RFID Case Study: Gillette and Provia Part Two: Challenges and Lessons Learned

Challenges

Radio frequency identification (RFID) is constantly on everyone's lips and every relevant enterprise application vendor is hedging its bets towards becoming RFID-ready (see RFID—A New Technology Set to Explode?). Provia Software (www.provia.com), a privately-held provider of supply chain execution (SCE) software solutions, too can tout the results of its RFID endeavors, as it has already put much effort in terms of the proof of concept in the field. Provia and other vendors are responding to the demand for an RFID-compliant solution by Wal-Mart, Target, Albertsons, the US Department of Defense [DoD], and so on.

In September 2003, Provia was likely the first SCE vendor offering full RFID support for a warehouse management system (WMS) in a standard product, which was already compliant with the most recent EPC specifications at the time. Provia has also worked with a high-profile client, Gillette, to test RFID support as part of the client's plan to track selected RFID-tagged items through the supply chain.

As one would imagine, the Gillette project was a hard learning place that tested the ability and determination of multiple technology providers to develop a scalable system based on the successes and failures of the pilot. Namely, in addition to Provia, whose WMS and transportation management systems (TMS) applications had to be meanwhile upgraded to take advantage of EPC data, Sun Microsystems, Alien Technology, and Tyco-Sensormatic, which have supplied different pieces of the required hardware, and OAT Systems, which has provided its Senseware middleware needed to filter the RFID data coming from readers, were the major vendors involved, developing expertise that will not only benefit Gillette, but also many other companies implementing in the future.

One of the major challenges during the project was dealing with bulk reads and misreads (false positives and false negatives), given that a pallet passing through the RFID reader outfitted gates will create a number of scans. To that end, the Senseware software was used to filter redundant reads, like in the case of a pallet driving past the reader, backing up for whatever reason, and driving past again, which would cause the reader to register the tags on the cases three times.

Another case would be if the pallet has already been received into inventory but is scanned again in the location for whatever reason—the software has to recognize that the inventory does not have to be added or adjusted unnecessarily again.

Also, in the case where an item is read in the wrong location, the software should send an alert via an RF terminal to an operator that should then investigate.

The above examples show only a part of the required verifications and additional business logic that RFID deployment may demand. While an additional software layer might help with verifying and reconciling inconsistencies and overflowing or missing data, it is apparent that RFID imposes quite a more complex data manipulation.

This is Part Two of a two-part Case Study.

Part One provided Background and Set the Goals.

Auxiliary Challenges

Having also experienced some occasional auxiliary challenges of the lack of availability of printers capable of delivering RFID, barcode, and human readable labels, also recently in April 2004, Provia has formally partnered with Printronix Inc., the leading integrated supply chain printing solutions manufacturer. As a certified systems integrator and value-added reseller (VAR), Provia will include Printronix's RFID solutions as part of the company's overall RFID solutions offering and work with Printronix to support end users with RFID project planning and deployment strategies. To become a certified RFID partner, Provia had to demonstrate an existing RFID expertise, as well as the ability to integrate and install RFID hardware, an area in which the company has tremendous experience, due to its German-based parent company, Viastore Systems, a developer of material handling and automated storage and retrieval systems (AS/RS) in warehouses.

As a certified partner, Provia is now authorized to resell and support Printronix' Smart Label Developer's Kit, which helps companies create RFID technology applications within their own environments, and Smart Label Pilot Printer, which helps companies migrate from a development environment to RFID pilot activities. Printronix was reportedly the first manufacturer with an ultra high frequency (UHF), Class One smart label solution available commercially to help Wal-Mart, the DoD, their suppliers, and other retailers conform to RFID specifications.

This way, Provia and its Viastore parent represent an over $100 million (USD) in revenues, global SCE, material handling automation and RFID provider, with over $45 million (USD) in software revenue, 400 employees, over 1,000 customers, and more than 2,000 installations worldwide.

Provia and Viastore instead, believe the ability to offer a complete RFID compliance solution, with the software, hardware, and automation equipment needed to minimize investment, while maximizing results, is what companies needing RFID compliance truly desire. Being able to get it from a single company makes it even more attractive, which Provia touts as especially appealing to its third party logistics (3PL) customers as they can offer it as a value-added solution to their clients. As also partly shown by Gillette's project, this RFID solution can be incorporated at numerous points in the supply chain, from manufacturing, to receiving, picking, or shipping. Initially, many companies will naturally look at addressing RFID at outbound shipping in a "slap-and-ship" manner, but to achieve full benefits beyond RFID compliance, companies will have to utilize RFID further back (upstream) in their supply chain. Provia believes this way its solution allows and is designed for incremental adoption throughout a supply chain.

