in Romeoville, Illinois. But because Gillette thinks the benefits will be greater the earlier in the process it can tag goods, the company has also launched a pilot to "tag at source" at its packaging facility in Fort Devens, Massachusetts, where it puts EPC tags on cases of Venus razors.
Like a license plate on a car, the EPC uniquely identifies a case or pallet. It uses five key pieces of information: the company code; product code; serial number that uniquely identifies the item; a header that defines different types of tags, such as those in the consumer products industry; and a filter value that allows a company to read only pallet-level tags, ignoring case-level tags or vice versa.
By tagging at the point of packaging, Gillette can reduce the labour costs associated with manually scanning each case and curb errors. Workers currently key five entries onto a keyboard and do three bar code scans for each pallet, according to Jamshed Dubash, director of Auto-ID technology at Gillette. He says a business process analysis showed that the company will annually save 25 percent in operational costs once all cases are being tagged at the packaging point rather than at the distribution centre.
But, Dubash is quick to add, "even though you can get significant benefits from operational savings, it's the collaborative benefits that are the real drivers and motivators for us to work so closely with our retail partners. Our analysis shows that 90 percent of our benefits and 90 percent of the retailer's benefits come in the collaboration process."
Moving through the system
Gillette's EPC data travels thousands of miles on a tiny chip to Wal-Mart's Texas distribution centres in Sanger and DeSoto, as well as to some stores, Burstein says. If all goes well, its arrival is automatically logged when the tags on the cases and pallets are read at strategic positions in the retailer's distribution centres and stores.
Gillette is already getting access to data from Wal-Mart and is working with the retailer to understand the optimal use of the data, Burstein says.
A spokesman for Wal-Mart says it provides options for suppliers through its Retail Link extranet site. With Retail Link, suppliers have to "pull" data; a dashboard provides customisation options. That system was used during the pilot, and many suppliers will continue using it, the spokesman says. He adds that Wal-Mart has rolled out specifications for an Electronic Data Interchange document that will allow suppliers to receive "all of their read data" on a machine-to-machine basis in that form - daily, if they wish.
Gartner analyst Jeff Woods says suppliers will be able to see data indicating not only when a product arrives at Wal-Mart's distribution centres and stores, but also when it moves from a store's back room to the sales floor, because readers in trash compactors will note when cases are crushed.
The challenge for suppliers will be getting structured access to the data, because that's the most efficient way for them to get payback from RFID, according to Woods. "Capturing the data from Wal-Mart is not as efficient a process as most people believe. Many suppliers use somewhat manual processes to accomplish this," Woods says, noting that their replenishment planning, forecasting and category management systems will need the data.
But, Woods maintains, even if suppliers can get the RFID data, the majority won't know what to do with it. "Most aren't even ready to use the point-of-sale data that's there today," he says.
When Gillette began designing its architecture, the starting points were the business requirements and back-office applications. From there, it worked its way back through an integration layer, the EPC-enabled middleware and finally to the readers and the tags containing the data. The idea was to minimise changes to existing business applications, protect the company from shifts in RFID technology and create layers of abstraction, connected by a series of sophisticated interfaces.
Taking a service-oriented approach, each application would be similar to a Lego block, and the interfaces would be the pegs connecting them. Any one of the building blocks could be removed, and another could be plugged in. "You can use the best building blocks that meet your requirements, and if you need to replace one of them, you do not have to change the rest of the puzzle," says Burstein.
The current edition of Gillette's architecture has a business application layer consisting of its data warehouse, a warehouse management system from Provia Software Inc. and other applications that will process the data.
Integration and middleware
An integration layer sits between the enterprise application layer and its EPC-enabled middleware from OatSystems. The integration layer, based on technology from Sun Microsystems, handles the routing of data between the middleware and enterprise systems, guarantees message delivery and performs any needed protocol or data-format transformations.
The OatSystems middleware collects the EPC data from the readers, each of which has read a tag potentially hundreds of times per second, and filters the data into separate messages that have a distinguishable meaning from the business process perspective.
Gillette is also testing an appliance concept that will combine the reader, some functions of the middleware and the physical infrastructure to simplify its systems, Burstein says.
At the same time, Gillette is working hard through EPCglobal to standardize interfaces, the most important being those between the middleware and enterprise applications, Burstein says. The only needed interface close to being finalized is the one between tags and readers, he adds. "It's easier said than done," Burstein acknowledges.
"We as end users are encouraging technology providers to keep their systems open so we don't create stovepipes with no ability to exchange information between them," Burstein says.
But Woods says one of the greatest hurdles to overcome is how to determine the context of the data that's being collected. For instance, a reader at a shipping dock door needs to discern which tagged pallets are heading onto trucks and which are merely passing by on their way to storage, he says.
Scores of suppliers will merely slap tags onto the cases and pallets they ship to Wal-Mart and not worry about adapting their systems and business processes to take advantage of the data, at least in the near term. Even Gillette, which has what Woods terms a "sophisticated, very sleek architecture," still has a long way to go in figuring out meaningful uses for the data.
But, Woods adds, "if any supplier can figure out a way to use the data, it will be Gillette."