Enabling Intelligent B-to-B eCommerce Supply Chain

Management Using RFID and the EPC Network: A Case

Study in the Retail Industry
Samuel Fosso Wamba

Louis A. Lefebvre

Elisabeth Lefebvre

ePoly research center, Mathematics

and Industrial Engineering
Department
cole Polytechnique de Montral
P.O. Box 6079, Downtown Station
Montral (Qubec) Canada
H3C 3A7
1-514-340-4711 Ext. 5865

ePoly research center, Mathematics

and Industrial Engineering
Department
cole Polytechnique de Montral
P.O. Box 6079, Downtown Station
Montral (Qubec) Canada
H3C 3A7
1-514-340-4711 Ext. 5862

ePoly research center, Mathematics

and Industrial Engineering
Department
cole Polytechnique de Montral
P.O. Box 6079, Downtown Station
Montral (Qubec) Canada
H3C 3A7
1-514-340-4711 Ext. 5861

[email protected]

[email protected]

[email protected]

ABSTRACT

Keywords

This article provides some insights into RFID technology and the
EPC Network and investigates their potential for B-to-B
eCommerce supply chain management. Based on empirical data
gathered from four tightly interrelated firms from three layers of a
supply chain, several scenarios integrating RFID and the EPC
Network have been tested and evaluated. In the context of
warehousing activities in one specific retail supply chain, the
results indicate that i) the business process approach seems quite
appropriate to capture the real potential of RFID and the EPC
Network; ii) RFID technology and the EPC Network can improve
the shipping and the receiving processes; iii) they can
automatically trigger some business processes; iv) they foster a
higher level of information sharing between supply chain
members; and v) they promote the emergence of new business
processes such as process-to-process, process-to-machine,
and machine-to-machine. The paper helps to improve our
understanding of the real potential of RFID and the EPC Network
for business processes.

RFID, EPC Network, retail industry, warehouse management,

supply chain management, intelligent processes, intelligent
products.

1. INTRODUCTION
The main objective of this paper is to investigate the potential of
the RFID (radio frequency identification) technology and the EPC
(electronic product code) as enablers of intelligent B-to-B
eCommerce supply chain management. More specifically, the aim
is to improve our understanding of how RFID technology and the
EPC Network can be integrated into a specific supply chain.
After first introducing the RFID technology and the EPC
Network, the paper exposes the background of the study (section
2), elaborates the methodology (section 3). Findings and their
implications are discussed in section 4.

1.1 RFID technology

RFID technology has been considered as one of the most
pervasive computing technologies in history [21, p. 56]. But
RFID concept is not new; it has its origins in military applications
during World War II, when the British Air Force used RFID
technology to distinguish allied aircraft from enemy aircraft with
radar [2].

Categories and Subject Descriptors

K.4.3 [Computers Society]: Organizational Impacts
Automation,
employment,
reengineering.
H.3.5
[INFORMATION STORAGE AND RETRIEVAL] Online
Information Services Data sharing, Web-based services.

However, RFID technology has received a great deal of attention

over the last few years, with a boom in early 2003 due to
demands by Wal-Mart and the US Department of Defense (U.S.
DOD) that major suppliers should adopt and implement the
technology by the beginning of 2005[25].

General Terms
Management, Standardization.

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ICEC06, August 1416, 2006, Fredericton, Canada.
Copyright 2006 ACM 1-59593-392-1.

This interest in RFID is highlighted by many recent white papers

published by technology providers (e.g. Intermec, Texas
Instruments), consulting firms (e.g. BearingPoint; Accenture),
infrastructure providers (e.g. HP; Sun Microsystems), enterprise
software providers (e.g. SAP), and solution providers (e.g. IBM).
In the academic community as well, this emerging phenomena is
reflected in various fields of research such as innovation

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management [22], project management [3], environmental

management [12], e-commerce [23], supply chain management
and warehousing [25], [18], information systems [11], and
decision support systems [20]. But, all too frequently, technology
promises more substantial benefits than it can deliver, and
information technologies are no exception [5]. Are RFID
technology and the EPC Network another case of techno hype?
Could RFID and the EPC Network be enablers of intelligent B-toB eCommerce supply chain management? This paper seeks to
find some tentative answers to these questions with empirical
evidence gathered from a field study of one supply chain in the
retail industry where the most significant interest for RFID has
arisen.

