Moving Toward the Talking Tag

You can’t pick up a supply chain journal today without reading about the monumental productivity advances promised by RFID. By allowing complete and accurate life cycle-tracking of a product, analysts claim that RFID will create faster shipments, fewer errors, and cost savings that more than justify the expense of these systems.

The long list of potential benefits has attracted the attention of the entire supply chain industry. Driven by mandates from retail giants like Wal-Mart and Target in the U.S. and Metro AG in Germany, vendors wishing to do business with mass merchandisers must become RFID-compliant. In addition, the U.S. Department of Defense now requires all suppliers to affix RFID tags to inbound shipments. An industry consortium of more than 600 manufacturers, retailers, and solution providers is developing standards and promoting tools and services to drive worldwide adoption of RFID.

But far from clarifying the issues surrounding RFID, all this headline-grabbing attention has only muddied the waters – especially when it comes to the integration of RFID and voice activated systems. Talk to distribution center managers, and you’ll hear one of two things: either a sense of urgency that they must get going on RFID now, or apprehension that RFID will eventually replace the voice systems they’ve already implemented. Neither concern could be farther from the truth.

For one, some people think RFID is ready to implement everywhere. In reality, RFID is not mature enough for most DC operations. RFID is a costly technology that currently makes sense only for certain specialized distribution operations. In fact, according to Forrester Research, 52% of retailers and 22% of consumer products manufacturers do not have plans for RFID adoption. Additionally, only 24% say they have identified the business value of RFID.

Part of this is due to the fact that tag read rates are unacceptably low in most operational environments today. While significant improvements have been made in tag and reader electronics and protocols in recent years, further technology advances are necessary to address such real-world issues such as arbitrary tag orientation, use with metals and liquids, and reader cross-interference. Although the ability to read 100% of tags moving through a DC 100% of the time will never be guaranteed, the technology will mature over time to make many distribution applications feasible.

But even if such a guarantee were possible today, there would still be few applications in place that could yield satisfactory return on investment, because the tags are simply too costly. For example, whereas it might be cost-effective for a car rental company to use RFID to keep track of its cars, it doesn’t make good economic sense for a cereal manufacturer to have an RFID tag on every case of cereal.

Another myth is that RFID will replace other technologies such as barcodes. The truth is that the cost of RFID tags is too high (roughly 20 cents each today) to justify replacing the less-than-a-cent cost of barcodes in every application. Although RFID tags have greater information capacity than one-dimensional barcodes the benefits that RFID offers are not always enough to offset the cost.

In reality, voice and RFID are complementary technologies. Here’s why: RFID tags can provide extensive information about products – their product code, size, manufacturing date, expiration date, etc. They also can be placed on locations such as shelves and pallets. But information alone does not make a business process more efficient. RFID systems don’t tell DC team members what to do with their products or how to perform a task.

This is where voice-directed work comes in by creating a two-way dialogue between the DC team and the information management system. Instead of relying on paper lists or a handheld device display screen to relay information to be interpreted and acted upon, team members use a very natural form of communication – two-way conversation – to perform their daily assignments. This capability makes team members more productive, more accurate and safer as they move from task to task, whether they are operating with a stationary RFID reader or a body-worn device.

On its own, RFID cannot tell team members what to do with products. Voice, on its own, cannot extract detailed information about the product. But when companies combine the two technologies – and create the equivalent of a “talking tag” – they not only acquire the ability to direct product-receiving, selection, replenishment and other operations; they also get automatic product identification and verification each step of the way.

Eventually, as the size and cost of RFID systems decrease and interface standards mature, it will be possible to purchase turnkey systems that have both voice and RFID capabilities.

As RFID technology matures, more and more systems will be deployed together with existing voice applications. Just as barcode scanners, printers, automatic storage equipment and other material-handling systems have been integrated with voice, it is possible to integrate voice and RFID as well. Connection to voice can occur either through the existing network infrastructure or directly, as peripheral devices. Eventually, as the size and cost of RFID systems decrease and interface standards mature, it will be possible to purchase turnkey systems that have both voice and RFID capabilities.

The many uses for talking tags
There are many specific situations in which voice can bring out the full potential of RFID. These include:

1) Back-of-store out-of-stock items: An out-of-stock product is received at the store and passes through an RFID reader. A team member is alerted by voice when the product is received and directed to expedite it onto the retail shelf. The team member may also use a wearable RFID reader to locate and verify the correct product.

2) Discontinued, recalled, or expired items: RFID systems can detect a wealth of information about each product, including whether it has been discontinued, recalled or expired. Thus, when a team member goes to select an item that should not be sold, he or she can be immediately notified by voice that the product is obsolete and given instructions on what to do with it.

3) Returned merchandise: As most companies know, returned merchandise requires a lot of “touch time.” By combining voice and RFID, the return process can become more automated. Item-specific information contained in the RFID tag can help determine its fitness for resale to specific customers or markets. The information can be used to direct team members where to put returned items back on the shelf, even if the put-away location is different from the original selection location.

4) Promotional Items: In the case of retail promotions, companies want to make sure their products are on the retail floor, not in the DC or in the back of the store. Here again, the arrival of promotional items is detected using RFID, and team members are alerted by voice and directed to expedite them through the DC or stockroom onto the retail shelf.

<i>Tom Kerr is director of applied research; Elise Yoder is software product manager; and Larry Sweeney is vice president of product management for Pittsburgh-based Vocollect, a voice directed work services provider.</i>

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