Lessons Learned

More than a year and a half after Wal-Mart's initial deadline for its top suppliers, our industry has learned a great deal, however it is still searching for many answers around RFID. This month, Consumer Goods Technology caught up with Saleem Miyan, Checkpoint Systems' vice president and general manager, Global RFID and Emerging Technologies. Miyan offers his insight into lessons learned from the company's new state-of-the-art EPC/RFID testing and validation center, while also lending his perspectives on RFID deployment, the technology's development and where he sees our industry heading.

When complying with a customer mandate or kicking off an internal RFID project, what first steps should consumer goods (CG) executives take?
The key to success is choosing the right products, the right application and the right location for deployment. The best way to get started is to consider all of the areas of the business that might be impacted both negatively and positively by introducing RFID.

Initially, you should focus your efforts and energy on identifying 'problem' areas. Put a focused team in place that understands the business issues and can work to identify specific "pain points". The goal is to determine which ones can be resolved without the introduction of RFID, possibly through process changes, and then prioritize the others in order of strategic value. There are companies who can assist in this process. Keep in mind, nobody understands your business as well as you do, so it's always a good idea to have done your "pre-work" before engaging any suppliers or advisors.

Secondly, you want to be sure you have considered all aspects of the implementation -- the best way to get started is to pilot in phases.

• Phase 1: Start with proving to yourself that the technology works for your products and your process. There are test centers around the world that provide independent testing and compliance validation.

• Phase 2: Introduce RFID to your facility, in one site, for one or two applications -- where you have full control and visibility. Make sure you have established criteria for measuring the success or failure of the technology. Having a contingency plan in place is also recommended -- other suppliers, other RFID frequencies, etc. to re-test if appropriate.

• Phase 3: Begin formal rollout, taking what you have learned, developed and experienced and applying this knowledge across multiple sites and locations.
  In general, benefits can be realized across the entire supply chain and into the retail environment. The key is determining where the technology works, for what applications and at what price and performance points. This approach will validate broader deployment for your company.

At this time, is there a business case to be made around RFID for CG firms?
There is no such thing as a generic business case, particularly for the consumer goods industry, given the strong variances in product type, costs and supply chain handling. There are valid business cases that have been developed for manufacturing industries such as automotive and aerospace and for retailers, such as Wal-Mart, Metro and Marks and Spencers. These very public initiatives are also phased in their deployment -- beginning much in the same way as I have described above, but either accelerated into more applications or locations and/or more suppliers and broader integration with IT and physical infrastructure. All however, have the same objective to validate the feasibility of RFID, at all levels of goods, distribution units, traded units and consumer units.

Some of these retailers, in addition to their suppliers, have taken the opportunity to test RFID for tracking pallets as well. Some have seen a strong ROI, providing enhanced supply chain visibility and more flexible handling. Others have seen little or no value at the pallet level. The drivers for these conclusions have been dependent upon the specific items on the pallet and not the specific company.

Other companies have seen value by tagging at the item level, in the retail store, where the benefits are related to shrink, on-shelf product availability, replenishment planning or inventory control.

many challenges are discussed concerning metals and liquids, but what challenges do certain products present when considering tagging flexibility?
The myth that one tag fits all should be dispelled right here. One tag DOES NOT fit all applications. As a company that manufactures four billion RF tags a year, we have learned RF tag design and manufacturing is an extremely complex process and is further complicated depending on the product to which it is intended to be attached.

There is however a glimmer of hope. Some experienced companies, agnostic in their approach to RFID frequencies and with the capability to develop tags in various shapes, sizes and materials, can help in selecting the right frequency and the right form factor to meet any requirement -- unique as it may be.
RFID has been around for a number of years. Hundreds of millions of tags are sold every year to support a variety of applications - from automotive toll tagging and animal identification, to access control and transport ticketing. All have had their challenges in the beginning but are now considered 'mainstream' RFID applications. Consumer goods will be the same.

How soon can the market expect tags that are competitively priced and, more importantly, work?
The cost and performance of RFID tags are key deliverables in supporting the broad adoption of RFID. Tag manufacturers recognize the importance of lower cost products, which perform up to industry standards. The cost of tags includes many variables, such as antenna designs, chip volumes, capacity requirements and form factor. All of these will impact price of the finished product. Another important factor here is that the tag suppliers in the marketplace today are at different levels of maturity. Those who have been in the industry for many years are more likely to be in a position to offer lower cost, better performing products -- due simply to experience and a strong understanding of RF systems. Also, they most likely have the ability to drive down the cost through volume purchases, faster production systems and investments in the development of improved components.

Many companies talk about their roadmap to low cost tags, however, only a few talk about the performance of these tags and how they comply with a customer's unique requirements. One option to validating the performance characteristics of RFID tag suppliers is to test them in compliance centers of independent test houses, where users can benchmark the tags from various suppliers. The recommendations and conclusions will provide insight as to the strengths and limitations of various tag suppliers and their specific offerings, thereby helping to drive adoption of the technology.

What trends will emerge within the CG industry regarding RFID?
RFID has moved beyond an emerging technology concept. Pallet and case level tagging will be the main focus for initial technology adoption and return on investment analysis from the consumer goods community. However, there are a number of high-value products, such as consumer electronics, interactive media (CDs, DVDs etc), pharmaceuticals and apparel, where item level, in-store tagging is providing tangible value now.

Companies that possess a thorough understanding of how RFID can help them to cut costs and drive value for their products and services will benefit most from the technology. Evaluating the performance of RFID tags and readers is just one variable.

Equally important, consumer goods manufacturers must consider the importance of complementary software, data synchronization and systems integration to help ensure accurate data flow and as a result, more effective supply chain operations.