This EPC Network is a method for using RFID technology in the

global supply chain by using inexpensive RFID tags and readers
to pass EPC numbers, and then leveraging the Internet to access
large amounts of associated information that can be shared among
authorized users [8, p. 6]. Moreover, products with an EPC tag
have the ability to communicate with their environment and make
or trigger basic decisions relevant to their management. Such
products are also called intelligent products or smart products
[26].
In the retail context, supply chain management (SCM) is seen as
an important activity where RFID technology and the EPC
Network could have tremendous impacts. The main thrust of this
paper is therefore that RFID technology and the EPC Network are
enablers of intelligent B-to-B eCommerce SCM.

RFID technology is classified as a wireless automatic

identification and data capture (AIDC) technology [29].
Basically, a RFID system is composed of three layers: (i) a tag
containing a chip, which is attached to or embedded in a physical
object to be identified; (ii) a reader and its antennas that allow
tags to be interrogated and to respond without making contact (in
contrast to bar codes, which require a line of sight and must be
read one at a time); and (iii) a computer equipped with a
middleware application that manages the RFID equipment, filters
data and interacts with enterprise applications [2].

2. BACKGROUND
2.1 Current context of the retail industry

RFID tags come in a large variety of designs and have many

different functional characteristics such as power source, carrier
frequency, read range, data storage capacity, memory type, size,
operational life, and cost. They may (i) either be read only or
read/write capable and (ii) be active, passive or semi-passive
depending on the way in which they drive operating power and
transmit data to the reader. Active tags have a tiny embedded
battery from which they draw power, allowing greater
communication range, higher data transmission rates and larger
data storage capacity than passive tags. Because they do not
contain a power source, passive tags are less expensive than
active tags [2]. However, the choice of the appropriate tags
depends on the objectives of each business application.

In addition, this industry is facing similar trends to those affecting

other sectors, for instance, the globalization of markets,
aggressive competition, increasing cost pressures and the rise of
customized demand with high product variants.

All The retail industry represents one of the largest industries

worldwide. For example, in the United States, it is the secondlargest industry in terms of both the number of establishments and
the number of employees, with $3.8 trillion in sales annually and
11.7 percent of U.S. employment [31].

Nonetheless, the industry also faces specific challenges such as

management of the short shelf-life of grocery goods, strict
traceability requirements and the need for temperature control in
the retail supply chain [15]. Retailers must also deal with a
growing number of stock keeping units (SKUs). For instance, in a
typical food store in the USA, the number of SKUs has risen from
nearly 6,000 in the 1960s to almost 40,000 today. As a result, the
number of daily sales transactions has exploded. Therefore,
capturing sales information using manual, and therefore errorprone, methods has become almost obsolete [1].

RFID readers may consist of a read or read/write module [20];

when requested, they can send the pre-configured location and the
identification of an object to a computer, which can initiate
business processes automatically [16].

Furthermore, manual capture of sales information increases

transaction costs and can cause inventory inaccuracies [9].
Among the cases presented in the literature, the case of Procter &
Gamble, which spends between $35 and $75 to process each
customer invoice is a classic representation of these inefficiencies.
Indeed, this kind of processing involves numerous human
interventions at different levels such as order taking, data entry,
processing of the order, invoicing and forwarding [14].

