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March 10, 2023
Supply Chain Digest Flagship Newsletter


This Week in SCDigest

bullet UPS and a True a RFID Tipping Point? bullet SCDigest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet New Stock Index

New Chain Cartoon Caption Contest!

bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts


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Session 4 - As is/To be Process Modeling

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first thought


Supply Chain Graphic
of the Week


US Manufacturing Gaining Ground

This Week's Supply Chain Numbers

It will be awhile before eTrucks are Widespread, CEO Says
Amazon Closing Many Go Stores
Breakthrough in Trailer Loading Techology?
Lowes Takes a Different Approach to DC Strategy


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Expert Insight

The Importance of Pre-Shipment Inspections for Supply Chain Diversification



Pre-shipment Inspections can Mean the Difference Between Success and Failure in Today's Competitive Global Market


Viktor Haggstrom
Marketing Content Specialist


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 This Week's SCDigest OnTarget Newsletter

Cartoon, Top SCDigest Stories of the Week

With the ProMat show in about week, in what year was its predecessor show first held?
Answer Found at the
Bottom of the Page


UPS and a True a RFID Tipping Point?

This year marks the 20th anniversary of the most important year in the history of the radio frequency identification (RFID) market.

Why do I say this? It was in 2003 - also the founding year of SCDigest - that we had two major events:



UPS is known of course for its industrial engineering prowess, and smartly applying new technology, so I have no doubt the ROI is there.

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• The launch of the EPC standard for RFID tags under the organization that has become GS1.

The announcement of the (infamous) Walmart RFID tagging "mandate" for pallets and cases, which was very consequential even as it ultimately failed.

Early on, there was excitement in the air, and dozens if not hundreds of hardware, software, consulting and other types of companies enjoying dreams of windfall profits to make this happen at Walmart and its many thousands of vendors, and then virtually with all the rest of the retail and consumer goods companies.

But as I will write more about later this year, from the start there were troubles, as the Walmart program for a variety of reasons couldn't gain traction. That in part led to numerous predictions relative to "tipping points" for RFID.

That term was bandied about quite a bit, mostly by technology companies and consultants, and applied to several scenarios: one was a general tipping point, when RFID would gain some real market mass and become mainstream.

There were also predictions for tipping points where it would make financial sense for consumer goods vendors to go ahead and tag all their products even if a lot of retailers had not yet required tagging, with an add-on notion that as a result such vendors could use the technology for their own distribution benefits as well.

Just one problem: the tipping points were never reached.

Now RFID is again to a degree in vogue, with Macy's, Target and more recently Walmart back with tagging mandates at the item level, for all three driven by ecommerce and the need for highly accurate inventory levels in store to support BOPIS and store fulfillment of on-line orders.

But somewhat under the radar, I think we may have reached a true tipping point and it is this: UPS has determined automated reading of parcels being placed into trucks with RFID is more cost effective than bar code scanning.

It is rather strange actually that 20 years into the modern RFID era, and that basic question remains largely unanswered. At least, it appears, until now.

Here is the story: as part of its recent Q1 earnings call, UPS said plans to deploy its "smart package" initiative across the rest of its US delivery network this year after its initial success at select facilities in 2022, according CEO Carol Tome.

The program involves placing RFID tags on parcels and wearable RFID reader devices on employees to eliminate manual scans, reduce misloads and speed movement in the delivery giant's sorting hubs.

About 100 UPS facilities are currently using the RFID system. UPS said it plans to invest $140 million in the initiative in 2023 as it implements the technology at its 940 remaining US buildings, Tome added.

CFO Brian Newman said UPS expects to reduce the rate of misloading parcels on to the wrong truck from one in 400 to one in 800 and perhaps even better than that. Misloads are now just one in 1,000 at 50 of the buildings using the RFID system.

And here is the key paragraph: when the program was first announced, UPS said that the use of RFID tags and wearable reader would eliminate 20 million manual bar code bscans daily for the employees loading parcels onto trucks.

UPS is known of course for its industrial engineering prowess, and smartly applying new technology, so I have no doubt the ROI is there.

Now I acknowledge that UPS is handling humongous parcel volumes, and no doubt the ROI calculation would change at more normal distribution operations.

But after much study analysis, testing and real-world results, UPS has decided that a massive initial investment and spending an extra five cents or so per parcel to embed an RFID chip in a label is worth it to eliminate manual bar code scans.

Does this signal the death of the bar code in distribution? Of course not, and any changes will take years to play out.

But UPS is saying RFID is the way to go versus manual scanning. Perhaps we'll look at this as a true tipping point soon enough.

What is your reaction to these thoughts on UPS as RFID tipping? What would you add? Let us know your thought at the Feedback section below.


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Understanding Distributed Order Management

Highlights from the New "Little Book of Distributed Order Management"

In this outstanding Videocast, we'll discuss DOM, based on the new Little Book of Distributed Order Management, written by our two Videocast presenters.

Featuring Dan Gilmore, Editor along with Satish Kumar, VP Client Services, Softeon

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On Demand Videocast:

The Grain Drain: Large-Scale Grain Port Terminal Optimization

The Constraints and Challenges of Planning and Implementing Port Operations

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Featuring Dan Gilmore, Editor along with Dr. Evan Shellshear, Head of Analytics, Biarri.

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On Demand Videocast:

A Blueprint for WMS Implementation Success

If You Want a Successful WMS Project, You will Find the Blueprint in this Excellent Broadcast

This videocast lays out the keys to ensuring your WMS implementation goes smoothly, involves minimal pain, and accelerates time to value.

Featuring Dan Gilmore, Editor along with Todd Kovi of Radix Consulting and Dinesh Dongre of Softeon.

Now Available On Demand


Feedback will return next week.

With the ProMat show in about week, in what year was its predecessor event first held?

A: The National Material Handling Show was launched in 1949.

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