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First Thoughts
  By Dan Gilmore
Editor-in-Chief
 
     
  March 9, 2004  
RFID Compliance - Deju Vu All Over Again?  
 

With thousands of our corporate and technology vendor readers toiling away to create solutions for RFID compliance for Wal-Mart, Target, and soon others, for many of us there's a strong sense of "we've seen this all before."

 

The early 1990s produced a similar wave of logistics "compliance" requirements for bar code labeling and EDI (advance ship notices), largely under the umbrella of the "Quick Response" retail-consumer goods initiative.

 

The parallels to today's RFID activity are remarkable. Here are a few:

Then, as now, large retailers led the charge by requiring unique identification of pallets and (sometimes) cases, then with UCC-128 serialized bar code labels. RFID is needed now, as we've noted here before, because it's apparently just too hard to scan.

Operationally, the challenge was moderate for full pallet labeling, somewhat greater if you were already picking at the full case level, and monumental if you were picking in full pallets, but had to label at the individual carton level. This generally occurred for suppliers to "flow through" retail operations, where orders to a retail DC were aggregated to full pallet quantities, but suppliers had to place a "Mark for" label on each case for a specific store.
There were significant and related IT challenges. Then, it involved the tremendous effort to support EDI transactions, as well as map data to a variety of retailer-specific label formats. While the "standards" for UCC-128 labels and VICS EDI formats provided a structure, each retailer's specific implementation of the standard was different. We could see something of the same thing now. EPC provides the basic tag standard, but specific use of the tag bandwidth, related EDI requirements, and the level of bar code "co-existence" could create a similar scenario of multiple formats and compliance requirements for vendors. Fortunately, RFID can largely piggyback off of the EDI investments - the real IT challenge will be around enabling core operation systems, and managing all that data.
The goals of Quick Response included significantly reducing the retailer's time to receive shipments, enabling flow through processes, increasing visibility to in-transit goods, and, of course, reducing pipeline inventories and reducing retail stock-outs. Sound familiar?

 

The current RFID wave really has to be seen as part of this continuum that started with Efficient Consumer Response (ECR), then moved to Quick Response, then CPFR, and now RFID, each with the goal of improving the flow of information and goods. In each case, there has been the active hand of the Uniform Code Council (albeit a little late to the game with RFID, taking on the Auto ID Center's role), and a substantial amount of investment for both suppliers to comply, and retailers (and consumer goods companies themselves) to take advantage of the new technology. The previous efforts (ECR, Quick Response, etc.) have all led to important gains - but from my view, not nearly to the level the initial promotion of the initiatives promised.

 

There are a variety of lessons learned in these first compliance go-rounds, and we'll cover them in out next issue. But for those for whom this looks like a revolution - maybe so, but it sure seems a lot like what we saw in 1992.

 

Is "RFID compliance" similar to these earlier bar coding and EDI requirements? Is RFID what is finally needed to reach the promise of ECR, Quick Response, etc.?  Let us know your thoughts.

 
     
     
 
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