Interview

SAP to announce new R/3 RFID technology

Robert Westervelt, News Director
Many companies have been scrambling to devise an RFID plan. Does this make sense?
I think, for any new technology, it's to the company's benefit to experiment early. Some very large companies have been experimenting for up to two years now, and they know this technology cold. I suggest a company start out simple by buying some tags and [putting] them on products to determine what tags work in the environment. What kinds of RFID products can we expect from SAP over the next year?
The solution that we're going to market is a combination of a compliance package for Wal-Mart and an initial package that includes our Auto-ID infrastructure. It is the first product from SAP that is totally Java-based. We have a back-end adapter that plugs into an SAP application server and comes with a visibility portal and an event management application. You'll be able to replace assumptions with knowledge -- where a product is, how much it sold for, and how much inventory is available to sell. What are the current technical limitations of RFID technology? Are reports of problems with RFID reads well-founded?
Wal-Mart, in their testing, is getting great reads once they get the cases off of the palates. They're getting reads of 500 cases a minute, with 100% accuracy on a conveyer. It depends on the process and the palates, so companies need to experiment with the material flow in their warehouse. One of the main problems can be custom applications. We've done a survey of our

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top customers several times, and we've found that the ones using RFID are all using custom apps -- and they hate them. What kind of investment is SAP making in RFID?
We have invested heavily in this area. It has evolved from a little science project into [an] SAP product that will stand alone and can be deployed rapidly. We are now at the point where we've taken substantial feedback from some companies. Consumers have no real legal protection against loss of privacy through the use RFID technology. Do you support regulations that provide legal protection?
I don't know if any additional regulations are required. Privacy may be an issue when you get into tagging of individual items, and that's when it gets more complex, but we're not there yet. There are some privacy issues, for example, with large bulk-buying clubs, in which customers buy a case of toothpaste rather than an individual tube or a case of razors or even print cartridges. Wal-Mart has been very serious with how they're going to deal with this, and that's encouraging. Wal-Mart is working on this by developing a very visible label that says the item is tagged with an RFID chip, and consumers will be given the chance of killing the tag. Although RFID technology may be viable, do you agree with reports that storing the massive amounts of data being collected may be a problem for some company databases?
It's not as hard as people think. It's safe to say that, in the initial process, over 75% of the RFID data is good until orders are filled, and [it] shouldn't be stored beyond that. Above and beyond the initial process of closing out that purchase order and making [a] payment, a company may want to keep some data for analytics such as cycle dates and order time, but it's not as complicated as people think. What types of features will be included with this software?
The bottom line is that our solution is aimed at one internal benefit to our customers, and that's event management within our warehouse management application. It includes automated shipping and receiving processes. It will totally automate the ordering process, and a company will be able to track that order from the time the assets are assembled to the time they're put in a case and shipped [to] the time they are received, with the minimal human involvement. What suggestions do you have for companies researching and experimenting with RFID?
Don't buy anything until you prove what works best in your environment. Be proactive and start by getting your numbers. The first half-year, don't even think of your back end. Think of a very simple process that may be labor intensive or slow, and think of deploying RFID internally first, and then think about how to extend that process to a partner which can be an inbound supplier, manufacturer or distributor. Once a company understands what the benefit is, then they're ready to talk about what's their operational plan and the processes they want to enable, and they can follow a migration path to back-end integration.

FOR MORE INFORMATION:

Check out our Featured Topic on SAP's Zencke on RFID, NetWeaver and upgrades.

Check out our Featured Topic on SAP and RFID.

To provide feedback on this article, contact Robert Westervelt.


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