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Jack Link's Beef Jerky Case Study: "Wal-Mart Didn't Make Me Do It" Part One: RFID Philosophy for SMEs and Company Background

Written By: Joseph J. Strub
Published On: March 8 2005

Introduction

Companies have been implementing radio frequency identification (RFID) technology at the not-too-subtle but benign pressures being applied by their largest customers—customers like Wal-Mart, Department of Defense, and Target, just to name a few. This case study looks at one company who did not wait to be dragged into an RFID environment. Its approach and rationale may spur others to take a similar, proactive position. Read on to see if this idea applies to you and your organization.

Remember back to your childhood when you showed up in clothes that were not particularly hip or in fashion? Your standard excuse probably was "My mother made me do it." Forced by pressures being applied by their larger revenue generators, when it comes to RFID, some companies also are exclaiming, "My customer made me do it." This clearly is not the case with Jack Link's Beef Jerky.

Some companies are pulled into technology, dragging and screaming. (Can you say, "Y2K?") Others embrace new technology, wanting to be the first to enjoy the projective benefits. We should appreciate these early pioneers. Then there are companies that realize the benefits of new technology but want the implementation to be on their timetable without a gun loaded with threats of lost customer sales, pointed at their corporate heads.

The latter is the case of Jack Link's Beef Jerky. Like so many small to medium enterprises (SME), Jack Link's had been intensely focused on manufacturing and making the best beef jerky available. As a result, the company had neglected its supply chain for several years. After establishing itself in the market, the company had the time and wanted to reverse this set of circumstances. RFID, together with its underlying best practices and support of Microsoft, would allow Jack Link's Beef Jerky the ability to leap-frog over technology and gain visibility across the supply chain.

This article looks at a company that chose to get in front of the technology curve before the information highway passed it by. Specifically, the article examines

  • RFID philosophy for SMEs
  • Company background
  • Approaches to RFID implementation
  • Expected benefits
  • Lessons learned

This is the second article on Microsoft's approach to RFID for SMEs. The first was an article on the Danish snack food manufacturer's, KiMS, implementation experiences and can be found at ROI for RFID: A Case Study. Microsoft was selected again for this case study due to their willingness to make their customers available for candid, "on the record" discussions and the openness with which these customers discussed the project's successes and failures. In the Jack Link's Beef Jerky case study the reader will see how a four-phased approach allowed for the gradual assimilation of a new technology into an organization—an approach that might bear repeating.

This is Part One of a three-part note.

Part Two will describe the implementation phases.

Part Three will discuss the expected benefits and lessons learned.

RFID Philosophy for SME's

As you might expect, currently only large enterprise-wide companies are venturing into the uncharted waters of RFID. They have deep pockets and can afford to work in a heterogeneous landscape. Typically, these companies have multiple business objectives, multiple enterprise resource planning (ERP) packages, and multiple third party or legacy applications that must communicate with each other and be able to process RFID data. Equally important, large companies have the economic resources and staffs to deal with these far-ranging problems and circumstances. Consequently, the larger companies can take advantage of RFID without disrupting the considerable functions and features that their systems already provide. For large companies, this makes a lot of sense.

Microsoft and other software companies of a similar mindset, however, are catering to the needs of SMEs that have a totally different set of circumstances and available resources. And, when you consider that these vendors' ERP offerings already target the SME marketplace, this approach only makes sense.

With the typical SMEs IT landscape being more homogenous, a different approach and strategy to RFID data integration is needed. This strategy goes counter to the philosophy of providing a stand-alone RFID facility, which could require a dedicated IT staff for maintenance, support, and training. Realistically, the services component would be significant as integration with the various business applications must be designed and constructed. SME software vendors, like Microsoft, provide their RFID capabilities by embedding a specific middleware layer within the ERP solution. Not only does this reduce IT complexity by eliminating otherwise required external software, the embedded approach also reduces training and promotes familiarity as users access the RFID capabilities through common and existing user interfaces. Additionally, expected benefits and savings are realized sooner as out-of-the-box integration is provided with core business processes or content.

By providing a common interface to access RFID capabilities, the embedded RFID strategy for SMEs provides a flexible and extensible framework for partners to implement customer specific and unique solutions, thereby acknowledging that no one vendor can support the myriad of potential RFID applications. As a result, simple, affordable, and feature-rich ERP software with an embedded RFID solution can be available for SME's. Microsoft and other software vendors are pioneering RFID in this space.

Finally, software vendors catering to large enterprises do or will surely offer RFID in both flavors: stand-alone and embedded. However, for SMEs, the embedded alternative makes the most realistic and cost-effective sense. Understand that this is not thinking on the level of "E=mc". Let's face it; where do we find electronic document interchange (EDI) and barcoding today? Sometimes the obvious needs to be restated.

Company Background

Headquartered in Minong, Wisconsin, (US) Jack Link's Beef Jerky (http://www.linksnacks.com/) is one of the fastest growing global meat snack companies and its beef jerky is a leading US meat snack brand. The company's premium products include Natural Style Jerky, Kippered Steaks, Meat Sticks, Meat and Cheese Twin Packs, and Gourmet Sausages. Jack Link's Beef Jerky snacks are shipped worldwide.

Jack Link's Beef Jerky employs over 2,000 people and operates five manufacturing sites in the United States, two international plants, and a central distribution center. A typical production plant has 12 production lines, producing 1,500 SKU's. The company has sales offices in six countries with over 6,000 customers including Wal-Mart, the US Department of Defense, and Target. Jack Link's Beef Jerky works with over 3,000 suppliers and vendors. Using any measurement of size, the company definitely falls into the classification of mid-market or SME.

Even though Jack Link's Beef Jerky will not be impacted by a trading partner's mandate until at least 2006, the company decided to be proactive concerning RFID after receiving a letter from Wal-Mart, one of its largest and most significant customers. While not forcing the company to act, Wal-Mart opened Jack Link's Beef Jerky eyes and developed a business awareness of RFID and the benefits to be derived. Since RFID was not a question of if, but when, the company—following its quest to continue to better serve its customers—decided to seek compliance before the actual mandate.

Prior to RFID technology Jack Link's Beef Jerky was largely dependent on manual data entry and lacked visibility across the supply chain. The company quickly discovered RFID to be an important enabler in addressing some of the company's key pain points to include

  • Strengthen regulatory compliance
  • Improve manufacturing lot tracking and traceability
  • Develop visibility into operations
  • Streamline and automate many of the distribution processes

These objectives are all aimed at shortening cycle times with resulting lower inventory levels and improved customer service levels. In a nutshell, Jack Link's Beef Jerky found that it could become a better company by using RFID in connection with effective ERP software. Furthermore, the combination of these technologies would enable Jack Link's Beef Jerky to compete more aggressively with larger enterprises and help to level the playing field.

This concludes Part One of a three-part note.

Part Two will describe the implementation phases.

Part Three will discuss the expected benefits and lessons learned.

About the Author

Joseph J. Strub has extensive experience as a manager and senior consultant in planning and executing ERP projects for manufacturing and distribution systems for large to medium-size companies in the retail, food and beverage, chemical, and CPG process industries. Additionally, Strub was a consultant and Information Systems Auditor with PricewaterhouseCoopers and an applications development and support manager for Fortune 100 companies.

He can be reached at JoeStrub@writecompanyplus.com.

 
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