1.2 The EPC Network

The EPC Network is a standard for RFID infrastructure [10], [25],
[8]. It is composed of five components: (i) the EPC code, which
starts as a 64-bit to 128-bit identifier. Once it is incorporated into
an RFID chip (also called an EPC tag) and attached to a physical
object, product or item, it can provide information such as the
manufacturer, the product category and size, the date when the
product was made, the expiration date, the final destination, etc.
(ii) The RFID reader identifies any EPC tag within its
interrogating field, reads the EPC tag and forwards information to
the SAVANT. (iii) The SAVANT is the middleware system
located between readers and the application systems (AS). Based
on configured business rules, it is responsible for data filtering
and aggregation and interacts with the EPC Information Service
(EPC-IS) and the local Object Name Service (ONS). (iv) The
EPC-IS is the gateway between any requester of information and
the firms AS and internal databases. (v) The local ONS is an
authoritative directory of information sources available in order to
describe all EPC tags used in a supply chain [10], [8].

With the intention of streamlining their supply chain processes

and controlling costs, leading retailers around the world are
relying more on the use of information technologies (e.g.
Enterprise Resource Planning (ERP), Warehouse Management
System (WMS), Transportation Management System (TMS) and
Automatic Identification and Data Collection (AIDC)) to support
intra- and inter organizational business processes, decisionmaking, workflow management and automatic information
exchange with their supply chain partners. They also depend on
new customer-focused concepts to improve performance (e.g.
Vendor-Managed Inventory (VMI), Point of Sale (POS) and
Collaborative Planning, Forecasting and Replenishment (CPFR))
[24]. But the majority of the retailers place their hopes on

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emerging technologies such as RFID technology and the EPC

Network to improve their supply chain management.

Within distribution warehouses, many impacts and benefits are

also expected from RFID and the EPC Network. A distribution
warehouse, also called a distribution center, collects products
from different suppliers and sometimes assembles them for
delivery to a number of customer warehouses [30]. Four separate
processes are usually identified in a distribution warehouse,
namely receiving, put-away, picking and shipping [30]; all of
which can benefit from RFID technology and the EPC Network
(Table 1).

2.2 RFID and the EPC Networks potential in

the retail industry
The most significant interest in RFID and the EPC Network is in
the retail industry. This so-called intelligent network has the
ability to automatically link EPC code to product information
stored in a database on the Internet or on a companys local area
network (LAN) [32]. Indeed, major retailers such as Wal-Mart,
Tesco, Metro AG and 7-Eleven are very interested in the potential
of RFID technology [13] and the EPC Network [25], [8]. For
instance, by adopting RFID technology, Wal-Mart stands to
achieve annual savings of almost (i) $600 million in out-of-stock
supply chain cost reductions; (ii) $300 million in improved
tracking through warehousing and distribution centers; and (iii)
$180 million in reduced inventory holding and carrying costs [2].
Procter & Gamble has also estimated that it could save almost
$400 million annually in inventory by deploying an RFID system
[25], [23].

This paper focuses on a single open-loop supply chain initiative

in the retail industry to explore issues related to the integration of
RFID technology and the EPC Network between different
partners.

3. METHODOLOGY
Our study builds on previous work [26], [27] and focuses on a
three-layer supply chain. The case study method seems
appropriate to explore the complex issues related to the impacts of
RFID technology and the EPC network.

Table 1. Broad processes in a distribution center and areas of opportunities provided by RFID and the EPC Network.
Broad
processes
Receiving
Put-away

Picking

Shipping

Description

Specific opportunities

Common opportunities

Handling of products that

arrive at the warehouse

- Automate the verification activities [18], [32]

Moving and placing

products in their specific
storage location

- Lower costs of process by 20-30% [4]

Retrieving the products

from their storage
location to consolidate
customer
Checking, packing and
loading in the
transportation unit

- Lower cost of process by 30-50% [4]

- Manage the flow of damaged goods [17]

- Improve temporary storage [18]
- Reduce manual intervention [18]

- Automate the verification activities [18], [32]

- Simplify processes [18],

[17]
- Speed up processes [17]

-Reduce errors

2.3 Real applications of RFID and EPC

Network in the retail industry

3.1 Research design

Since the main objective of this case study is to improve our
understanding of the potential of RFID technology and the EPC
Network in the context of warehousing activities in one specific
supply chain, the research design corresponds to an exploratory
research initiative. Field research was conducted in 12
consecutive steps (Table 2, adapted from Lefebvre et al; 2005).

