Financial incentive for the adoption of new RFID system

By Rick Pendrous

- Last updated on GMT

Financial incentive for the adoption of new RFID system
Manufacturers could at last have a business justification for adopting radio frequency identification (RFID), following the launch of a new managed...

Manufacturers could at last have a business justification for adopting radio frequency identification (RFID), following the launch of a new managed supply chain data exchange information system from BT Auto-ID Services.

While the benefits of investing in RFID, such as increased product visibility and improved availability on supermarket shelves, are relatively obvious for the major multiples, logistics managers in the food manufacturing sector have struggled to make a financial case. That is until now, however. BT Foodnet is a new service targeted at manufacturers, which addresses some of the cost obstacles they face.

It is an online solution, providing, manufacturers, supermarkets and third-party logistics providers (3PLs) with 24h access to real-time synchronised data on the status of all stock items as they flow through the supply chain - from manufacturer to point of sale.

BT Foodnet is a "federated system", which can be tailored to suit the level of data visibility those using the service wish to provide their partners. For example, manufacturers could make stock visible to others in their supply chain from despatch onwards alone. "[The system] is not driven by the retailer," says BT Auto-ID Services chief technical officer Eddie Dodds.

What makes the system potentially attractive to manufacturers, however, is that BT Auto-ID Services is willing to carry the costs of installing data capture hardware when manufacturers sign up to the full managed service. "What we are trying to do is establish collaboration," says Dodds. "The concepts are not that different from EDI [electronic data interchange] in terms of being able to do the data exchange. The difference is its doing it in an affordable way."

The collaborative system, which is based on huge software investment from BT Auto-ID Services, allows product tracking using RFID or barcodes. It provides full traceability and can link sources of ingredient batches with individual products on the supermarket shelves. Such targeted capability, claims BT, would considerably reduce the costs of product recalls - such as that recently experienced by Cadbury.

"The data capture mechanism could be anything," says Dodds. "As it happens we are using RFID, but you can also use 2D bar-coding or linear bar-coding."

Dodds continues: "If you buy it from us as a managed service, we will provide data capture mechanisms for you, regardless of technology: it could be HF [high frequency RFID], it could be UHF [ultra-high frequency RFID], it could be bar-coding - or trays could have all three mechanisms on them - and we could provide a single interface to the manufacturer."

Although BT Auto-ID Services has been closely involved with Marks & Spencer's RFID roll-out, Dodds stresses that BT Foodnet has been designed for use by different manufacturers, 3PLs and retailers, operating different enterprise resource management (ERP) and other IT systems.

"We can do that because the systems that lie behind it are common," says Dodds. "What we won't burden you with is the capital cost of the outlay in the manufacturing side. If we can come up with the right model, then we can provide it as a managed service regardless of the data capture system."

He cites the example of one pilot trial in The Netherlands where the technology behind BT Foodnet has been used to track assets - specifically trays used to transport fresh produce - and also verify that produce in the trays has been properly washed.

Related topics: Supply Chain, Services, IT

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