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RFID Network Software
Some major retailers are forcing their suppliers to adopt radio frequency identification (RFID) software in all products delivered to their stores indicating that RFID technology is not a flash in the pan, but is very likely to be state of the art within a very short window of time. One major retailer, Walmart, has required that its top 100 suppliers install RFID tags in all delivered cases and pallets, beginning in January 2005. All others who wish to continue doing business with this particular retail giant will have to implement RFID tagging systems by the end of 2006. Because it is very likely to become the dominant technology in the supply chain world, it may behoove distributors and suppliers to begin ramping up now before their retailers demand it, simply as a means of keeping up with, or staying ahead of, the competition.

In an RFID system, a tag carrying a microchip and a low-frequency radio signal antenna is embedded directly into the packaging materials that surround a product. RFID has become preferable to traditional bar coding systems because it is significantly more versatile and can provide much more information. The primary advantage is that each piece of merchandise can carry its own unique serial number, which significantly expedites tracking, inventory processes, ordering processes, and a great deal more. In fact, RFID may well revolutionize the entire supply chain process in coming years.

RFID software is not without issues and concerns, however. Difficulties arise because radio waves are block by electromagnetic interference, absorbed by water and reflected by metal. Thats why retailers who use the technology extensively have only plastic shopng carts in their stores. Metal ones reflect the radio signals making their inventory processes impossible.

At present, there are few technicians who can competently install RFID systems, much less maintain them. The companies who supply the systems are training more, but there simply arent enough to meet the demand. Systems integrators are in even shorter supply and many of those have never done a large-scale RFID deployment. They are learning as they go.

Once an RFID system is installed, its data generating capabilities are so immense that finding something to do with the data it generates becomes problematic. One consumer goods manufacturer estimates that tracking all of its items from production to point of sale would require 3,000 to 30,000 database transactions per second. If all of that data is simply stored in an already overloaded database, querying against it increases in complexity. And, most of the companies that sell RFID software, do not integrate it with the rest of a customers system. It becomes time-consuming and costly to determine how to get the data to integrate with accounts receivable and inventory management systems already in place.

The companies that have fully implemented RFID systems say that they have realized substantial benefits from them in terms of less lost merchandise and have boosted their capabilities for real-time inventory tracking, to name a few. Shipping errors, according to the companies using RFID, are almost eliminated.

However, while costs in the long run will very likely go down, initial system implementation will be costly. A company that implements an RFID system has to deal with more than the costs of the tags and readers. Other equipment, like metal shopping carts, may have to be replaced, new conveyor systems installed, and employees trained to use and maintain the new systems.

RFID may well revolutionize the entire supply chain, but there will be some implementation costs and transitional issues that will arise as companies rush to adopt these types of systems.

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