In 2003, Metro Group opened its first Extra Future Store, where
RFID technology is used live for various applications throughout
the supply chain [6].
In addition, the use of RFID technology and the EPC Network for
product tracking in the retail supply chain can lead to a
tremendous reduction in inventory levels and better collaboration
among supply chain players. For example, Scottish Courage, a
British beverage firm, is using RFID technology to track its 2
million keys at any point in the supply chain. As a result, the firm
has eliminated shrinkage, reduced key cycle times, and improved
delivery for outgoing and incoming stock [25]. Marks and
Spencer is also using RFID technology to track 3.5 million
reusable trays, dollies and cages throughout its refrigerated food
supply chain, leading to a substantial reduction (almost 80%) in
the time taken to read a stack of multiple trays while increasing
data accuracy and reliability. The overall result was a faster and
more cost-effective SCM system [13].

Table 2. Steps undertaken in the field study.

Detailed activities
Phase 1: Opportunity Seeking
Step Determination of the primary motivation to adopt
1
RFID and the EPC Network: Understanding the primary
motivation to consider the use of RFID and the EPC
Network technologies (WHY?)
Step Analysis of the Product Value Chain (PVC):
Understanding the activities specific to a given product
2
(WHAT?)
Step Identification of the critical activities in the PVC:
3
Identification of critical PVC activities (WHICH activities
to select and WHY?)

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the network? Which application should be adopted? In parallel,

other questions address the technological concerns: How will the
existing IT infrastructure be impacted? What are the
characteristics of the product to be tagged? How much
information is required? Which application is to be used (i.e.
read/write, distance, speed, security, etc.)? The answers to these
questions allow one to map redesigned business processes
integrating RFID technology and the EPC Network (step 9).
Finally, in step 10, business and technological processes
integrating RFID technology are validated with key respondents.

Step Mapping of the network of firms supporting the PVC;

Mapping the Supply Chain Network to understand the
4
links within the network of firms supporting the product
(WHO and WITH WHOM?)
Step Mapping of intra-organizational processes for the
5
identified opportunities as they are carried out now (As
is) (HOW within organization?)
Step Mapping of inter-organizational processes for the
6
identified opportunities as they are carried out now (As
is) (HOW between organizations?)
Phase 2: Scenario Building and Validation
Step Evaluation of RFID and the EPC Network
7
opportunities in the PVC with respect to the product
(level of granularity), to the firms involved in the network
and to the specific activities in the PVC
Step Evaluation of potential RFID-EPC Network
8
applications including scenario building and process
optimization (As could be) (HOW within and between
organizations?)
Step Mapping of intra- and inter-organizational processes
9
integrating RFID technology and the EPC Network
Step Validating business and technological processes
10 integrating RFID technology and the EPC Network
with key respondents Feasibility analysis and evaluation
of the challenges including ERP and middleware
integration and process automation
Phase 3: Scenario Demonstration and Analysis
Step Proof of concept (POC) in laboratory simulating RFID11 EPC Network physical environment and interface
between supply chain players: Feasibility demonstration
and evaluation including ERP and middleware integration
and process automation at all the supply chain members
level
Proof of concept post-analysis and decision to go for the
beta test replicating POC scenarios in a real-life setting
Step Pilot replicating POC scenarios in a real-life setting and
12 evaluation of anticipated vs. realized benefits and impacts
of RFID-EPC Network. Appropriation by the different
organizations involved and their staff members

The third and final phase of the research design is used for the
demonstration and analysis of scenarios retained in the second
phase, both in controlled conditions (proof of concept step 11)
and in a real-life setting (step 12).

3.2 Research sites

Four firms participated in this field study, namely a focal firm we
call Firm X, two first-tier suppliers and one retailer.

