RFID Enterprise Link

Companies aim to make RFID more useful by tying it to enterprise systems
It's 2007, and Beaver Street Fisheries Inc. is preparing to ship a pallet filled with 52 cases of lobster, salmon, swordfish, and turtle, each bearing a tiny radio-frequency identification tag. A dockworker loads the pallet onto a forklift and pushes it past RFID readers mounted to both sides of the dock door and into an empty trailer hitched to a truck. As the tagged cases pass through the dock doors, information streams from the RFID tags to the readers and ultimately into the company's custom-built enterprise-resource-planning system.

That triggers a bill of lading that's automatically transmitted to an on-board computer in the truck's cab. Meanwhile, an advance shipping notice and invoice are cued up in Beaver Street Fisheries' ERP system and transmitted to the waiting customer via EDI.

In the next few years, RFID tags may be the most obvious difference in the operations of Beaver Street Fisheries and other consumer-goods companies but probably not the most important. Revenue from RFID software, hardware, tags, and services is expected to jump from $1.5 billion today to $4.6 billion in 2007, according to research firm Venture Development Corp. But it will be the combination of RFID, enterprise systems, and the business processes supporting those operations that will have the most impact.

Growth SpurtBeaver Street Fisheries knows this. RFID is pushing this 400-employee company and its 10-person IT staff to think out of the box. Earlier this year it created a lab to test software so it might someday tie the information gleaned from RFID tags into other parts of the business, such as accounts payable. "You can't automate purchase orders, EDI invoicing, or EDI advanced ship notices without tying the information into your ERP platform," CIO Howard Stockdale says. "RFID alone isn't the answer."

Integrating RFID with enterprise software is expected to change the way companies manage maintenance, combat theft, and even augment Sarbanes-Oxley Act IT initiatives. "The data could automate time stamping for Sarbanes-Oxley section 404 reporting to show where goods are in the supply chain," says Reik Read, an analyst at equity research firm Robert W. Baird & Co.

Manhattan Associates, Oracle, PeopleSoft, SAP, and others have begun adding RFID capability to their enterprise application suites. For example, Oracle's RFID and Sensor-Based Services analyze and respond to data from RFID so the information can be integrated with Oracle's applications, says Jon Chorley, senior director of inventory and warehouse management.

Return to The Future Of Software homepageRFID tags are evolving, too, and the advances will provide more granular information to enterprise software. Today's tags can store an electronic product code. In time, tags could hold more information, making them portable minidatabases.

Beaver Street Fisheries' Stockdale knows his vision for RFID is likely a few years off. "It may be two years before he can get a 100% read rate for all the cases tagged on a full pallet," he says. "If you can't read all the tags, assumptions are made that the merchandise is all there, and that's a serious limiting factor to integration that prevents accurate inventory counts and theft monitoring."

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