RFID has created substantial supply chain efficiencies. But there's a bigger shift coming: what if logistics management didn't require the use of databases because inventory tracked itself?
RFID has created substantial supply chain efficiencies. But
there's a bigger shift coming: what if logistics management didn't
require the use of databases because inventory tracked itself? And
what if goods could intelligently reroute based on need and
efficiency? It would make no difference whether products were
warehoused on another continent, rolling down the highway on a
tractor-trailer, or deep in the bowels of a container ship. In
seconds, you could account for every single product anywhere
between manufacture and customer purchase.
It may sound like science fiction, but it's not far off,
according to Jorma Lalla, CEO of Salo, Finland-based RFID handset
manufacturer Nordic ID. "As the technology becomes more ubiquitous,
a stable international standard emerges and the cost of active RFID
tags continues to decrease, we're seeing a lot of supply chains now
using RFID end-to-end. The detail of data available is incredible.
And while to my knowledge no supply chain yet has the ability to
interrogate tags throughout a product's entire journey, that day is
only two to five years away."
RFID KEY TO OBJECT-DRIVEN
Unlike barcodes, RFID tags can store item-specific information.
Tag information can be very detailed, and information can be added
along the product's journey-time, temperature, inspection,
modification, etc.- from creation or harvest to its final
destination. Tags come in all shapes and sizes. They can be tiny or
large, rugged or pliable. And because ultra-high frequency (UHF)
RFID tags can be read through cartons and walls from distances of 8
meters or more, interrogators can be mounted in truck chassis,
ceilings or walls.
"Not requiring line of sight to read tags is an important part
of quickly accounting for or accessing goods when you need them
within a warehouse, container or elsewhere," says Lalla. "An
employee can walk along quite briskly with a RFID reader and read
all tags, or find the package they're looking for. With barcode,
you have to scan each package - often a painstaking process."
Professor Al Segars, Director of the University of North
Carolina's Technology Research Center, shares Lalla's vision of
end-to-end RFID trackability. In fact Segars, whom the United
States Department of Defense and Fortune 500 companies come to for
advice, sees RFID as a critical components of the next big step in
the evolution of logistics and consulting.
"Barcode technology hit the mainstream about 25 years ago," says
Segars. "The next step, RFID, came along roughly 15 years after
that. But we're still caught in a machine paradigm, which is prone
to inaccuracies. It stands to reason that the best source of
information about an object is the object itself, and object-driven
data is where we're headed."
The concept of object-driven data involves pervasive computing,
whereby information processing has been integrated into everyday
objects and activities. "In practice, this works in much the same
way as taking roll call at school," says Segars. "When the teacher
calls out each name, the student puts up their hand. With RFID
interrogation and response, streams of real time data are
transmitted to and from points across the world to build a complete
and accurate logistics picture, rather than relying on sporadically
FEWER DATABASES, MORE
There are several reasons why object-driven data management is
an improvement on conventional database-driven logistics
"Granted that we have yet to move beyond databases,
object-driven data is an exciting concept for three reasons:
accuracy, cost and visibility, says Lalla. "Doing away with
databases would reduce error. The more databases you have, the more
duplication and inaccuracies you get, especially if goods travel
across disparate systems, as they do for example when the journey
involves a manufacturer, a logistics supplier, a wholesaler and a
Another big reason," continues Lalla, "is cost. Provisioning
resource management systems is expensive. And as you add on
duplicate systems in different locations, not only does the cost of
provisioning and maintaining systems themselves increase, but the
cost of managing the data climbs upwards as well. Finally,
object-driven data would improve visibility and so allow
administrators to increase the efficiency of material flow."
While RFID is now primarily a means of identification, it will
soon evolve into a processing mechanism. As an example, a
procurement request for a tractor part can be matched with
availability across the entire supply chain consisting of several
companies: a manufacturer, a logistics company and a wholesaler,
for instance. The inventory signals its location and availability,
and intelligent agent software presents the best options. Add
another variable such as end use location, for instance in a
disaster relief operation where end user locations are constantly
changing, and more efficiencies accrue.
To take it a step further, tags could be enabled to
intelligently reroute when needed. Professor Segars believes that
in this regard, logistics management is going to follow the same
path as data management. "About ten years ago the IT world came out
with intelligent data transfer protocols for information networks
like MPLS," says Segars. "These protocols permit faster data
processing at nodes thanks to efficient labeling, and they enable
data packets to self-reroute when they encounter "traffic jams‟ on
the network. We are now experimenting with the same concept, only
applied to logistics."
Intelligent routing capability would require another layer of
information-routing intelligence-on RFID tags, something that
Segars believes is technically possible right now. "RFID technology
is now sufficiently mature that tags could be programmed to capture
intelligent logistics information," he says. "What we don‟t have
yet is the capability to manipulate that information to get tags to
change the routing of products upstream. When that happens, I would
guess within the next five years, we're really going to see
PARADIGM SHIFT REQUIRED
Object-driven data management may be a better way of controlling
the flow of goods, but adoption will require a paradigm shift.
Logisticians will likely be loath to relinquish their databases,
relying instead on objects' ability to transmit their location and
As with the adoption of any brand new technology, we are likely
to see dual systems deployed in the early days. Then object-driven
data management will prove itself and become generally adopted,
likely first by defense organizations-the most common early
adopters-and then by high-value and/or high-security logistics
chains, such as the pharmaceutical industry.
NEXT STEP: NANOTECH
But this new method of data management is only the beginning,
according to Segars. "The step after RFID tags is where it's going
to really get interesting," he forecasts. "Nanotechnology is
eventually going to take over, with products and even organic
matter created with trackability built right in. And with pervasive
computing, we will have the capability of tracking everything
produced or consumed on earth."