Efficient. Cost-effective. Responsive. Those are some of the ways experts describe the RFID-enabled supply chain. But some might add nightmarish and overwhelming. That same infrastructure of smart tags and readers that promises to revolutionize supply chain management has raised fears among IT professionals, who fret that the data captured by millions of tag reads will cripple their networks and bring their enterprise systems to a grinding halt.
What's feeding those fears, in part, is a report issued by global IT research firm IDC this summer that once again raised concerns that the widespread adoption of RFID technology could overwhelm enterprise networks. The authors of the report, which was commissioned by Cisco, went so far as to predict that the success of an RFID deployment would hinge on a network's ability to handle RFID data intelligently and securely, right to the organization's edges.
"It is absolutely something that must be considered," says Greg Gilbert, director of RFID solutions and strategy at Manhattan Associates, which markets software to help companies assess the impact RFID will have on their networks. "You may find out that you're in great shape, or you may very well [find that you] have some work to do."
One company that's grappling with these RFID-readiness issues right now is the tire-maker Michelin. "We're looking at how all this will interface," says Pat King, the company's director of global electronic strategies. "When it comes to issues like how you want to manage the data to make it useful and how you migrate to event management, those are the things we wrestle with regularly and haven't reconciled yet. We're working through that with local closed-loop, tightly managed pilots."
Too much information?
Despite all the uncertainty, at least one thing is clear: now is the time to prepare for the upcoming data assault. This is particularly true for companies whose existing enterprise systems aren't equipped to handle the serialization of inventory. It's one thing to process items at the SKU level of detail; it's quite another to handle items identified by individual serial numbers. In other words, a system that has no trouble recording a quantity of 500 for one particular SKU might be overwhelmed by a stream of data containing 500 individual serial numbers.
The IDC report warns that companies need to act right away to ensure that their networks are up to the task of handling large-scale RFID rollouts. "RFID system expansion is inevitable, [because] proliferation throughout the supply chain is a core premise for the realization of system benefits," says Duncan Brown, UK consulting director for IDC and author of the report. "It is important for organizations to consider the impact on network infrastructure at the beginning of an RFID rollout and to build in scalability from the start. Adjusting the network design [after the fact] will be complex and expensive."
In the meantime, the warnings haven't stopped early adopters like Gillette from barreling ahead with RFID. The giant consumer packaged goods manufacturer recently projected annual savings in the 25-percent range from its RFID initiative. Gillette and other RFID pioneers remain convinced that the big RFID payoff will come when users are able to seamlessly integrate RFID with existing enterprise applications tied to bar-code, wireless local-area networks, enterprise resource planning, and other supply chain execution systems.
Overall, it appears that the dire Y2K-like predictions of enterprise systems crippled by information overload may have been overblown. "Clearly there is an expansion in the quantity of data involved [with RFID], but we haven't run into folks who are panicking," says Ashley Stephenson, CEO and co-founder of RFID startup Reva Systems. "We've had those ... conversations with our customers, and we're not of [the opinion] that the sky is falling and enterprise systems are going to get swamped with data," he adds. "I think the industry has [gotten past] the early fears of data storms resulting from all the tag reads."
Part of the reason why none of those doomsday scenarios has played out is that RFID projects are still at a stage where the information generated is minimal. Rollouts by Wal-Mart, Target and the Department of Defense, for example, all called for gradual ramp-ups. "It would be one thing if the federal government said all this had to occur overnight, but that's not happening," says Michelin's King. "Wal-Mart and the DOD are doing this with a limited number of goods."
In addition, many companies are simply storing their new information in data warehouses, with the intent of mining it later when needed.
Sophisticated new RFID readers and advanced middle-ware applications are helping users cope with the onslaught as well. New, more selective readers are being designed that report only the events and data that users request. And middleware can help users like retailers manage the reads they receive from hundreds of stores deploying RFID by forwarding only the data users request, like notification of a pallet's arrival at a store.
"We might read that pallet in the store 100 times over the next few days or weeks, or that information might stay local at the store and be stored for weekly extraction back to headquarters, but it's not flowing on an instant basis back to headquarters," says Stephenson, whose firm recently introduced its Tag Acquisition Network to help users manage their RFID systems. "Later, when the user needs to resolve some shipping discrepancy, it can extract the data or look up the details of a particular shipment and [track] it at different places in the supply chain and use that information to resolve a dispute with a manufacturer."
In another promising development, a new royalty-free software standard for using EPC technology in the supply chain was released by EPCglobal Inc. in September. Known as the Application Level Events standard, or ALE, it establishes the approach EPC-enabled software products will take to collecting, managing and routing data generated by EPC technology in the supply chain.
"The ALE concept is a critical component of the EPCglobal architecture in that it provides the first line of defense for enterprise systems against the onslaught of EPC tag data," says Chantal Polsonetti, vice president at ARC Advisory Group. "As standards-based RFID middleware, ALE provides both a buffer to physical layer infrastructure activities and a platform for distributed edge computing."
Essentially, the ALE software eliminates the need for an enterprise application to tell the system how to get the data it wants and provides a much higher-level interface, relative to having to program low-level events. Polsonetti says the software will eliminate a lot of the labor associated with gleaning useful information from the torrents of data. It also provides a middleware driver platform that allows enterprise systems to interface to a variety of different devices.