This document discusses the impact and benefits of RFID technology on supply chain efficiency. It notes that major retailers like Walmart and the Department of Defense will require RFID tagging on shipments by 2005. RFID allows real-time tracking of inventory from manufacturer to distribution center to store shelves. This reduces the "bullwhip effect" where demand is exaggerated at each supply chain level. RFID also enables vendor-managed inventory where manufacturers replenish retailer inventory based on real-time data. Overall, RFID provides more accurate inventory information and analysis to reduce out-of-stock items, labor, and overall inventory levels across the supply chain for benefits to both retailers and manufacturers.

1. RFID
Su Yan
yansu1101@gmail.com

2. contents
3. The impact of RFID on supply chain
1. Background
efficiency
RFID
2.What is RFID? 4.Conclusion

3. Background
Wal-Mart Stores, Inc.
The top 100 suppliers must tag pallets and cases
shipped to three Dallas-area distribution centers
by January 2005.

4. Department of Defense.
Pentagon suppliers must place RFID tags
on cases or pallets shipped to the DoD by
January 2005.

5. Food and Drug Administration.
The organization recommends that all
pharmaceutical producers, wholesalers, and
retailers begin developing plans to place RFID
tags on pallets, cases and unit items by 2007.

6. What is RFID?
Radio Frequency IDentification
•Tags
•Readers

7. tag reader

8. tag tag
tag tag
tag
Pallet with RFID tags

9. METRO FUTURE STORE

11. The impact of RFID
on supply chain efficiency
Bullwhip effect
VMI
( Vendor-Managed Inventory )

12. Vendor-Managed Inventory
store
Inventory
Vendor Levels
Replenishment
Retailer
Distribution center
Monthly or Weekly Cycle
Replenishment

13. Replenishment in a Consumer-Driven
Supply Network
Real-Time inventory and demand information
reported hourly or daily
Daily and Event-Driven
Replenishment
Shelf
Store
consumer
Manufacturer Shelf
consumer
Retailer
Distribution Shelf
Center
Replenishment
consumer
Inventory Inventory
Inventory
Information Information
Information
RFID based Real-Time Inventory and Demand Data

14. More accurate information
• Received at distribution center
• Departed distribution center
• Received at store
• Departed store stock room (arrived at shelf)
• Case (tag) destroyed

15. immediate benefits
• Better control over overage, shortage, and damage
claims management and the ability to better assign
responsibility to the supplier, the carrier, or Wal-Mart
• Better control over product recall
• Data that improves processes through collaboration
between Wal-Mart (retailers) and its suppliers

16. For the first time, quantification of lost sales.

17. In the long term, retailers and manufacturers
can benefit from the RFID
Retailer benefits
• Reduction in out-of-stock items
• Store and warehouse labor reduction
• Reduced inventory
Manufacturer benefits
• Inventory visibility
• Labor efficiency
• Improved fulfillment
• Improved customer service levels

18. The closed-loop supply chain process
Supply Chain Planning
planning moniter
4. Act
1. Plan 3. Check
2. Do
Execution Systems
Event Management
RFID

19. However
• Replenishment from many resources
The ideal supply chain & pull process chain
The closed-loop supply chain supply
• significant economics of scale in manufacturing
and transportation

20. Conclusion
• Allow real-time tracking of products, or at least
cases and pallets
• Largely reduce lost sales
• Consumer-Driven Supply Network

21. Reference:
CLAUS HEUNRICH, RFID and beyond-growing
your business through real world awareness,
WILEY

22. Q&A
yansu1101@gmail.com