The Hindu : Business : RFID is key to supply chain management

Online edition of India's National Newspaper
Monday, Jun 06, 2005

Business

Business

RFID is key to supply chain management

The creation of e-enabled ports was a global necessity

John Clendenin

INDIAN ENTERPRISES must draw up plans to incorporate Radio Frequency Identification (RFID) technology to meet emerging global requirements, failing which they will find it difficult to do business in a trans-national framework in the coming years, Prof. John Clendenin, Chief Executive Officer of IC Logistics, U.S., said.

Many global companies had started using RFID tags in supply chain management to increase efficiency. (The tags are small and thin devices into which sensor-readable information is incorporated about a product or consignment and embedded into the object physically. They help in automated identification and tracking of goods at various levels).

Wal Mart, which sourced products globally, had announced a timetable for its top 200 suppliers to introduce the tags for cases and pallets by 2006, Prof. Clendenin, who is on the faculty of Harvard Business School, told industry representatives at a meeting organised recently by the Confederation of Indian Industry (CII) on integrated supply chain management using the Internet and RFID.

The choice before Indian suppliers was to move towards the new technologies now or accept a rigid system imposed by the foreign purchaser at a later date. Calling for greater appreciation of the Internet as a key component of international business infrastructure, the visiting logistics expert said policymakers in many countries understood infrastructure only in terms of airports, seaports and roads. "A secure infrastructure for data is as important as physical security. We must get the Internet on the agenda of global development," he added, urging that World Bank funds earmarked for trade infrastructure should be expanded to cover telecommunications, the Internet, data and document management for logistics.

The Internet was capable of bridging linguistic barriers that slowed trade, by enabling the hosting and transfer of documents in multiple languages. This was being established by IC logistics with its projects in Mexico and Bulgaria, where time taken to ship consignments across borders had come down after documents in local languages became available online.

Hamburg and Hong Kong ports were also installing e-enabling infrastructure that included use of RFID. Such intelligence would help the ports identify not merely the containers and ships that were moving through them but also their cargo and contents.

The creation of e-enabled ports was a global necessity today, particularly because of the altered security situation.

Cautioning the international trading community against waiting for a single RFID technology, Prof. Clendenin said the only key issue at present was interoperability of systems.

RFID tags were being used in sectors as diverse as textiles and automobiles, to identify contents of consignments and track them, maintain inventories to ensure that fast moving products were adequately stocked and to prevent theft — of a complete vehicle or its expensive parts.

G. ANANTHAKRISHNAN

in Chennai

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