ERP Linked to RFID as Vendors Rebuild Apps

For most companies, real value from radio-frequency identification technology will come when business applications, such as forecasting and inventory management, intelligently use information pulled from RFID tags in real time, or at least close to it.

That will require middleware that can translate RFID data into formats that applications can use and redesigned applications that have the ability to handle the explosion in data volumes and share that data with other apps. Major enterprise-application vendors are preparing to meet the demand, starting with SAP, which last week unveiled supply-chain management applications built from the ground up with RFID capabilities. Oracle next week is expected to unveil RFID-ready versions of its supply-chain applications and mid- dleware at its AppsWorld conference in San Diego, and PeopleSoft Inc. says updates that add RFID-data support to its warehouse- and inventory-management apps and its data-collection middleware are in the works.

SAP's RFID-enabled software includes a tool dubbed the Auto-ID Infrastructure that links RFID data to back-end systems; SAP Event Management, which helps companies monitor exceptions to their business processes triggered by data coming from RFID-tagged products or other sources; and SAP Enterprise Portal. German retailer Metro Group, the owner and operator of more than 2,300 retail stores throughout Europe, has been testing the software and last week said it will begin in November to receive cases and pallets with RFID tags from 100 suppliers. The shipments will be sent to 10 central warehouses and out to about 250 stores.

"We need to find out how we can deal with all the data that's going to come with RFID," says Peter Helmer, technical project leader of Metro Group's Future Store Initiative. SAP's Event Management software helps with that, he says. SAP developed the RFID-enabled versions of its software while working with Metro Group and consumer packaged-goods company Procter & Gamble Co. on separate RFID projects.

RFID apps from SAP and PeopleSoft will be available commercially midyear. Both companies say they've made significant investments redesigning their software for RFID to prepare applications for collecting more data more frequently. "We have to make sure that data tables, transaction systems, and data warehouses can handle all of it," says Andy Carlson, PeopleSoft's VP of marketing for supply-chain management.

Businesses may perceive vendors that specialize in warehouse-management apps, such as Manhattan Associates Inc. and RedPrairie Corp., as having an advantage in handling RFID formats, says Ann Grackin, CEO of ChainLink Research. "They're used to collecting scads of data, so this is just another format to them," she says.

But as companies further integrate RFID into their businesses, they'll likely want ways to leverage all the relevant information it provides. Companies will start to reengineer business processes to take advantage of RFID, and they'll need global visibility of that data, says Steve Banker, director of supply-chain-management services at research firm ARC Advisory Group. "If you want global visibility, it's almost a natural to go to someone like SAP."