Jack Link's Beef Jerky, a US-based, midmarket segment international snack manufacturer whose clients include Wal-Mart and other large retailers, was identified by Microsoft as the type of small-scale firm that should be benefiting from RFID.
The Jack Link's Beef Jerky project is being implemented in four phases, with the support and involvement of several Microsoft partners. Avery Dennison is providing smart labels and RFID compliance testing services, SATO America is providing RFID label printers that have encoding and tag verification capabilities and SAMSys Technologies is delivering readers and antennas.
"By applying RFID across our entire supply chain, we hope to not only increase visibility and accuracy to a level we never thought possible, but also to largely automate all associated business processes," said Karl Paepke, vice president of operations at Jack Link's Beef Jerky.
" We want to leapfrog the bar-code era and go straight to the finish line with RFID."
RFID technology is based on a relatively simple concept. It consists of two elements that communicate through radio transmission - a tag and a reader. The tag contains a small chip and an antenna and can be placed on any object. The information on the tag, such as an identification number, can be transmitted to an RFID reader over a distance of a few metres.
The technology is being driven hard by retailers such as Metro and Wal-Mart, which see RFID as the natural replacement of industry's current bar code-based tracking systems, allowing companies to automatically track inventory throughout an entire supply chain.
Wal-Mart is now but six months away from its deadline for the top 100 suppliers to put tags on all pallets and cases. In Europe, legislation enforcing manufacturing traceability comes into force in January 2005.
The first phase, which was completed in less than three weeks, involved tagging cases and pallets for select SKUs of beef jerky destined for the Wal-Mart distribution centre in North Texas. Even though Jack Link's Beef Jerky will not be impacted by trading partner mandates until at least 2006, the company decided to be proactive regarding RFID requirements.
"We know RFID is coming sooner or later, and we wanted to ensure we are ready to continue to better serve our customers," said Paepke.
The second phase will leverage RFID in connection with Microsoft Navision for manufacturing tracking. RFID tags will be attached to totes and racks in a closed-loop system and will replace the existing manual auditing process with automated recording of ingredient lot and finished products tracking.
"Given the large number of production steps and speed of operations, it would be uneconomical if not impossible to perform the required auditing steps using manual intervention," said Donavan Lane, president of ABC Computers.
The third phase of the project will extend the process to raw-material supplies, to record lot information as part of the receiving and picking processes. It will enable Jack Link's Beef Jerky to generate an automatic record of all raw materials going into a specific batch of product.
The fourth and final phase will leverage RFID in the distribution process to automate internal stock transfers from the company's manufacturing sites to its central distribution centre. By leveraging the increased visibility and inventory accuracy across its supply chain from end to end, Jack Link's Beef Jerky expects to shorten cycle times, improve delivery performance and increase inventory turns.
Nadella says although the current driver of RFID adoption is a business's desire to be compliant with trading partners, the example of Jack Link's Beef Jerky shows that innovative midmarket segment companies understand the technology as a potential source of competitive advantage.
"Furthermore, this project is evidence of our mandate to democratise RFID by bringing it to small and midsize companies," Nadella said.
Microsoft Business Solutions plans to include RFID technology as part of its ERP solutions, enabling small and midsize customers to fully leverage the technology while retaining a familiar, easy-to-manage IT environment.
Microsoft Business Solutions presented details of its Jack Link's Beef Jerky scheme at EPC Global 2004 in Baltimore, US. The conference ends tomorrow.
"We continue to strive to make complex things simple for our small- and midsize-business customers, building solutions that meet their unique requirements and enable small and midsize businesses to function more like large enterprise companies," said Satya Nadella, corporate vice president of Microsoft Business Solutions.
"This RFID project with Jack Link's Beef Jerky is an excellent example of this work in action."
EPCglobal Inc, a joint venture of EAN International and the Uniform Code Council, Inc. (UCC) is a not-for-profit organisation entrusted by industry to establish and support the EPCglobal Network as the global standard for real-time, automatic identification of information in the supply chain of any company, anywhere in the world.
The EPCglobal Network combines Radio Frequency Identification (RFID) technology, existing communications network infrastructure, and the Electronic Product Code (a number for uniquely identifying an item) to enable accurate, cost-efficient visibility of information in the supply chain.