Early adaptor Wal-Mart is the prime force behind the change with its decision requiring 100 key suppliers to be ready to implement RFID by Jan 2005, and all suppliers by 2006.  Companies such as Coca-Cola, Gillette, Johnson & Johnson, Kraft, Pfizer, Procter & Gamble, Unilever, and others are all climbing on board.

Just as the European marketplace led adoption of digital wireless cellphone technology, so too has been the case with early adoption of RFID in retail supply chain systems.  United Kingdom retailer Marks & Spencer last year started adding RFID to the 3.5 million reusable plastic containers used to deliver produce, calling it the largest supply chain application of RFID technology in the world.

Smart IT managers are insisting on vendor solutions that are more open, flexible, and less risky, are easier to integrate with existing systems, and have faster ROI with a lower total cost of ownership.  No longer will savvy clients accept proprietary closed systems from a single supplier that locks them into long-term and supposedly seamless solutions.

The challenge is to bridge the gap between what is working today and extending the role of Auto-ID technology into a fully integrated, open system that incorporates the most appropriate devices and IT architecture to suit customer applications.

The idea of automating the retail enterprise is not new.  Bar codes have made a significant contribution to productivity since their general acceptant more than 15 years ago.  They have grown steadily in use and usefulness.  Barcodes are so ubiquitous that they are virtually transparent to users as they track parts and products through manufacturing processes, distribution channels, supply chains and retail operations.

Bar codes have been identified as one of the most significant automation technologies ever put to work.  A study conducted by Hewlett-Packard over a decade ago on the effectiveness of automation technologies found that bar codes boasted the best return on investment of all technologies studied.

RFID tags are similar to bar codes as each employs an identifying code for tracking purposes, but bar codes are limited in that they must be in the line of sight and individually scanned with a reader.

RFID uses wireless radio transmissions to readers with a variety of ranges and material penetration characteristics.  In general, the larger the antenna, and the higher the power, the longer the reading range.  In all cases, the maximum power levels are capped by regulatory and safety limits.

1. Low-frequency (125 kilohertz or 134 KHz) RFID will penetrate most packaging material, but have a short read range – usually from 1 to 30 inches depending on power levels and antenna sizes.
2. High-frequency (13.56 megahertz) RFID is somewhat capable of penetrating packing materials and generally had an operating range of 4 to 40 inches.
3. Ultra High-frequency (UHF) RFID is unable to penetrate many packing materials, and is greatly attenuated by water.  In free air, UHF RFID tags operating at around 915 MHz can be read at ranges from 5 to 20 feet depending on reader and antenna, creating a large read envelope.

If barcode scanning is like spear fishing, then RFID is like fishing with a net.  You scoop everything under your boat, whether you can see it or not. Then, you sift through the results to see if you want to keep what you’ve captured – Clarke McAllister, RFID Solutions Manager

According to Accenture, an RFID open systems solution can increase inventory turns by 10 to 15 percent.  Greater inventory turns facilitate capital resource optimization, increased margin procurement and significant reductions in obsolete inventory levels.

Supply chain metrics postulate that every month inventory remains on the retail shelf 5% – 10% of its resale value and 7%-20% of its revenue contribution is lost.  Retailers must manage on-hand inventory diligently to optimize profitability.  Supply chain managers today must be better informed with accurate real-time data to stay competitive.

While managing inventories to lower levels, care must be taken to avoid out of stock (OOS) situations.  Consumers cannot buy what isn’t there, resulting in brand switching and store hopping both of which reflect negatively on the retailer.  RFID is an enabling technology that promises to help minimize OOS by affording full and accurate visibility of inventory levels in all parts of the retail supply chain.

RFID tags and readers are beginning to show up in more places than just the warehouse and shipping dock.  Ski passes, toll cards, and employee access cards are becoming more commonplace.  Advancement in both technology and standards, coupled with falling prices, are resulting in a rush to incorporate RFID into existing systems.

