Enhancing ERP System with RFID:

Logistic Process Integration and Exception Handling

Dickson K. W. CHIUSenior Member, IEEE

Eleanna KafezaAthens University of Economics

& Business

Tai Pui WongKai Pan Mark

Dept. of ComputingHong Kong Polytechnic

University

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Introduction Traditional stand-alone ERP systems are

inadequate to handle the current requirements of logistics applications

Solution: integration of RFID and mobile technologies with Web-enabled applications

Enables management to utilize accurate information for analyzing business performance and quick decision

Help the integration of logistic processes and the handling of exceptions in key business processes

Dickson Chiu 2006 RFID-3

What is RFID?What is RFID? Radio Frequency Identification A generic term for technologies that use radio

waves to automatically identify people or objects

a technology that uses radio-frequency waves to transfer data between a reader and a movable item to identify, categorize, track...

There are several methods of identification but the most common is to store a serial number that identifies a person or object on a microchip that is attached to an antenna

The antenna enables the chip to transmit the identification information to a reader

The reader converts the radio waves reflected back from the RFID tag into digital information that can then be passed on to computer systems

Dickson Chiu 2006 RFID-5

TagInsert

Antenna Reader

Firmware

Customer’sMIS

Host

ApplicationSoftware API

TCP/IP

Power

~

Asset

Asset/Tag

RFID System ComponentsRFID System Components(block diagram)(block diagram)

Stakeholders

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ERP System

Roaming-Management

Warehouse’sStaff

Roaming UsersWarehouse’s Staff

RFID Server

Data Excha

nge

Internal GereralStaff

Salesman

Management

Internal

External

Roam Staff

IT Staff

Process integration conceptual model

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Process Request ERP TaskRFID Task

Warehouse Module

Object Identify Task

Stock Item

Object Registration Task Object Disposal Task

1 0..*

1

*

Web-enabled system with Mobile Users Infrastructure

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Users withSmart Mobile

Users withPDA/Pocket PC

ERP System

Internal Firewall

Roaming Users

Desktop PCs

Front-End Web Server

DMZ

External Firewall

Internet

Roaming UsersEg. Salesman

Desktop PCs

LAN

Roaming UsersWarehouse’s Staff Warehouse

Integration of RFID with ERP System

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ERP System

Internal FirewallFront-End Web Server

DMZ

External Firewall

Internet

LANRoaming UsersWarehouse’s Staff

Warehouse

RFID Server

Overall system integration

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Web Engine

Web Enabled System and RFID Integration

RFID Database

ERP System

RFID Engine

Process Execution Module

Process Definition Module

System Workflow and Application

Logic

Incoming Request

Outgoing Response

User Identification

Incoming Request

Outgoing Response

ERP Database

Selected data integration scheme

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CO_HDR (Contract Header)

PK co_no

co_status co_date expect_delivery_date additional_discount co_net_amount customer_code customer_address_1 customer_address_2 customer_address_3 customer_address_4 contact_person

CO_DTL (Contract Details)

FK1 co_no item_description qty reserve_qty delivered_qty unit_price item_discount total_item_price

DN_HDR (Delivery Note Header)

PK dn_no

FK1 co_no delivery_date delivery_status dn_date customer_code customer_address_1 customer_address_2 customer_address_3 customer_address_4 contact_person

DN_DTL (Delivery Note Details)

FK1 dn_noFK2 item_code item_desc issue_qty reserved_qtyFK3 rfid_tag_no

CN_HDR (Collect Note Header)

PK cn_no

FK1 dn_no cn_date cn_status co_no customer_code customer_address_1 customer_address_2 customer_address_3 customer_address_4 contact_person

CN_HDR (Collect Note Details)

FK1 cn_noFK2 item_code item_desc return_qtyFK2 rfid_tag_no

Item Master

PK item_code

item_desc qty_on_hand total_reserved_qty unit_cost unit_priceFK1 rfid_tag_no

RFID Master

PK rfid_tag_no

rfid_tag_status rfid_tag_desc rfid_tag_info rfid_tag_registration_date rfid_tag_disposal_date

Receiving process with RFID

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Start Receive ASN

Truck Arrives

Product Confirmed

against ASN

Put away order

created

Move into locationsFinish

Update Order’s Items

Delivery Status

Shipping process with RFID

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Start Picking with RFID

Enough Stock?