3.2.1 Firm Xs profile

Firm X is one of the largest North-American-owned beverage
companies, with almost 6,000 staff members and annual revenues
of approximately $2.8 billion. The firm owns many large
distribution centers. An overall volume of 15 million cases transit
through the firm every year. Of these, 2.7 million cases pass
through the docks of the distribution center where the field study
was performed. Firm X relies on bar code systems to track the
cases. In addition to bar code systems, the firm uses various
business applications (e.g. ERP, WMS, TMS, B2B Web portal).
The TMS is linked to a GPS (Global Positioning System). Firm X
also has a LAN to optimize its intrabusiness processes and
communications. The firm also uses an EDI server to
communicate with some suppliers and retailers.

3.2.2 The two first-tier suppliers profiles

These two first-tier suppliers are bottling plants that deliver their
production to Firm X each day. They use a paper system, e-mail
and fax to exchange business documents with Firm X. In both
cases, employees in Firm X have to re-enter delivery documents
sent by these suppliers into their business applications during the
receiving process. This increases document processing errors and
results in inaccurate data. These two first-tier suppliers use bar
codes provided by Firm X to identify pallets, and do not have any
means of tracking their products once they leave their facilities.

The first six steps correspond to an initial phase that could be

broadly termed the opportunity-seeking phase. Step 1
represents the starting point, with a thorough assessment of the
corporate motivations underlying the adoption of RFID
technology and the EPC Network. Steps 2 and 3 allow a sharper
focus on specific critical activities that will be targeted in the
implementation of this technology. Steps 4, 5 and 6 reflect the
current situation in terms of supply chain dynamics and existing
intra- and interorganizational business processes.

3.2.3 The retailers profile

The retailer chosen for on-site observations is one of North
Americas biggest companies in its sector, with almost 30,000
employees and six distribution centers. In addition to e-mail, the
firm uses files, databases, LAN, ERP and WMS to support its
intra- and interorganizational business processes. One of the
biggest challenges facing the relationship between this retailing
firm and the focal Firm X is the recurrent discrepancy between
the quantities sent by Firm X and those received at the retailers
dock. The elimination of this inventory discrepancy was one of
the initial motivations of the focal Firm X and the retailing firm to
look into the potential of the RFID technology.

The second phase scenario building and validation evaluates

specific RFID and EPC Network opportunities (step 7) and
assesses the potential of RFID and EPC Network applications
(step 8). Step 8 represents a turning point where both business and
technological concerns are evaluated. For business concerns,
several questions need to be answered: How will firms in the
network handle their respective activities? What would change in
terms of activities, processes and organizational structure? Which
products and product levels should be targeted? What information
should be captured concerning the product and its accessibility on

In addition, the managers of all four firms involved in this field

study had already been approached by some consulting

284

companies and were aware of the other potential benefits to be

derived from the implementation of RFID Systems (and EPC
Network opportunities). Their initial motivations were focused on
the reduction of inventory and warehousing costs within the
supply chain. During the first focus group (which also included
academic researchers and private and technological partners) (step
1), they clarified their initial strategic intent with the need to
reduce lead times and to respond faster to changing market
demands. In other words, their primary motivations dealt with
issues related to a lean and agile supply chain.

SUPPLIERS

palletized for mix pallets (in Firm X), prior to being shipped to
different customers
The researchers acted as observers, interviewers and facilitators
(for focus groups). They also developed and presented the
detailed scenarios that were developed from the empirical
evidence gathered in the four research sites. Industrial reports and
internal documents such as process documentation, procedures,
ERP screens and a wide range of other technical or non-technical
documents were also used when available.

RETAILERS

FIRM X

3.3 Data collection

Internal
Databases

RECEIVING PROCESS
1. Receive Bill of Lading
1.1. Create a BOL in the Enterprise Resource Planning (ERP) software
1.2. Enter data from paper BOL in the ERP
1.3. Verify quantity by looking up the Purchase Order (PO)
1.4. Generate a report
1.5. Initiate unloading
2. Receive Physical Resource
2.1. Drive through portal
2.2. Place forklift into the truck
2.3. Pick pallet from the truck
2.4. Backup forklift into warehouse
2.5. Scan pallet
2.6. Visually confirm the quantity in the pallet
2.7. Scan License-Plate to give it life
2.8. Move loaded forklift to the dedicated staging area
2.9. Drop pallet into staging area
2.10. Manually generate a queue of movement in the Warehouse
Management System (WMS) software
2.11. Dispatch task manually in the WMS
2.12. Transmit put-away task manually from the WMS to dedicated forklift
via Radio Frequency (RF) through a Local Area Network (LAN)