Info source: Evolution Or Revolution? Bridging The Gap Between Bar Code Legacy Systems And RFID In The Retail Supply Chain

You cannot predict the supply chain of the future independent from your predictions about the world of the future.  Oil price, globalization, world trade policy, etc. will affect what the future supply chain looks like.

Dan Gilmore listed out 10 fairly specific things that are likely to occur by 2015. The filter was some combination of “most likely” and “most important,” though largely subjective in that regard.

1)      A majority of companies will have reconfigured their supply chain networks: many companies have supply chain networks developed for a different era.  Fuel prices, green SCM concerns, virtualization, and more will lead many to fundamentally rethink those networks over the next few years.

2)      Supply chain planning and execution will start to blur: the need for response based on market demand and other factors is outstripping current planning cycles.  Tactical and even some operational planning become completely intertwined with execution, causing changes in organizational structures, processes, and technology.

3)      We see substantial drops in overall inventory levels: inventory levels have remained flat for many years now.  But the lessons of this recession – that maybe we can get by with less combined with supply chain simplification programs and new technology – really will drive step change drops in inventory levels by 2015.

4)      Web-based supply chain software comes to dominate the landscape:  the author hasn’t completely been on this bandwagon until recently, but by 2015. This is how it is going to be – which has many major implications.  More confident of this than about any other prediction on the list.  Once this becomes the lead approach for almost all vendors, the shift will happen rapidly.

5)      Green drives transportation collaboration:  the logic of transportation collaboration and the financial benefits haven’t done it.  The capacity crunch of 2005-06 almost did, but then that went away.  Green will finally do the trick, and we will see much more cross company load-linking and even sharing of capacity between competitors.  But does this commoditize logistics?

6)      Visibility to everything, all the time: the technology is really here now to have it, and despite RFID’s current lack of direction, it will become very commonplace by 2015.  Understanding what to do with this information is the real challenge.

7)      Common deployment of real-time performance management: scorecards are rear-view looking; dashboards help you make decisions right now.  A few companies have already developed these kinds of capacities; they will be widely deployed by 2015.

8)      Distribution centers will take one of two paths: lean and un-automated (and very flexible), or automated to a level hard to imagine today.  Again, something else we have written about in the past; see new Automated Case Picking (ACP) Report for more details. The robots are coming.

9)      Supply chains focus turns to emerging markets:  this is simply where the growth will be – perhaps explosively so.  This will impact product design, pricing, logistics and much more.  Those that get it right will have huge corporate advantage – as companies like Procter & Gamble smartly focus on “micro-logistics.”

10)   Digitization increases impact on the physical supply chain: a tsunami wave of digitization is happening, dramatically impacting physical supply chains, often in not obvious ways.  We all know that itunes is putting CD makers out of business, but that filters down to record stores and even producers of the plastic resins used to make CDs.  Think the future is bright for watch and mid-level camera makers when you will have both in your cell phone?  I have many more examples.  Look forward on how your company – and your career – might be impacted by digitization.

DHL bought Seattle based Airborne Express for 1.05 billion in Apr, 2003.  With that acquisition and subsequent merger, DHL’s U.S. market share immediately leapfrogged to 5 percent, making it the no. 3 American player, challenging FedEx and UPS in their home market.  However, the truth turned out to be that DHL lost nearly 10 billion dollars in the last five years in the U.S. market since the acquisition, and finally in Nov, 2008, DHL announced the largely withdrawal from U.S. market, surrendering its market share to the big two.

DHL will continue to offer international import and export services in major U.S. metropolitan areas, which account for 90% of international traffic.  DHL revealed a proposal in May, 2008, to use UPS to provide domestic air express services for its customers.  In this proposal, UPS would provide all airlift services for DHL Express U.S. domestic and international shipments from airport to airport within North America.  UPS would provide major main hub package sorting services at UPS’ Louisville, KY’s based hub.  The deal was supposed to be completed by the end of 2008, but it was finally announced in Apr, 2009, that the negotiation talks were ended without agreement because they were not able to come to draw a conclusion acceptable by both parties.

