One of the primary goals for the LawsonGuru Letter is to keep you updated on the latest IT trends, and explain how they affect you as a Lawson client. RFID is one of those "new technologies" that is about to become commonplace.
RFID. Stands for radio frequency identification. Heard about it? If not, you will soon. If so, you’re probably looking at how you can implement it, and exploit its virtues in your organization. RFID promises to reduce labor costs, increase accuracy, and provide greater operational efficiency throughout your supply chain. I think it can do even more.
In fact, RFID may become as familiar to us as UPCs and SKUs. "In 10 years, RFID will be as ubiquitous as the bar code," says Dick Cantwell, VP of global business management for Gillette.
Gillette and Wal-Mart are starting a pilot RFID project to test this technology. Specifically, Wal-Mart is building "smart shelves" at two of its stores. Gillette will attach RFID tags to razor blade packages that ship to these stores. The plan is that the RFID chips will monitor the merchandise’s location and current inventory. When supplies on store shelves run low, Wal-Mart’s clerks will know to refill them; when stockroom shelves run low, the system orders more.
RFID tags–based on technology developed by at MIT–are essentially miniature transmitters as small as a grain of rice, and cost about 5-10 cents each. RFID tags are programmable and can store data, such as tracking numbers, etc. "Proximity-based" antennae located throughout a facility read the RFID tags. The key is that an RFID has to be within the range of an antenna to be located. If you’ve used a ExxonMobil’s SmartPass, or a radio-based toll-collection system like SmarTag or ezPass, it’s the same concept.
So, what does all this mean for you as a Lawson user? Well, RFID is the potential to have a transaction with its own "memory".
Think about how some of your Lawson applications could benefit from this technology:
- Receiving inventory items becomes a "non-event"–your inventory essentially can "receive itself" since your distributors and suppliers can program the RFID with your PO numbers and details, and your RFID system can "receive" the goods.
- Items are automatically tracked in/out of your warehouse, possibly eliminating physical inventories. However, I still don’t think you can eliminate pilferage. What’s to stop an employee from leaving the RFID in the warehouse and stealing the item itself?
- Medical supplies can be added to the case cart, and tracked to a patient’s bill. As they are used, they automatically "re-order" themselves.
- Assets, as they arrive, can "match themselves" to their purchase order, and become part of your payables chain, since your supplier has programmed the PO# into the RFID. The purchased item then becomes a traceable asset.
Now that you understand some of the practical applications of RFID, how soon do you think you’ll see it used in conjunction with Lawson? My feeling is that it is at least 3-5 years away. You, as an early adopter, have to build your RFID infrastructure of antennae, akin to adding 802.11b/wireless ("WiFi") access points.
Once RFID becomes a mainstream technology, it will surely take Lawson a couple more years to figure out how to integrate this technology into the product in a seamless fashion. Historically, Lawson’s first attempt at integrating new technology is to create a loose "bolt-on" that is not very well integrated with Lawson, and therefore encumbers, rather than enhances, the process. Perhaps Lawson will expand their relationship with Manhattan Associates, who is starting to work on adopting this RFID technology in their supply chain software.
Incidentally, I’ve often thought that accounting/ERP systems, including Lawson, miss the mark on how to model transaction processing. If you’ve ever studied the "design patterns" genre of software engineering, you’ve encountered the concept of "state transitions". Most of the transaction processing systems I’ve worked with have always treated a transaction as being in a certain state.
This idea could be greatly enhanced by tracking not only the current state of a transaction, but also its previous states. In other words, where it has been along the way in the transaction process?
To put this in practical terms, consider how this applies to an inventory item. How did it get to us, and where/how has it been moved back and forth? Where is it about to go? How much has it cost to make a transition? How much revenue was generated?
Marrying the concept of state-transitions with RFID and you’ve got a very potent combination of tracking information that greatly enhances the ERP/supply chain environment.