Suppliers starting to enjoy benefits of technology
Developing better supply chain management, in which electronic product code (EPC) and radio frequency identification (RFID) play key roles, will improve the automatic identification of goods.
EPC establishes a unique classification of objects on a serialised basis and can be thought of as a logical extension of the international barcode system. However, it also identifies products more precisely, so it is possible, for example, to trace an individual soft drink can and, with the encoded data, even track each previous movement and how long it has been in one place.
One key is the use of RFID tags. These hold electronically encoded data about the specific product or item to which they are affixed. The information is readable by scanner, decoded by a processor and stored in the corresponding database, where it is updated as necessary after each significant event or change of status along the supply chain.
When initially registering, a company will assign a basic EPC code for each item that it handles. A record of this standard will be held in the company's own server and act as part of the 'global address' mechanism.
Although EPC/RFID is gaining popularity, some enterprises are still adopting a wait-and-see attitude to its implementation. Wal-Mart, one of the world's largest retailers, took a big step forward with its EPC pilot in the United States market in 2005.
During its implementation, Wal-Mart expanded the number of EPC-equipped distribution centres and participating stores. This year, Sam's Club, the United States-based bulk discount offshoot of Wal-Mart, started the EPC rollout in Asia, allowing its suppliers to enjoy the benefits of this revolutionary technology.
'An EPC enables a global supply chain to provide visibility from top to bottom, and from the manufacturer to the sales floor,' said Krissy Sample, director of Sam's Club's enterprise process management office. 'It gives analysis of inadequacies about the supply chain, enables an organisation to address related problems at the root, provides near real-time visibility and promotes the use of exception management.'
Ms Sample said that, with Wal-Mart's EPC Adoption Programme in Sam's Club, the store had enjoyed a fall in out-of-stock items, fewer out-of-date products, lower prices and greater satisfaction among its members.
She added that while EPC could result in consumer benefits, it could also promote brand loyalty.
The success of EPC pilots at Sam's Club would serve as a model for the Asia-Pacific region where a growth in the RFID supply chain market was expected, she said. During the GS1 Hong Kong Supply Chain Management Excellence Summit 2008 at JW Marriott Hotel today, Ms Sample will give a keynote presentation to share her experiences of EPC/RFID in her organisation.
Ms Sample developed and established the concept of process management office with Sam's Club, which was adopted by Wal-Mart as the best practice model. She is an integral team leader in the development and implementation of EPC and its applications within RFID.
Ms Sample believes that EPC/RFID can help businesses attain sustainability in the future.
'We envision a world where products and raw materials can be recycled without manually sorting, stacking or separating by material, colour and type, and products can move from manufacturer to market with no waste or wasted energy,' she said.
In line with the theme of 'Achieving Business Sustainability' at the summit, Ms Sample will outline the roadmap of RFID development for a sustainable business transformation.
Together with the summit's organiser, GS1 Hong Kong, Wal-Mart worked out pilots on new technology standards with its supplier partners. The two companies have also worked together to define and solve business problems faced by them and other suppliers and retailers within the confines of the GS1 standards development process.
Last year, the two companies teamed up with Foshan Chancheng district government to drive the adoption of EPC/RFID technology in Foshan to enhance the efficiencies of import and export activities between the Pearl River Delta and the global market using EPC/RFID technologies.
'The importance of supply chain management cannot be overstated,' Ms Sample said. 'We believe that recognising its excellence will be a catalyst to the overall improvement in this arena.'