EPC technology is primarily the use of Radio Frequency Identification (RFID) technology combined with information and communication technology (mainly the Internet). Solutions based on EPC technology are used in most supply chains across various industries.
Directions for EPC technology development
In the years 2003-2005, pilot implementations primarily covered the FMCG industry and, to some extent, healthcare. In addition to these industries, in the coming years, EPCglobal will support and develop implementations in: the automotive sector, the aerospace industry, and the clothing industry. Other industries where there is also significant implementation potential include:
– the military,
– the High Tech industry,
– the transport and logistics industry,
– the chemical industry.
The main benefits resulting from the use of EPC technology in the mentioned industries include:
– reducing losses caused by product counterfeiting,
– increasing productivity (by minimizing losses), increasing the speed and accuracy of reading goods flowing through the supply chain, and reducing inventory levels,
– increasing quality levels by transporting the right products, at the right time, in the right quantity, and to the right place,
– accelerating the inventory process, which in the future may be done by pressing a single button, thereby checking the contents of all “smart” shelves in a warehouse, store, etc.,
– reducing losses caused by theft (by customers, warehouse employees, etc.).
The WTO (World Trade Organization) estimates that 5% to 7% of global trade products are counterfeited. Consequently, companies lose approximately 512 billion USD annually (data from the last year). A solution based on EPC technology allows for a significant reduction in losses associated with this phenomenon. Recent results from EU Commission studies also show that between 1998 and 2004, there was a significant increase in counterfeit goods detected by customs services. This increase is as much as 1000% over 6 years. Product counterfeiting is also of key importance for the pharmaceutical industry. A report regarding 2005 estimates that the global pharmaceutical industry loses almost 39 billion USD annually, which accounts for 11% of the trade value in this sector.
Examples of pilot implementations
Solutions based on RFID technology using EPC standards have found application in various branches of the economy, not only civilian. One example is the use of EPC/RFID technology for the needs of the US military. The United States Department of Defense (DoD) adopted a standard ratified by EPCglobal in July 2005 regarding data recording on a tag. This means that each of the 60,000 suppliers to the United States military will supply goods marked with an EPC code starting from January 2007, and the tags will operate according to the Gen2 protocol. Some of them are already using this technology in shipments to Iraq. The positive results of using EPC technology have exceeded the wildest expectations, resulting in the expansion of the scope of application to include further products. Products covered by the application of EPC technology include, among others, spare parts, personal soldier equipment (helmets, boots, bulletproof vests, etc.), and ready-to-eat meals.
The main goals of using EPC technology in the US military are:
– reducing excessive inventory,
– shortening the time for delivery to the front,
– faster order fulfillment.
The article comes from the magazine “Logistyka”, No. 3/2006.