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SAP advises to take RFID one step at a time

Radio frequency identification technology should be deployed in a step by step process, according to a supply chain executive at SAP.

CHICAGO -- After working with some of the earliest radio frequency identification (RFID) adopters, SAP is documenting and sharing some of the initial challenges enterprises face when deploying the technology and integrating data into back-end systems. Amar Singh, a supply chain expert who serves as SAP's vice president of global RFID and business development, sat down with at the RFID Journal Live conference, where over 1,000 attendees gathered to learn more about the technology. Singh discussed the path some SAP customers are taking and revealed a road map that companies can take to gain benefits from an initial RFID deployment.

Enterprises want to have a revolution but they've got to do it in an evolutionary way.
Amar Singh,
vice president of global RFID and business developmentSAP

Are SAP customers moving from initial slap-and-ship RFID deployments to a broader implementation of RFID? What is SAP seeing right now?

Amar Singh: Last year RFID was still very much in the slap-and-ship models to meet Wal-Mart requirements. Now I've certainly noticed a lot more people are interested in understanding what is beyond RFID. There are two elements surrounding RFID and that's data collection and data usage. Last year it was all about data collection, such as placing tags and deploying readers. Now it's about how to begin using the information to drive business benefits and that's really the sweet spot.

Many of our customers are live and using our product. From Day 1 they all were looking beyond slap-and-ship. Most people who went purely on a slap-and-ship approach did so as cheaply as possible. They are now coming to us saying they've met the mandates and now how do we invest in moving beyond initial slap-and-ship deployments?

What is the best step for companies that want to deploy a complete RFID package?

Singh: There are three phases of RFID. The first phase is what I call the physics of RFID. Every RFID reader works differently in different environments; humidity plays a role, moisture plays a role and disturbances play a role. The end result after much experimentation is that the readers are deployed and the company is collecting data. The first phase is all about cleaning the data, filtering it and having ii useful.

The second phase is what I call 'data used today.' Companies here need to begin leveraging the data they're collecting in their existing applications. Here the company is using the real time and accurate aspects of RFID, and it is improving inventory visibility and collaboration, such as tracking and tracing, and doing it with analytics. If you feed in more accurate data and more real-time data, the enterprise will get better results out of it.

The third phase is what I call 'data used tomorrow.' It is having the enterprise begin to use the additional data reads that it is collecting along the process. In this phase the enterprise is now enabling new business processes. The enterprise is taking store-level demand data and conducting better demand planning and better replenishment. The enterprise is actually tracking its product from womb to tomb.

Is deployment an easy progression from the first to the third phase?

Singh: Customers tend to want to go very quickly from the first phase to the third phase. That is the right direction, but don't brush over the second phase, because there are benefits to be achieved by replacing your existing data. For example, starting with getting daily visibility from a store partner is a good place to start, rather than trying to move quickly and get real-time visibility from that partner. That enterprise begins to change its business processes in a systematic way with better replenishment systems. It doesn't help if an enterprise gets real-time information, but it can't use it. Enterprises want to have a revolution, but they've got to do it in an evolutionary way.

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Where does SAP XI fit into RFID?

Singh: Enterprises are using device management software to deploy and manage tags and readers, and that's where SAP is partnering. Then there is the Auto-ID infrastructure, which is based on the local environment. This is the business logic happening at the local level. Essentially, it associates the business process communicating data to the back end. XI plays a role of taking the data from the Auto-ID infrastructure and putting it into the back-end systems. It acts as the information bus.

Are companies finding SAP XI a challenge?

Singh: Many of our customers have held back not because of it being a challenge from a technology or implementation or cost point of view, but more so because of the vocabulary that we have.

Companies are being held up, because the word integration has a very scary meaning to people. The word integration is a very bad word in my mind for this environment, because in here you are not integrating, you are only linking. It is not like a typical plug-and-play technology. But it is no way near the integration mindset that you have with a typical enterprise application. That involves multiple touch points, hundreds of users and different data sets. This is very simply linking data into the back end.

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