Supply Chain Management technologies: RFID and XML

Principles of Information Systems, Fifth Edition

Chapter 2 Slide 2

RFID: Radio Frequency Identification

Reader (transmitter/receiver)

Tags that respond to a radio frequencyTransmits unique Identifier 8-12 bytes

(characters) at different frequencyDoes not have to be line-of-sight

Lots of Applications Software

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Applications

Check out: POS terminal

Inventory tracking (Wal-Mart, DoD)

Animal tagging

Secure car key (Toyota)

Purchase gasoline (Mobil)

Doorway access control

Principles of Information Systems, Fifth Edition

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Passive vs. active tagsPassive tagsUses transmitter RF signal for powerLong lifespanCosts start at about twenty cents Low frequency: range is less than 6 inchesHigh frequency: range up to 12 inchesUltrahigh frequency: several yards

Principles of Information Systems, Fifth Edition

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Active tags

Active tag

Uses a battery to respond

More range, up to 1Km

3-5 year battery life

Can cost several dollars

Principles of Information Systems, Fifth Edition

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RFID quiz

Q 1: What kind of tags are we using in lab?

Q 2: Does the orientation of the tag affect the ability to read its contents? (try all of the tags)

Q 3: Does placing a tag in a metal can affect the ability to read its contents?

Q 4: Why is the flat tag Read/Write?

Principles of Information Systems, Fifth Edition

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RFID advantages

Less human intervention

Real-time information flow as item changes state: Off truck Off shelf Purchased by customer

Reduce lost or stolen inventory

Machine-to-machine communication Package routing

Principles of Information Systems, Fifth Edition

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RFID challenges

Interference with object or other readers

Range

Data formats and standardizationDifferent countries allocate different

frequencies

Cost for readers, tags and system

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Bar Code vs. RFID scanning

Line of sight

Right-side-up (must physically align carton)

Can tear

Limited amount of data

No encryption

Can read through objects

Tag orientation less of a problem

Can store megabytes of data, if needed

Can be encrypted

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Principles of Information Systems, Fifth Edition

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Principles of Information Systems, Fifth Edition

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UPC versus EPCUniversal Product Code

For Bar coding

Contains MFR ID number (5 digits) and Item Number (5 digits)

Electronic Product Code for RFID apps.

Contains 96 bits: EPC manager ID (MFR) Object class Serial number

Can track a particular case of toothpaste !

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RFID supply chain integration

Supplier:

Store EPC & pallet contents on DB

EPC has supplier-ID and database key.

Ship pallet with tag

Buyer /shipper:

Pallet arrives

automatically scanned for EPC

Get contents from Supplier DB

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RFID futureRFID tag as a sensor Temperature: spoilage Package opened: drugs

Larger memory: Car repair history Medical history

Can we recycle RFID tags? Chip-kill technology

Privacy: track movement of people (ID card, E-ZPASS) or post-sale disposition of items.

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Supply Chain Management (SCM)

Definition:

A cross-functional inter-enterprise system that uses information technology to help support and manage the links between some of a company’s key business processes and those of its suppliers, customers, and business partners

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SCM Life Cycle

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Electronic Data Interchange (EDI)

Definition:Involves the electronic exchange of business transaction documents over the Internet and other networks between supply chain trading partnersStandard industry format to send RFQ, PO, Receiving notice, payment notice, Invoice, Payment remittance notice, etc.Now being replaced by Web and XML.

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EDI Activities

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SCM Planning FunctionsSupply Chain Design – optimize network of suppliers, plants, and distribution centers

Forecasting customer demand by sharing demand and supply forecasts instantaneously across suppliers and distributors

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SCM Execution FunctionsMaterials Management – share accurate inventory and procurement order information, ensure materials required for production are available in the right place at the right time.

Collaborative Manufacturing – optimize plans and schedules while considering resource, material, and dependency constraints

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SCM Execution FunctionsCollaborative Fulfillment –order management, vehicle scheduling, and support the entire logistics process, including picking, packing, shipping, and delivery in foreign countries

Supply Chain Event Management – monitor every stage of the supply chain process, from price quotation to the moment the customer receives the product, and receive alerts when problems arise – visibility!

Principles of Information Systems, Fifth Edition

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Business Value of SCMBenefits of SCM:

Reduces production and distribution costs More information => less inventory, less lead times needed

Improves timeliness of shipments Increases supply chain “velocity”More accurate fulfillment Improves “visibility” of supply chain

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SCM BenefitsFewer employees needed to manage supply chainBetter customer satisfaction: less stock-outsStrategic relationship with suppliers, enables new business partnerships: Collaborative Planning, Forecasting, and

Replenishment systems (CPFR).Collaborative downstream customer

service, marketing, and relationship management.

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Technical Challenges of SCM

Acquisition of secure extranet

Software can be confusing, contradictory and not sculpted to their needs – difficult to implement.

Emerging standards, high costs.

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Organizational challenges

Changes company structure: resistance from employees wedded to traditional processes, leads to lack of adequate collaboration among marketing, production, and inventory management departments within a company

Supplier reluctance or incompatibility issues.

Lack of proper demand planning knowledge: leading to inaccurate or overoptimistic demand forecasts. Need new tools and guidelines.

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Fun with XML

Standard way to describe structured data within an organization or across the Web (metadata included in file).

Can check validity using a set of rules in a schema definition (xsd) file, using a validating XML parser.

Principles of Information Systems, Fifth Edition

Chapter 2 Slide 27

XML rules

Each element tag is user-defined, within angle brackets:

<purchaseOrder> … </purchaseOrder>

Each element can have sub-parts:<Address>

<street> 515 Loudon Rd. </street> <city> Loudonville </city>

</Address>

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XML Schema definition file

Rules besides “well-formed” XML:Order of elements

<xsd:sequence> … </sequence>Data type: string, date or decimal

<xsd:element name=“zip” type=“xsd:decimal” />Optional elements:

minOccurs=“0”

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Chapter 2 Slide 29

On Your Own

Coors Case worksheet

XML exercise

Online quiz