DHL fell back on ABX Air and Astar Air Cargo, the subservice cargo airlines that have been handling its U.S. air business for more than five years.  Its air hub was relocated from Wilmington, Ohio to Cincinnati to sort 250,000 packages nightly.

This year, four major international carriers – USPS, FedEx, DHL, and UPS – were participated in this contest although all were not pre-notified.  Two destinations were chosen purposely for this particular delivery mission, one for domestic and the other one for international, and both seemed to be a bit challenging to reach.

Ula Bator – the capital city of Mongolia

Opp – located in Alabama, USA, a small town in southern Alabama

Who are the winners?

Domestic delivery – Winner was USPS priority mail, the cheapest and the first to deliver (amazing!).  UPS was the second one and then FedEx after it.  DHL did not participate in this part since it dropped its U.S. domestic service since Nov last year.

International delivery – Winner was DHL, UPS and FedEx came the second and the third respectively, and USPS was the last one..  Delivery charges varied a lot as well. The scorecard of time and cost was like this:-

The scorecard

As a summary, this contest was a fun and exciting project.  This project provided us a unique and creative angle to appraise carriers.  It may be too rash to conclude the overall performance of these carriers based on one single delivery.  However, since the contest has been conducted annually since 2003, we indeed can draw some conclusion regarding the carrier’s performances when looking at the contest results spanning several years.

For details and past races, please click Prof. John Bartholdi’s website.

• Shipment exact location in the transportation process
• Whether the package is opened and the contents exposed to light
• Shipment package temperature, too warm or too cold
• A built-in accelerometer will detect drops
• Real-time alerts and analytics between trusted parties regarding the above vital signals of a shipment

To be released in spring, 2010, the system will initially target at life sciences companies, allowing doctors and labs to be alert of critical package status change in the transportation and prepare for receipt of time-sensitive packages.   Regarded as the successor of RFID tags, a cell antenna will send out collected data whenever the package is not in flight.

FedEx claimed in its document that, SenseAware can be easily adopted as it does not require a costly software installation, infrastructure or large managed-service commitments.  SenseAware initially cost $120/month, though after the trial run, FedEx predicted that the price will run down considering the service to be available worldwide and later wide adoption by logistics services in other industries other than medical.

Each character is represented by a pattern of wide and narrow bars.

A barcode reader uses a photosensor to convert the barcode into an electrical signal as it moves across a barcode.  The scanner then measures the relative widths of the bars and spaces, translates the different patterns back into regular characters, and sends them on to a computer or portable terminal.

Every barcode begins with a special start character and ends with a special stop character. These codes help the reader detect the barcode and figure out whether it is being scanned forward or backward.

Some barcodes may include a checksum character just before the stop character. A checksum is calculated when the barcode is printed using the characters in the barcode. The reader performs the same calculation and compares its answer to the checksum it read at the end of the barcode. If the two don’t match, the reader assumes that something is wrong, throws out the data, and tries again.

There are different barcode symbologies, each with its own particular pattern of bars. The UPCcode used on retail products is an all-numeric code; so is the Interleaved 2 of 5 Code. Code 39includes upper case letters, digits, and a few symbols. Code 128 includes every printable and unprintable ASCII character code.

Ordinary bar codes are “vertically redundant,”, meaning that the same information is repeated vertically. It is in fact a one-dimensional code. The heights of the bars can be truncated without any lose of information.

However, the vertical redundancy allows a symbol with printing defects, such as spots or voids, to still be read. The higher the bar heights, the more probability that at least one path along the bar code will be readable. The height of the bars can be truncated without any lose of information.

Examples of one-dimensional bar codes are shown below as Codabar, Code 39, and Interleave 2of5. The most common 1D symbologies are Code 39, pioneered by the defense and automotive industries; the Universal Product Code (U.P.C.), first employed by the supermarket industry in 1973; Codabar, used early on by blood banks, Interleaved 2-of-5 (ITF), Code 128. Another is Code 93.

This article credits barcode 101 and www.makebarcode.com