SAP and Intel have agreed to collaborate in developing technology that could someday pave the way for plug-and-play RFID (radio frequency identification) in the manufacturing, logistics and retailing sectors. The companies announced the partnership at the Cebit trade show last week.
At SAP's spacious booth on the fair grounds in Hanover, Germany, IDG News Service spoke with Christoph Lessmollmann, director of supply chain management and RFID systems technology at SAP. Lessmollmann discussed the companies' aim to provide more intelligence in RFID hardware and establish interfaces that will facilitate the flow of data to other systems in the supply chain.
What is the situation on the RFID standards front?
If we look at the standards that have been issued to date by EPCglobal and ISO (International Standards Organisation), they are a bare minimum for companies to invest in this technology. EPCglobal, for instance, has issued multiple standards, mostly recently the Generation 2 standard. The specification addresses, among other things, the air interface between the reader and the tag and the information written to the tag. Other standards are in work.
But the situation in the RFID market today is that there are many different vendors offering many different devices. Consequently, if a company doesn't purchase all its RFID equipment from the same supplier, it will need to monitor different systems and upgrade firmware on different types of devices.
International manufacturers and retailers like Proctor & Gamble and Wal-Mart Stores would like to see global RFID standards. Can we expect one set of RFID standards that apply worldwide or competing global standards, as we have today in the mobile phone industry?
There is definitely an interest in establishing true global RFID standards to ensure interoperability of all devices. But we have regional differences, such as frequencies. The RFID frequency adopted in U.S., for instance, can't be used in Europe or Asia because it is already used in these regions for mobile phones. Europe also has other regulations, for instance on radiation control. So devices will need to be designed to accommodate these regional differences. China, by the way, is considering doing something of its own in the area of RFID.
What do you plan to achieve with Intel?
With Intel, we intend to start a commodisation process around RFID hardware and the use of RFID in the business processes. If you look at a RFID reader today, it contains many different individually made components. Intel intends to provide a chipset that will contain the integral part of the broadcasting and receiving unit and also the analog and frequency parts. The chipset, in turn, will have embedded intelligence to feed captured RFID data in a proper format to the various systems using this data.
And what is SAP's role in this partnership?
We are working together on an interface, a handshake process.
Can you explain this?
The aim is to have the RFID device, say a reader, equipped with the Intel chipset and embedded intelligence. The device will have its own network management capability; in other words, its own IP (Internet Protocol) address. So once you plug the reader into the network, it will be seen by other systems making use of it. The handshake process is then defined to say, "device, if you want to send me data, do so in the following XML (Extensible Markup Language) format or some other designated format."
What we intend to achieve together with Intel is to make RFID a no-brainer for people daily using the technology. We want everyone in warehouse, for instance, to be able to plug a device into network and be ready to go without having to hassle with the underlying technology.
What specific applications are you offering?
One key application that plays a big role in the whole RFID process is our SAP Event Management. The application tracks all the scans, or events, along the supply chain, from the manufacturer to the logistic center and right up the retailer. But the application does more than just track. If, for instance, a position goes out of the allotted time window, Event Management will automatically detect that situation and start action by sending messages to the planning systems of buyers and others.
What is another key application?
Auto-ID Infrastructure. This is a technology component that looks at the individual reads and brings this data into a business context. For instance, a manufacturer sends an advanced shipping notification to a retailer. Our Auto-ID Infrastructure application takes this advanced shipping notification and brings it to a level close to the reader.
Any other key applications that SAP is providing?
The exchange of RFID data between business partners is crucial. Often multiple partners are involved, and they're coming from all different directions. We have an application to facilitate this information exchange process; it's called Exchange Infrastructure and it's integrated into the SAP NetWeaver application and integration platform.
So RFID is an integral part of NetWeaver?
Yes, we have a standard integration of RFID into key processes, such as shipping and receiving and sending advanced notifications, in NetWeaver.
What is holding up the widespread deployment of RFID?
Wal-Mart, which is pushing the technology in a big way, has concluded that RFID devices and tags are still too expensive.
Let's assume prices will come down in the near future. What could companies achieve with RFID that they can't with existing bar code technology?
Real-time awareness. Supply chain managers have been dreaming for decades about tracking the flow of information in manufacturing and logistics in real time. With RFID, this is possible.
What's still missing in the RFID puzzle?
For the RFID tag to stay with a product from start to finish -- from a factory in China to a store in North Dakota. Bar codes never managed this. If you look at a stack of pallets at a Wal-Mart store, you'll see multiple labels stapled on top of each other. With RFID, we have an opportunity to introduce a technology that can work across companies and countries.