Issue #19 | March 10, 2005

Dallas one day, Chicago the next. Your roving reporter has been keeping busy.

Right now I'm at the National Manufacturing Week show in Chicago and it's a stark contrast to last week's RFID World. Very few people I've spoken to are actively working with RFID technology. They're curious, and want to learn more, but it's not in their day-to-day lives. So why I am here?I was invited to participate on a panel to discuss the benefits and challenges around creating ?Real World Awareness? ? that means providing real-time visibility of inventory in-production, in-stock, and in-transit. As you would imagine, RFID technology was a key talking point because of its ability to capture a product's every movement - from an Asian manufacturer to a store shelf in the U.S.

We are still many years away from achieving real world awareness. But the challenge is not with putting RFID tags on every shipping container, pallet, and case traveling around the world. The challenge is building the systems that make decisions based on asset visibility events; events that occur not only in your own company's supply chain, but in your trading partner's supply chain, and all the ripple effects those events create.

Let's look at a simple example of replenishment:

When a customer removes an item from the shelf, the distribution center (DC) automatically gets an order, which triggers the manufacturer to produce another unit. As simple as this sounds, this event has cascading effects across numerous systems of numerous different companies. In this example, there is:

the retailer,

the third-party logistics provider operating the DC,

the Asia based manufacturer,

the shipping company transporting the newly manufactured items from Asia to the US ,

at least 2 ports the shipping container has to go through,

the freight company moving goods from the port to the DC

the other freight company moving products from the DC to the store.

Each one of these entities will most likely use multiple systems. Now consider how many people that require visibility across these systems: purchasing agents, store employees, finance, etc. Of course, this visibility has to be provided securely. Today, few companies have systems sophisticated enough to provide asset visibility on these levels. Before real world awareness becomes a reality, we will have to wrestle with the complexity of a product's journey and touch points as it travels around the globe.

Back to Chicago for just a moment: The word on the street from conference veterans here is that attendance has significantly decreased from prior years. And the most common reason cited is the rise of outsourcing to Asia . The number of products made abroad continues to grow at a rapid pace. So, like it or not, we are ever more dependent on the global supply. And this means good news for the RFID industry as it helps to create real time tracking and visibility.

Written by Louis Sirico
Copyright ? 2005 Louis Sirico