In 2004, SAP introduced the first packaged solution for Radio Frequency Identification (RFID) for supply chain management processes, which can be used in warehouses or distribution centers, among other places. As one of the leaders in the development of RFID technology, SAP provides a first-of-its-kind, built-from-scratch solution that will facilitate companies’ management of data reading and writing on RFID carriers, i.e., tags.
Leveraging experience gained during projects carried out in cooperation with companies such as Procter & Gamble and METRO Group, as well as through years of research into RFID technologies and commitment to creating radio identification standards, SAP has designed a technology that will change the face of supply chain management in retail and the consumer goods industry. Companies can now process data obtained via RFID carriers in specific business processes and integrate the functionality of ERP and SCM systems with applications based on RFID technology. Examples include packing and unpacking, warehousing, shipping, receiving, and tracking and control throughout the entire supply chain.
The RFID solution is based on Java technology and combines into one package such SAP solutions as: Auto-ID Infrastructure, SAP Event Management (SAP EM), which is a component of mySAP Supply Chain Management (mySAP SCM), and SAP Enterprise Portal (SAP EP), which is a component of SAP NetWeaver, an integration and application platform.
The SAP RFID solution is based on the SAP Web Application Server (SAP Web AS), which is part of the SAP NetWeaver technology platform, ensuring seamless integration with both SAP and other IT environments. This new packaged solution was designed to manage and transmit data obtained from radio identification systems and to adapt to the use of a business knowledge repository in order to automate business processes that use RFID technology. Integration of the SAP RFID solution with an existing IT environment can be done using AutoID connectors for SAP R/3. This applies to version 4.6C or higher and mySAP ERP. SAP and its technology and consulting partners provide assistance in creating RFID solutions tailored strictly to the requirements of a specific client. These solutions facilitate the creation of a business case, integration of RFID hardware infrastructure, development of business concepts for the solution, and implementation projects. The automatic identification concept created by SAP enables the management of automatic identification (AutoID) systems, which include radio identification systems, barcodes, and sensors.
This is a robust enterprise infrastructure for RFID technology that enables the practical use of RFID data in more processes and applications than other individual solutions available on the market. When a company implements programs related to RFID technology aimed at improving business processes, it becomes necessary to organize a comprehensive RFID infrastructure that will support the entire company.
SAP has been conducting research in the field of RFID since 1998 and during this time has undoubtedly dictated the pace of development of radio identification (RFID) technology. It also supported the formulation of industry standards in accordance with the guidelines presented by EPC Global. SAP was the first sponsor from the enterprise software industry to support the Auto ID Center organization, the predecessor of EPC Global, which led the development of standards for Electronic Product Codes (EPC) using RFID technology.
Since March 2003, as part of the RFID Customer Council, SAP has worked closely with over 20 companies from the consumer goods, pharmaceutical, and retail industries. The Council facilitated SAP’s definition and development of the packaged RFID solution, the identification of key end-users and their business requirements and priorities, as well as an understanding of business processes using the new generation technology that is RFID. All this has significantly contributed to the return on investment made in radio identification (RFID) technology.
RFID enables the implementation of business processes
The best example of the practical use of RFID radio identification technology by SAP is the METRO Group’s program called the Future Store Initiative, whose main sponsor was SAP. Together with the METRO Group, Intel, and over 40 technology partners, SAP began implementing state-of-the-art technology for retailers participating in the METRO Group’s Future Store project, which was inaugurated on April 28, 2003, in the German city of Rheinberg. Nearly two thousand products sold as part of the Future Store project had RFID carriers, which play a key role in tracking and controlling items. The radio identification systems used in the project make the supply chain more efficient and flexible. All supply chain processes begin at the distribution center located in Essen and end at a specific store. Individual goods, as well as crates and pallets, were marked with tags.
The Wall Street Journal Europe awarded SAP one of its annual European Innovation Awards. SAP received this award for the role it played in creating the Future Store Initiative project for the METRO Group. In this project, SAP was responsible for the software architecture and the interface between data acquisition systems and external systems, thanks to the use of Auto-ID Infrastructure. Data tracking and control is possible thanks to the consistent integration of RFID data with the SAP Event Management application. Employees of the METRO Group responsible for the Future Store project have access to data through the SAP Enterprise Portal platform. At the same time, they can analyze data using the SAP Business Information Warehouse (SAP BW) solution.
SAP, together with Procter & Gamble, is also implementing another project using RFID radio identification technology. Both SAP and P&G appreciate the enormous importance of RFID technology and its significance for supply chain integration processes. Due to common goals and belief in the importance of the venture, which is the development of RFID technology, SAP, along with P&G, is participating in a pilot project based on SAP solutions, gaining knowledge about how RFID technology can improve supply chain integration and what is needed to ensure its success on the market.
The packaged solution for radio identification developed by SAP connects the virtual world of data with the real, everyday world of goods identified using state-of-the-art RFID technology. By continuously providing accurate, real-time, and up-to-date data and information, this solution enables companies to close the loop involving data acquisition, its conversion into specific information, and the automation of all integrated transactions and processes. Such a solution will help companies create even smarter and more adaptable business processes that will realize the vision of next-generation logistics networks.