The system will mean plant workers and managers will have to learn how to control and use the technology in their daily work. In a new report IBM identifies the hurdles and benefits facing thecommercial rollout of a global system for tracking products. The process is being led by the Global Commerce Initiative, based in Germany, and the non-profit industry association, EPCglobal.
The system being built would combine radio frequency identification (RFID) technology, existing communications network infrastructure and the Electronic Product Code (EPC), a number for uniquelyidentifying an item.
The system is being built to help companies save money along the supply chain through the Global Data Synchronization Network (GDSN). Nestle, Coca-Cola, PepsiCo, Mars, Danone Hormel Foods, Kraft,Unilever, Metro and Sara Lee are among the food companies that have signed up to implement the system.
A unified data system would allow changes in information about product sizes, weight, name, price, classification, transport requirements and volumes to be immediately transmitted along the supplychain. For example it would allow shippers to immediately know if the amount of product stacked on a pallet had changed, or give a retailer time to adjust display space.
For EPC to work and for the industry and end-consumers to benefit from this technology, retailers and consumer goods manufacturers need to operate with the same information, Zygmunt Mierdorf, amanager at Metro Group and co-chairman of the GCI steering Group.
"That requires a new kind of collaboration, where information flows freely, securely and in a standards-based way between trading partners," he stated in the report. "DeployingEPC technology alone is not enough; we need to implement business processes changes to unlock the value."
For individual companies IBM recommends managers:
- ensure they have clean, accurate product data that is aligned with trading partners and is being shared automatically with those trading partners through global data synchronisation;
- embrace the exchange of supply chain information and collaboration via the EPCglobal Network as a source of business improvement, not as a threat;
- establish clear information-sharing work practices with trading partners and support the use of free, standards-based information exchange; and
- collaborate with retailers to craft a workable plan for EPC deployment focusing on high potential categories and the most accessible supply chain opportunities.
Peter Jordan, the director of international B2B strategy at Kraft Foods and co-chairman of the GCI steering group said companies already using the system need to demonstrate the benefits in acompelling way so as to get others to join in the effort.
"Companies should begin reporting EPC results in terms of business value, such as a reduction in out-of-stock orders rather than reporting technical results such as read rates," hestated.
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