Receiving

SHIPPING PROCESS
1. Validate Shipping Order
1.1. Bottle the products
1.2. Put in cases
1.3. Put in pallets
1.4. Link each pallet to a shipping destination using a bar code
1.5. Pack each pallet
1.6. Pick pallet from the packaging area using a forklift
1.7. Move loaded forklift to the shipping area
1.8. Consult the production plan
1.9. Load the pallets into the trailer
1.10. Fill out the Bill of Lading (BOL)
1.11. Transfer the trailer to the shipping destination
1.12. Hand in the BOL at the shipping destination

Enterprise
Applications

Shipping
Picking

Internal
Databases

Put -away

Receiving

Shipping

Enterprise
Applications

Enterprise
Applications
Internal
Databases

RECEIVING PROCESS
Similar to those of Firm X

Figure 1. Actual Inter-and Intra Processes.

Data collection for the case study was based on:

4. RESULTS AND DISCUSSION

(i) Focus groups conducted in the university-based research

center with nine functional managers and IT experts. The focus
groups allowed to reach a consensus on strategic intent with
respect to the use of RFID and the EPC Network in one product
value chain (steps 1, 2 and 3) and, to evaluate different scenarios
and select the preferred or as could be scenario (steps 7, 8 and
9). Each step of the methodology was evaluated and agreed upon
with members of the focus groups.

In this paper, we will present and discuss only the empirical

results obtained from steps 5, 6 and 9 of the methodology using
the suppliers shipping process and Firm Xs receiving
process. These three steps build on the results obtained in the
previous ones and represent the validated output of phases 1 and 2
of the field study, namely opportunity seeking and scenario
building.
All three steps also correspond to the mapping of current business
processes (actual situation) (steps 5, 6) and redesigned processes
integrating RFID technology and the EPC Network (steps 8, 9).
The process view retained here provides (i) a more dynamic
description of how an organization acts [19, p. 2], and (ii) a
structured approach and a strong emphasis on how the work is
done [7, p. 5], which enables field participants to validate the
research outputs. The process view is also increasingly used to
evaluate the impact of information technology [28].

(ii) On-site observations in the four research sites where

performed in order to carry out the process mapping required for
steps 5, 6 and 9. While some steps required more interactions (e.g.
step 6 where the research center explained to partners its approach
and methodology in order to identify RFID and EPC Network
opportunities), others (e.g. step 7) where mostly partner
preferences. For example, the Director of the Logistics and
Distribution division (Firm X) mentioned that tracking had to be
done at the pallet and box level in order to maintain visibility of
the boxes (from suppliers) while they are de-palletized and re-

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4.1 Actual business processes

4.2 Retained scenario integrating RFID and

the EPC Network

In Figure 1, processes are drilled down from the more general to

the more detailed.

The retained scenario (steps 8, 9), integrating the RFID

technology and the EPC Network was thoroughly validated with
the focus group. Based on this proposed scenario and the actual
situation, a comparison was made and the following observations
allowed us to analyze the impact and understand the resulting
opportunities (Figure 2).

Based on the analysis of the actual inter- and intra-organizational

processes in that figure, the following observations are made: (a)
the overall shipping and receiving processes consist
respectively of 12 and 17 second-level processes. (b) Most
existing processes involve numerous interventions by the
employees such as data input (e.g. 1.2. in the receiving
process), pallet scans (e.g. 2.5. in the receiving process) or
visual count of boxes in each pallet (e.g. 2.6. in the receiving
process).

