15 September 2008

Anush Kumar, Microsoft’s worldwide product manager for RFID explains how the wireless technology helps automate the supply chain by carrying out core activities such as identifying, locating and counting products.

This story began for me when I joined the BizTalk team responsible for developing a radio-frequency identification (RFID) platform, two and a half years ago. We identified that businesses wanted to use RFID to track products through their supply chain and to drive efficiency through improved accuracy and planning. However, a combination of factors - the cost of a tag and the complexity of building a production solution, rather than a pilot – was holding back adoption.

Early on we were experimenting with pilots in Denmark and we were lucky if we got north of 60 per cent reads. As far as hardware goes, we were at the equivalent stage as the early cell phones that you needed a backpack to carry. Now we have slim smart phones and, similarly, the RFID readers now have better form factors, and are moving from being dumb devices to smart devices that can perform logic at the edge of the enterprise.

We are now reading 99.9 per cent in different frequency ranges, and we can manage the loss of the last tenth of a per cent. Standards have been developed and ratified and Intel has introduced its chipset, bringing down the cost and effort required to produce different types of reader. We are now beginning to see readers in the US$1,000 price range, that cost US$3-4,000 two years ago and now there are readers with different mobility form factors, such as wand style readers. So the hardware is well understood and the frequencies reliable.

Early adopters are getting tags at seven US cents each when purchased in volume, nearly at the five US cents magic mark. This is all moving the focus from bits to the business. The question remains, however: why so costly to build and scale a software solution? Why is it so hard to discover, configure and manage RFID readers? This part of the solution needs to be easy to plug and play. It’s a significant challenge but it’s where Microsoft can get it done.

We’ve overcome the bar to working with best of breed hardware by supplying a RFID manager tool with our RFID platform. This easy to use console makes it straightforward to manage the device infrastructure, to choose devices and set properties. In this way, a retailer can use different types of RFID reader in different parts of its supply chain from the same RFID platform. There’s no custom code involved so costs are reduced. The RFID platform sends the data received from the readers to Microsoft’s business process management BizTalk Server and thence into the rest of the organisation.

The next challenge has been to make use of all the data coming from the edge of the enterprise, to reduce the noise and increase the relevance before the data hits the back end systems. An event processing pipeline looks at streams of data from RFID readers and makes sense of them. For example, if pallet A is in the back store and it moves past two antennas, the reader will tell you it’s read a tag at antenna X and it’s read a tag at antenna Y. The event processing pipeline, with the ability to execute declarative rules on RFID events, does the inferring and places pallet A in the front store.

Many installations are getting 100 per cent reads from RFID tags, often putting more than one tag on a pallet to cover all the ways it can be handled. There are multiple layers of redundancy and the RFID platform is able to infer events have taken place if necessary. For instance if pallet B has arrived at point Y, the software can work out that it must have passed point X even though no read from point X was logged. The platform reads tag ID, user data and a time stamp and the software layer can add certain metadata according to declarative rules. It can also write to a writeable tag and decommission it.

The RFID platform is stand-alone, operating on a spoke, managing devices at the edge of the enterprise. At the hub you have BizTalk Server, or other application, possibly via Web Services, handling the data. Developers don’t need to worry about horizontal plumbing tools but can rapidly integrate RFID with their retail solutions. Already companies like 3M and HighJump are exploiting this business process management layer. These companies recognise that the return on investment is not just in the four walls but also across the supply chain. The license fee structure is designed to match the supply chain structure and includes a branch edition of BizTalk for volume deployment at the spokes.

The RFID platform aggregates events and sends the data to the back-end systems, where it becomes available to the business as a whole. This data can drive dashboards and key performance indicators or reside in a data warehouse ready for deeper analysis. Microsoft Dynamics applications can sit on top of BizTalk RFID and warehouse-based functions are enabled by the platform.
For products that need to be accurately combined or supplied in precise measures, from car parts to pills, RFID can identify and count. It will also have a role to play in tracking returns and complying with product recalls.

I hope you’ll agree that we’ve come a long way, from 60 per cent to 99.9 per cent average reads at the hardware level, and the making available of high quality data to enterprise systems. How that data is used to drive productivity and customer service we must wait to see. But it’s clear that manufacturers who are RFID savvy will very soon be doing both those things and more.

This article first appeared in the Winter 07 issue of Prime magazine

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