Infrastructure
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9/28/2004
09:04 AM
Gene Alvarez
Gene Alvarez
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RFID Deadlines Intensify Need To Manage Product Information

Enterprises face dual 2005 deadlines relating to RFID and supply-chain data synchronization. Those that haven't moved forward with a product-information-management strategy will be under-prepared to realize RFID's value.

Multitasking--it's a concept we're all intimately familiar with. We do E-mail while on the phone or talk while we drive. Some do it to great effect, while for others it's counterproductive. A couple key supply-chain imperatives are forcing many big companies to deal with two major issues concurrently--RFID and global data synchronization--while still conducting day-to-day operational activities.

As various 2005 RFID mandate deadlines--from Wal-Mart, Target, and Albertson's--approach, enterprises are likewise making investments to meet the Wal-Mart UCCnet global data synchronization (GDS) 2005 mandate.

These dual 2005 deadlines don't give enterprises much time to evaluate the linkage between a tag's 96-bit electronic product code (EPC)-based identifier and the global trade identification number (GTIN)-based structured and unstructured information associated with that product.

Suppliers are in varying states of readiness for the 2005 deadlines. Some suppliers are focused on improving RFID tag read rates by adjusting the tags' orientation and pallet configurations. Others are working to ensure that retailers who subscribed to product data actually receive and implement that product data into their operational systems.

Additionally, some suppliers are working on the product data-unification process that's needed to pull together product data stored in a variety of systems for synchronization and haven't embarked on their GDS or RFID initiatives. Furthermore, there are enterprises that have only focused on meeting the minimum UCCnet GDS mandate requirements and haven't embraced the full capabilities of a product-information-management solution.

Of all of these groups, we believe enterprises that haven't moved forward with a product-information-management strategy will be under-prepared for RFID's long-term process-improvement contributions. These enterprises will be unable to convert EPC codes into the semantics needed for conversation between a retailer's and suppliers' operational systems since these operational systems aren't EPC-based and are more likely GTIN- or UPC-based. Both retailers and suppliers will need to create an environment that converts EPC-based activity into meaningful product information.

This developing environment has been the catalyst behind recent acquisitions and activities by GXS, IBM, Inovis, i2, Oracle, SAP, and Sterling Commerce as these organizations seek to enable the direct linkage between a tag's EPC and the complete product information in real time. Moreover, we believe that the direct integration of these two capabilities will enable enterprises to send, receive, and associate new and updated product information with a product in forecast, production, and distribution based on the activity signals received by the RFID sensing capabilities of the enterprise.

Meta Group research indicates that product-information-management solutions will address issues in several problematic areas, such as streamlining internal content-management processes for all product-related content, regardless of the content's source (e.g., ERP, EDI, and external sources like UCCnet or trading exchanges), as well as enabling a single source of product information for use by customers and trading partners through customer and partner portals. Moreover, product-information-management solutions will enable the enterprise to reduce the space and effort required to maintain, update, and retire product information. We believe that over time (2005-07), more retailers will join in global data synchronization (either directly or through a data hub), and that the product data-vetting process will contribute to this increased global data synchronization effort as retailers and suppliers begin to recognize the value of clean data.

Once the global-data-synchronization hurdle has been passed by retailers and their suppliers, initiatives such as collaborative planning, forecasting and replenishment, vendor-managed inventory, and direct-store delivery can gain even more value for retailers and suppliers, because the accuracy of information on products and transactions will increase (by 2008-09) and contribute to the overall business process.

In parallel to this, RFID initiatives can begin to leverage synchronized product data to increase supply-chain efficiency and settlement processes in areas such as trade promotions. Moreover, by 2008-09, retailers and manufacturers will have content and collaboration capabilities that will enable trading partners to share and synchronize unstructured product content such as images, video, manuals (e.g., instruction, installation), drawings, and schematics.

This content synchronization will enable virtual teams to handle scheduled events, such as training for new product introductions, and product upgrades much more easily since the product content will be received with the product structured data instead of through other channels, such as E-mail or overnight delivery. Moreover, product information contained in a product-information-management solution can be used for unscheduled events such as product recalls, enabling manufacturers to distribute recall-related product content to retailers and retailers to react faster to the recall events.

Bottom line: The long-term success of RFID initiatives is based on the linkage of the RFID sensing capabilities of the enterprise with the overall product information consumed in the transactional systems of the enterprise systems. That's because these enterprise systems--not tags on products--manage day-to-day business processes.

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