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Beyond Quick-and-Dirty RFID

Mandates from the likes of Wal-Mart, Target and the Department of Defense have led to crude, slap-and-ship deployments of radio frequency identification technology.

Vet the Vendors

RFID process integration is a vast domain that can touch almost all aspects of a business. From a vendor perspective, companies large and small see RFID as an opening to boost revenues. Given its strength in manufacturing, SAP was an early proponent of the technology, and it's already rolling out the second generation of its RFID solution, called Auto-ID Infrastructure (AII), based on the Netweaver platform. The current-generation AII supports outbound logistics and inbound logistics scenarios integrated with inventory, warehouse and supply chain event management.

SAP is also developing solutions for "adaptive manufacturing," which tightly integrates manufacturing and the supply chain for better customer response, and for "responsive replenishment," which gives retailers and consumer products companies tools to automate replenishment and gain real-time response rates. RFID supports both initiatives because it speeds data capture and eliminates information disconnects along the supply chain.

With the formation of IBM's Sensor and Actuator Solutions division last fall, IBM is investing $250 million over five years in developing and deploying RFID and other sensor technologies. The division's IBM WebSphere RFID Premises Server is robust middleware that's aggressively priced at $5,750 per processor (with a minimum two-processor server recommended). The RFID Premises Server provides device controller and management capabilities, using an edge controller by Arcom, as well as tag printing, verification and shipping features. While a little light on intelligent reporting and application functionality such as "Pack," Load" and "Ship" processes, the Premises Server integrates with back-end systems using WebSphere Business Integration Server.

German retailer Metro AG uses Premises Server as part of a pioneering RFID implementation. Metro has persuaded suppliers to tag pallets, cases and, in some instances, individual products. When customers enter stores carrying their RFID-encoded membership cards, they're automatically presented with electronic coupons and product recommendations based on their buying patterns. Store operations have benefited from better shelf, promotion and inventory management, tighter control of shrinkage and faster reconciliation.

Creating a business case for RFID involves blueprinting the processes, prototyping the scenarios, integrating the components, including edge devices, middleware and ERP systems, and handling change management with the organization. All this requires specialized knowledge across various disciplines. Enter RFID integration consultants, who, due to the nascent state of the technology, are few in number and can't claim years of experience. Nonetheless, companies including HP are building up their consulting practices for RFID deployment. HP has been involved in RFID standards development and has learned from its own use of RFID in its vast manufacturing and logistics operations.

Gain Intelligence

Because it's real time, location aware, state aware, time aware and highly granular, RFID data is inherently rich in properties. This property set offers a prospector's paradise for data mining and analytics. BI derived from RFID data can be applied in various facets of the enterprise, from operations refinement and proactive planning to executive decision-support systems. And RFID data mining brings better insight to product velocity, receipt, storage and transportation analytics, trend analyses and exception reporting applications. On the cutting edge are pattern recognition and complex event processing (CEP) algorithms that will examine events, time and exceptions to infer meaningful patterns. This could help organizations spot promotions that would boost sales of an item if packaged with an accessory or determine that a specific shipping route is prone to delays.

Use of BI is best planned in advance rather than cooked up as an afterthought. Unfortunately, most companies grapple with implementation and back-end integration first. Once the volumes of data build, companies begin to assess BI development and tools.

There are currently few BI and analytic tools developed specifically for the high-volume data demands of RFID. Among the few vendors addressing the need is Panorama Software, a Toronto-based company that announced in June that it is building BI applications on the SQLServer 2005 platform and Microsoft's RFID solutions. The software has yet to be released, but Panorama says it will apply analytics and measurement models to inventory management, transportation movement and consolidation for trans-shipment, and receipt of goods.

Another BI vendor addressing RFID is FYI Corp., an Atlanta-based company that specializes in data visualization. This technology has the power of interpreting the state of thousands of data points in a single lucid snapshot, and the company is applying it to RFID data representation.

Change the Tag Line

The BI market notwithstanding, there has been a spurt of new RFID offerings in the areas of hardware, software, solutions and services. Understandably, companies in the early stages of adoption are often baffled by offers of "seamless integration," "out-of-box functionality" and "plug-and-play solutions." If you're deploying RFID today, you'll inevitably face availability and compatibility problems, and don't be surprised if you encounter buggy, untested software.

The market is maturing, however, with recent alliances that promise better integration. For example, GlobeRanger, a device control and data management software provider, has partnered with logistics software specialist Manhattan Associates. SAP has partnered with device manufacturer Intermec on an entry-level solution aimed at small and midsize businesses. And device manufacturer Paxar Canada has partnered with RFID software vendor IDVelocity. These and other examples of technology partnership point the way to faster, smoother deployments.

Plenty of challenges remain, but it's only a matter of time before the tag line for RFID — and higher RFID-derived intelligence — evolves from "technology of the future" to "business as usual."

Rajeev Kasturi heads RFID Integration Solutions company RaptID Inc. Write him to at [email protected].