4.2.1 General observations

(c) In addition, processes involved in shipping and receiving

seem to fall into four categories, namely, (i) interaction of a
machine with a product, or machine-to-product (e.g. 1.1. in the
shipping process); interaction of a human with a product, or
human-to-product (e.g. 1.4. in the shipping process); (iii)
interaction of a human with a product via a machine, also called
human-to-machine (e.g. 1.7. in the shipping process); and (iv)
interaction of a human with another human, or human-to-human
process (e.g. 1.12. in the shipping process).

a)

RFID systems offer a standardized SKU which can be shared

by all actors of the EPC Network.

b)

Each actor of the supply chain can, at any time, anywhere,

access product information from the remote ONS via the
local ONS.

c)

New categories of business processes are emerging.

Root ONS
Internet

Local ONS

Local ONS
Enterprise
Applications

SUPPLIERS

EPC-IS

Internal
Databases

Enterprise
Applications
RETAILERS

SAVANT
Reader
EPC Tag

RECEIVING PROCESS
1. Receive Bill of Lading
1.1. Drive the trailer through a portal equipped with an RFID reader
1.1.1. Automatic scan of the trailer ID by RFID reader
1.1.1.1. Automatically upload a copy of the BOL to the l-ONS
from r-ONS via Internet
1.1.1.2. Automatically link the BOL to the PO in the ERP via the
SAVANT and the EPC-IS
1.1.1.3. Automatically create inventory in the WMS
1.1.1.4. Automatically send an alert to the dedicated worker in
receiving on his cell phone or PDA to reserve a forklift
1.1.1.5. Automatically initiate the unloading
2. Receive Physical Resource
2.1. Drive forklift through portal equipped with an RFID reader
2.2. Place forklift into the truck
2.3. Pick pallet from the truck
2.4. Back up forklift into warehouse
2.5. Automatic scan of t-cases and t-pallets by RFID reader
2.5.1. Automatically update information in the WMS, the EPC-IS,
the l-ONS via the SAVANT
2.5.2. Automatically initiate the put-away process

Receiving

Picking

Shipping

SHIPPING PROCESS
1. Validate Shipping Order
1.1. Bottle the products
1.2. Put in cases containing an embedded smart tag (t-cases)
1.3. Put in pallets containing an embedded smart tag (t-pallets)
1.4. Pack each pallet
1.5. Pick pallet from the packaging area using a forklift
1.6. Drive through a portal equipped with RFID reader
1.6.1. Automatic scan of t-cases and t-pallets by RFID reader
1.6.1.1. SAVANT automatically checks the shipping destination
1.6.1.2. Send an alert automatically if its the wrong shipping destination or
else automatically link each pallet to the shipping destination
1.6.1.3. Automatically transmit product and shipping information to a PDA on
the dedicated trailer, to the Local ONS (l-ONS), the Enterprise
Applications (EA), the Internal Databases (IDB) and the remote ONS (rONS) via the SAVANT and the EPC-IS
1.7. Load the pallet into the trailer
1.8. Drive the trailer through a portal equipped with an RFID reader
1.8.1. Automatic scan of the trailer ID by RFID reader
1.8.1.1. Automatically send an Advanced Shipping Notice (ASN)
1.8.1.2. Automatically update information and create a Bill of Lading (BOL)
on the PDA on the dedicated trailer
1.8.1.3 Automatically send a copy of the BOL to the l-ONS, the EA, the IDB
and the r-ONS via the SAVANT and the EPC-IS
1.8.1.4. Automatically initiate shipment tracking in the Global Positioning
System (GPS)
1.9. Transfer the trailer to the shipping destination

Put -away

EPC Tag

Receiving

Shipping

Reader

EPC-IS

FIRM X

Internal
Databases

SAVANT

Local ONS
Enterprise
Applications
EPC-IS

Reader
EPC Tag

RECEIVING PROCESS (RETAILERS)

Similar to those of Firm X

Figure 2. The impact of RFID and the EPC Network on the shipping and receiving processes.

