Canadian supply chain experts see beyond bar codes

Imagine a grocer that through the zap of a machine can launch a quick sale campaign on bread and cereal products nearing the end of their shelf life. It would translate over time into considerable cost savings for that retailer.

EPCglobal Canada along with its U.S. parent company Wednesday

said it would reinvent the supply chain through the rollout of wireless technologies in retail stores. It will be offering a suite of hardware and software based on Radio Frequency Identification (RFID) tags consisting of a tiny chip attached to an antenna and embedded in a retail item such as a VCR. A portable or fixed device using frequency signals then “”reads”” the VCR and can identify, track and store information on the tagged object. This is meant to protect a company’s assets, control inventory, and manage supply chains.

“”It’s a unique identifier for every object,”” explained Dicki Lulay, senior vice-president of the Uniform Code Council and president of EPCglobal US. “”You would know where every asset you have is located.””

Other advantages of The EPC Network over traditional optical barcode systems include annual financial savings estimated at $5 billion in the U.S. alone, freedom from human error, speed (the EPC Network can read 200 to 300 items per second) and reduced data theft, said Lulay.

The EPC Network will make its Canadian debut next year through pilot projects with retailers whose names were not disclosed. What EPCglobal Canada has intimated is that a national rollout will occur within the next three or four years.

With technology and a strategy that proponents admitted are hardly seamless, some local hurdles specific to this side of the border have already cropped up. “”The biggest challenge for Canada is basically the larger companies are subsidiaries of the major multinationals, so the focus of their research dollars is always in the places where the markets are the biggest,”” namely the U.S., said Art Smith, president and CEO of EPCglobal Canada and president and CEO of Electronic Commerce Council of Canada.

For Canadian players to benefit, “”We have to find unique ways to either subsidize the research or get access to the research and, of course, find a way that we can bring the smaller, medium-sized companies into the equation.””

That’s where the Electronic Commerce Council of Canada comes in. Smith said his organization has brought together several groups to share knowledge, including lessons gleaned from RFID experiences overseas.

The EPC Network has also raised questions for retailers on a broader scale. For one thing, there’s the estimated costs of the new system, which has a startup price tag averaging US$100,000.

Moreover, there’s the issue of integrating the new technology with existing systems, which Lulay urged potential subscribers to resolve by talking to “”people who have done it before”” via pilot projects, including Wal-Mart, International Paper, Procter&Gamble and Sainsbury’s.

EPCglobal argued that existing technologies, notably the bar code, will still have a place in the retail chain. Bar codes are “”more practical (used) with a can of soup,”” whereas RFID technology has been more suited to monitoring products stacked on pallets and cases, explained Lulay.

By the end of the decade, however, retailers will see the incremental benefits of RFID tags and will apply radio frequency codes to individual retail units like a music CD, predicts Smith.

In the meantime, EPCglobal US and its partners plan to iron out RFID standards and certification to gear up for the technology’s anticipated adoption.

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