However, RFID has not been the only focus in Provia's recent partnership and product enhancements endeavors. Provia might also stand apart from its peers in the enterprise applications industry by claiming that behind every one of its installations is a satisfied client. The company touts its number one asset is that it keeps its commitments and delivers on time and within budget, and thus, 98 per cent of its clients renew their 24 x 7 support contracts with the vendor every year. Aiding Provia on the implementation front are several integration partners, including general consulting houses like former PricewaterhouseCoopers (now IBM Global Services), Deloitte Consulting, and smaller system integration services firms like former Digiterra (now ciber), St. Onge, and Q4 Logistics.

Lessons to Be Learned

However, RFID compliance will mainly mean additional costs unless the holistic supply chain business processes are also modified in the process. Many enterprises can learn much from the Gillette's ViaWare WMS RFID deployment experience—like in the case of some other success stories (see ROI for RFID: A Case Study), the benefits are achievable, but one has to beware of still unproven technology, which seems to be heading for the mainstream and boardroom priorities, almost directly from scientific labs, of course with a number of caveats due to the technology's current imperfection level (see Leveraging Technology to Maintain a Competitive Edge During Tough Economic Times—A Panel Discussion Analyzed; Part Four: RFID Software Issues). The giant retailers' compliance mandate has unfortunately preceded the achievements of applied physics and computer science. Thus, as noted earlier on, the trickiest part of using RFID at the case and pallet level is to position the readers and accompanying RFID gear correctly for accurate reads, which means lots of testing, manual intervention, and tweaking on the floor before reliable automation is reached.

Another related big issue encountered so far by most early adopters would be getting an accurate scan on a mixed pallet. Although RFID tags can in theory streamline complex stock-handling processes, enterprises should not assume that this will reduce the need for staff and processes in exception handling. On the contrary, in many cases, the resource overhead requirements for RFID implementations can often be even greater than traditional methods. Namely, there are no built-in default reconciliation mechanisms to validate whether the data was read or not, which imposes visual checking of goods as a means of reconciliation, which in turn might remove much of the touted value proposition of RFID. Thus, enterprises should conduct a number of tests on the plant, since laboratory-environment testing is often insufficient to determine RFID tag performance in real-life warehouse environmental and system conditions.

Users should also look warily at many vendors' claims of RFID readiness by citing that their applications are designed for automated data collection since they have been doing it for years with RF technology, and that RFID is yet another format. Namely, the process to gather bar code data follows a very structured and straightforward practice, requiring a stock keeping unit (SKU), case, or pallet to be scanned individually, whereas in an RFID environment, data collection is not such a discrete process. Namely, a bundle of data is collected in one scan, regardless of the variety or quantity of product, while in its raw form, the data shows no relationship between pallet, case, and SKU, necessary for inventory integrity. Therefore, a middleware, similar but more complex than those developed for RF and automated material handling equipment is required by the vendors to transform an unstructured mass of data into an input the system can understand and process.

In any case, software vendors will thus have to create new data fields to cope with the inevitable data deluge by ensuring that data tables, transaction systems, and data warehouses can handle all of it, and, in general, vendors have been by and large responding to the RFID challenge. The likes of Provia, which have significant installed bases in retail and consumer product goods (CPG) sectors, have been leading the pack by developing the RFID interface to their applications and by adding software modules or upgrading their products to cope with the serial numbers in RFID tags.

But these effective albeit not necessarily neat solutions will still require suppliers and retailers to deploy specialized middleware and hardware that manages the huge amount of data coming from the readers. The more proactive companies are thinking about putting the right business intelligence (BI) and analytic architecture in place to make the most out of RFID data and drive better supply chain decisions. Users should also check out these vendors' services at their labs that include consulting and integration, as well as painstaking testing multiple vendors' RFID equipment and hardware to simulate real-world supply chain business processes. Full and careful consideration should be given to vendors that have experience laboring in trenches and that have done it many times before.

One of the main obstacles is the lack of integration, since there is a dearth of software tools from enterprise application integration vendors to get data from RFID tags and readers into existing business systems, meaning that companies are often forced to do expensive custom integration work. Together with the vendors, they will have to devise ways to filter out false or redundant reads and pass on only useful information to enterprise applications. Managers will have to devise policies on how much data to collect from RFID systems, which signals to record, which to ignore, and which to forward to a transactional system or a person for an action. Such policies could eventually be coded into business logic of SCE applications or some type of a business-rules engine, and then enforced by middleware.