286

Internal
Databases

SAVANT

Information flow

possibility to send an alert to a dedicated employee to reserve a

forklift during the receiving process (process-to-human)
(1.1.1.4.) or whenever urgent deliveries arrive.
Finally, RFID technology and the EPC Network enable electronic
integration of all firms involved in the supply chain. Indeed, any
actor in the supply chain can, at any time, anywhere, obtain
continuously updated product information from the remote ONS
via the local ONS. In fact, product flows are totally synchronized
with information flows. It is now possible to generate,
automatically and in real time, all the information necessary for eprocurement, e-billing, e-forecasting, e-replenishment, from the
local ONS and the EPS-IS and thereby enable intelligent
management of B-to-B eCommerce processes.

4.2.2 Specific observations

a) The number of observed processes in shipping for the
supplier changes from 12 second-level processes in the actual
process to 9 second-level, 2 third-level and 7 fourth-level
processes with RFID technology and the EPC Network For the
receiving process in Firm X, the number of observed processes
is also affected. Indeed, this number dropped from 17 secondlevel processes in the actual process to 6 second-level, 3 thirdlevel and 5 fourth-level processes with RFID technology and the
EPC.
b) All information-based processes (e.g. 1.1.1.1, 1.1.1.2,
1.1.1.3. in receiving) are now automatically performed. In fact,
the use of RFID technology and the EPC Network automates
verification procedures during receiving and provides accurate
information at a very high level of granularity (pallet, box); this
information can then be shared among the whole supply chain.
RFID and EPC can also eliminate almost all paper-based
documents generated in the traditional receiving process.

5. CONCLUSION
By presenting RFID technology and the EPC Network by
focusing on business processes, the paper departs from previous
work. Results highlighted many SCM opportunities specially in
terms of business process optimization, through reduction in
employee information manipulation, and thus, contributing to cost
savings. These may help retail companies to enhance product
availability, which is a major concern and still represents almost
US $31.3 billion in opportunities each year in terms of cost
reduction regarding inventory shrinkage (Srivastava, 2004).
Indeed, the EPC Network can provide the product EPC code at
any point in the supply chain, in real time, thus improving the
supply chains end-to-end visibility.

c) In the shipping process, we can observe the disappearance

of the human-to-human category (1.12.) and the appearance of
new intelligent processes, namely, processes that are triggered by
other processes (process-to-process) (e.g. 1.6.1.1., 1.6.1.2.,
1.8.1.1., 1.8.1.2.) and processes which can trigger a machine
action (process-to-machine) (e.g. 1.6.1.3, 1.8.1.3., 1.8.1.4.). In
process 1.6.1.2., the intelligent management of outbound
products makes it possible to avoid false shipments of products,
and thus increase customer satisfaction and lower labor costs in
the warehouse.
d) With regard to the receiving process in Firm X, the trigger
for the whole process is the arrival of the truck. As soon as the
truck passes the gate equipped with an RFID reader, it is read
(machine-to-machine process 1.1.1.) and the information
collected is distributed throughout the whole supply chain. At this
point, it is possible to check whether inbound products have been
ordered. If not, the dedicated employee at the receiving dock can
refuse to let the arrival truck in, and thus avoid unnecessary
unloading.
e) In addition, time-consuming activities such as data entry
(e.g. 1.2. in the receiving) and manual scanning (e.g. 2.5. and
2.7. in the receiving) are now automatically performed using
RFID readers, and thus avoid the possibility of human errors.
Consequently, improving the quality and integrity of information
in the supply chain.
f) Moreover, the use of RFID technology and the EPC Network
enhances the information exchanged by different actors of the
supply chain. Indeed, as soon as the truck leaves the shipping
dock at the suppliers facilities, the truck, pallets and cases
equipped with the EPCs are read by RFID readers, and an ASN is
automatically transmitted to the remote ONS of the EPC Network
via the local ONS and to Firm X. This increases visibility among
all supply chain partners, making it possible to have the right
product at the right time in the right place.
g) In addition, when the truck arrives at its destination, it is
automatically scanned by the reader and all information about
products is automatically downloaded from the remote ONS of
the EPC Network to Firm Xs local ONS and to the enterprise
information systems. All these processes occur without any
human intervention.
h) Furthermore, RFID technology and the EPC Network,
coupled with a messaging technology such as e-mail, offer the

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