Moving Toward the Talking Tag Nov 1, 2006 10:55 AM
, By Tom Kerr, Elise Yoder, and Larry Sweeney
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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>