Re-schedule Delivery

Date

No

Move to Staging

AreaYes

Apply new Pallet LabelOnto Truck

Send ASN upon confirmation of Truck departure

Finish

Reserve Stock

Exception Handling

PartialDelivery

Yes

No

Typical system flow

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User Login

Select appropriate Program Module

System Response

Create/Modify TransactionEnquiry

Create/Update/Cancel

Warehouse Module Other Modules

Update Transaction

RFID Validation

Example exceptions handlingScenarios/Events Exception Handling1. Order, delivery location or

schedule delivery date is confirmed, but amendment on order, delivery location, or schedule delivery date is needed.

As stocks are not checked out yet, only amendment of order is needed.

2. Stocks are checked out at Warehouse, but amendment on the order, delivery location or schedule delivery date (if not delivered) is needed.

As the stocks are reserved, the warehouse needs to release the order to go back to the normal situation so that Stock Administration Department can amend the order. During this release operation, the ERP Engine will update stock availability status and RFID tags information through the RFID Engine. After the order is confirmed again by the Stock Administration Department, if items are added or the quantity is changed, warehouse staff needs to run the operation again as shown in Figure 7.

3. Stocks are checked out at Warehouse, but order cancellation (if not delivered) is needed.

As the stocks are reserved, warehouse needs to release the order back to normal situation so that Stock Administration Department can cancel the order. During cancellation, the ERP Engine updates the Stock availability status, cancels the reserved quantity, and updates the RFID tags information through the RFID Engine.

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Example exceptions handling (2)Scenarios/Events Exception Handling4. Stocks are checked out at

Warehouse, but amendment on the order, delivery location or schedule delivery date (if stocks are on the way) is needed.

Order status is updated as "Pending" by warehouse staff. During the "Pending" status, external warehouse staff is permitted to delay delivery of the goods to the customer location until further notice and the goods need to be sent back to warehouse for further actions.

5. Stocks are checked out at Warehouse, but cancellation of order (if stocks are on the way) is needed.

As the stocks are reserved, the warehouse needs to release the order back to the normal situation so that the Stock Administration Department can cancel the order. During cancellation, the ERP Engine updates the Stock available status, cancels the reserved quantity, and updates the RFID tags information through the RFID Engine.

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Example exceptions handling (3)Scenarios/Events Exception Handling

6. Stocks are delivered; external warehouse staff has not updated the order status yet, but amendment /cancellation of order is needed.

External warehouse staff needs to update the order status to "Completed". No other action is carried out. For additional items or change in quantity, the Stock Administration Department needs to revise the contract and amend the related items quantity and create separate delivery order or collection note. For cancellation, refer to case (8).

7. Stocks are delivered; external warehouse staff has updated the order status already, but amendment/cancellation of order is needed.

The Stock Administration Department needs to revise the contract and amend the related items quantity and create a revised delivery order or collection note. For cancellation, refer to case (8).

8. Stocks are delivered, but order cancellation is needed.

The Stock Administration Department needs to create a collection note and send to the Warehouse. Warehouse staff then goes to the customer’s premise to collect the stock and then uses a RFID Reader/Scanner to scan the RFID tags for that package lot. While updating the collection note order status, the ERP Engine updates the quantity in the Warehouse and also the RFID tag's information through the RFID Engine.

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Summary User benefits

Powerful and user friendly to perform their daily operations. Improved organizational interoperability and connectivity Anytime anywhere system and information access Overcome tedious and error-prone manual exception handling

Management’s benefits Costs against the benefits - productivity Customer service quality - consistent handling of the

exceptions IT Staff’s benefits

System development and maintenance efforts improved Systematic fine-grained requirements elicitation (of exceptions) Capturing requirements from domain specific knowledge (of

exceptions)

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Future Work Performance measurement Other unexpected exceptions and events Artificial intelligence in handling the exception

events Agent-based assistance to internal staff and

external users Empirical measurements of the improvement of

staff performance and customer satisfaction

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Question and Answer

Thank you!Contact: dicksonchiu@ieee.org