Editor's Note: I am pleased to provide another guest post by popular guest blogger, Chris Kapsambelis. The author notes that there are national retail chains still doing manual tracking of their supply chains.

By Chris Kapsambelis

My wife's newly ordered treadmill showed up two weeks early. While my wife was jumping for joy, I wanted to know why the supply chain responsible for tracking this item from manufacture to the point of sale failed. A prominent, national, department store chain should be able to determine with more precision the stock status of a $500.00 item in its inventory.

When we went to buy the treadmill the store associate told us that the store was out of stock, and the computer system projected the earliest delivery would be in three weeks. A check with other stores of the same chain in the region produced the same results. We placed the order and resigned ourselves to the 3 week wait. The treadmill arrived four days later.

Being aware that recent studies of RFID at Metro, and Wal-Mart show an expected 11% and 16% reduction in out-of-stocks (OOS), a problem for many retailers, I immediately began to examine the box for signs of an RFID tag. I did not find one. What was more surprising was that the shipping label from the manufacturer did not have a Serial Shipping Container Code (SSCC) either.

For over 20 years now, trading partners in the supply chain have been using Electronic Data Interchange (EDI) for computer to computer document transfer such as Purchase Orders, Invoices, etc. A key document in this process is the Advance Shipment Notice (ASN). The ASN, among other things, lists SSCCs for each shipment on a given order and is used to schedule Receiving and Put-Away tasks at major distribution centers. The SSCC is included as a barcode on the label of each container on a given shipment. This is the primary Automatic Identifier at the case level in distribution centers and retail store back rooms, and it is customarily scanned to track the item.

The Electronic Product Code (EPC), associated with RFID, is capable of accepting the 18 digit unique number that is used to identify the manufacturer, the product, and a serial number associated with the SSCC. The three elements serve to uniquely identify the shipping container in the supply chain. For shipping cases that use RFID, the SSCC is now defined as a subset of the EPC and is used to backup RFID in case of failure. EDI and the more efficient EPC Information Services (EPCIS) are expected to be the backbone of the new RFID powered supply chain. Trading Partners are expected to use these services to automatically exchange tracking data of items in the supply chain.

Barcode, in the retail trade, has been in use for more than 30 years. EDI is at least 20 years old. It is obvious that the retail chain where we bought the treadmill is still using manual methods to track inventory (look at the size of the Item Number).

The fact that there are major national retail chains that are not making full use of currently available technology may be a significant indication that RFID is a very long way from full implementation. Furthermore, the improvements, cited at Metro and Wal-Mart, may be due more to the process changes required for using RFID than by the technology alone.



About the Author: Chris Kapsambelis was a founder of Computer Identics Corporation, where he participated in the early use of barcodes for logistics applications. Later he founded Barcode Data Systems that provides consulting, and software development for auto-ID applications. He was elected a Charter Member of the AIDC100 which is made up of the top 100 recognized authorities on Auto ID and Data Capture. He received training in radio systems while serving with the U.S. Air Force, and later graduated from Northeastern University, Boston, MA with a Bachelor of Science Degree in Electrical Engineering. He has been granted numerous U.S patents related to the development of bar codes and bar code readers.