The role of EPC/RFID in packaging.
EPC stands for "electronic product code," a chip with a small amount of data on it. Eight or nine of them could fit in the "D" for Denver mint mark on a dime. EPC is an enhancement of the Universal Product Code (UPC)--the bar code. It uses a chip and radio frequency identification (RFID) to create an information structure that will help improve supply chain efficiency. EPC/RFID tags are now being placed on or in corrugated packages to track them on their journeys through the supply chain.
THE ROUNDTABLE SESSION INCLUDED:
George Miller, editor of Frontline Solutions and moderator of the panel presentation
Bud Babcock, manager of logistics packaging and product ID, Procter and Gamble
Liz Churchill, director of life sciences, Symbol Technologies Inc., formerly Matrics
Daniel Engels, research director for the Auto ID Labs of Massachusetts Institute of Technology
Ed Zogg, senior packaging engineer, Eastman Kodak Co.
James Hennings, president and CEO, director, Vantage Point Systems
Ron Moser, RFID strategic analyst, Wal-Mart
MILLER: What are the types of RFID enabled boxes being used now and what will be needed as Wal-Mart and other programs ramp up?
MOSER: On our rollout plan, by January 2005 RFID will probably be on corrugated packaging in about 5% of our stores, and we will involve our top 100 suppliers. By January 2006 we'll probably be at 20%. Besides Wal-Mart, Target is also looking at having product tagged. The DOD (Department of Defense) has the consumer products they buy being tagged, as are Albertson's and Best Buy. (Editor's Note: As of September 2005, Wal-Mart reported that it is in the process of expanding the number of RFID enabled stores to more than 500 by the end of the 3rd quarter 2005 and meeting with the next 200 suppliers, who will begin tagging product this fall in preparation for going live in January 2006.)
BABCOCK: For our pilot program, we've limited ourselves to just a few SKUs of Bounty paper towels and Pantene shampoo. We picked those two because they have very different physical properties--a dense, heavy liquid and a light, fluffy paper product. We're learning things about how well the tags on interior cases get read as a unit load goes through the door, and what are the interference issues that you get with a complex liquid solution.
MILLER: Beyond the current mandates, Ron, are there any other current needs for tagged boxes?
MOSER: Right now, we are primarily looking at using RFID on cases and pallets shipped into our distribution centers as well as products delivered directly to our stores. Some suppliers ship both ways. We'll be looking at all of the cases in this pilot level of tagging.
MILLER: What is driving the need for tagged packaging? Why don't we try Ed (Zogg) and Daniel (Engels) for that?
ZOGG: From our standpoint, a lot of our retailers and our key trading partners are driving us to look at our supply chain and how RFID/EPC tags can leverage that supply chain and reduce inventories. The driver is trying to make our trading partners successful.
ENGELS: The key trading partners, particularly those that participated in the research of the Auto ID Center, understand the benefits of actually using RFID. It is an enabling technology. It has greater performance characteristics than bar codes, such as "non line-of-sight" capabilities and capabilities to read through materials. This makes it better able to identify objects without human intervention. It's those capabilities which, if we can harness them and make them easy to use, will be very useful for object identification.
MILLER: How is the current need for tagged boxes being met now? We could ask Liz (Churchill) and Jim (Hennings).
HENNINGS: I don't think it is being met very well. We don't know of any converting plants that are currently doing embedded tags, even in a test environment. I think we're a long way away from knowing how to do it. There are a lot of factors in solving this problem. Certainly the line speeds of some of the converting equipment is a factor; you don't want to slow them down. The object of a box plant is to run as fast as possible. Then you have the issue of managing the information flow. Are you going to encode the tags or commission the tags on the boxes? There are a lot of issues to resolve.
CHURCHILL: We are working with quite a few of the end users who are supplying to Wal-Mart. A few of the end users have gone back to their carton manufacturers and said, "We would like you to incorporate the EPC label for codes on your box." A few carton manufacturers are using printers or applicators to apply a label to individual corrugated boxes and then give the bundle of corrugated to the end users to start using it in their supply chain. Embedding the EPC/RFID tag in a corrugated box is definitely in its infancy. Right now, most of the substrates that we print an antenna on are very smooth--for example PET--and as we know, most corrugated boxes are not smooth. The question is how to attach the tag to the box.
MILLER: In terms of getting started, could you describe the technology, production, and cost for manufacturing tagged boxes?
ENGELS: If you think of the four major components of an RFID tag, it's the tag itself--a piece of silicon--that provides the logic. Then there is an antenna that is used for communication. This is either a metal deposition or a stamped metal or even a printed antenna if you have conductive ink. Then you have a substrate that tags are typically put on and then you have the actual packaging for the tag itself. These are the four main components.
Today we're looking at stick-on labels you can attach to the package. Where we need to go to get lower cost tags is actually printing the antenna directly onto the packaging itself and then putting the silicon right on the packaging. That will eliminate two major cost components; the adhesion to the substrate as well as the packaging around it. This should make it more environmentally friendly, we hope, as well as lower cost.
MILLER: Would anybody else like to speak to that point?
ZOGG: Yes. From a Kodak standpoint, we are looking at hand application at time of shipment during the pilot phase. That model can't sustain itself. We have to get beyond that and start incorporating it into the primary packaging. That's something that will be driven by the industry.
MILLER: What is the timeframe for the evolution of this process? When will we expect tagged boxes to be a regular part of a production process? Are we talking a couple of years, 10 years?
ZOGG: Well, they are part of our production process now for the pilot, but 2005 is going to be a huge year for all the large key trading players, so I think that within a year or two, this is going to be a widespread part of doing business.
ENGELS: Within the next few years, you will see more tagged boxes coming directly from the packaging suppliers. Manufacturers understand that in order for them to get the most advantage out of an RFID tagged box, they need to have that tag on the box when it arrives at their dock from their packaging supplier. In that way, they can read that box through all of the steps in the supply chain process. There is already pressure building on the packaging suppliers. Those of you that are with Smurfit-Stone, Weyerhaeuser, IP, and Georgia-Pacific, these are all packaging companies that are sponsors of our packaging consortium, and they have all said that many of their customers are putting pressure on them to put tags on their boxes before they ship them.
It will likely start out with labels until we can develop a "printed-on antenna" process and apply this silicon tag directly to form the tag in an efficient and cost-effective manner on the corrugated, or another non-smooth substrate. That is going to take much more time but I believe that you will start seeing chipped boxes delivered to select customers within the next year and probably within the next six months. Within the next two to three years, it will probably be very commonplace to see them.
HENNINGS: The solution today is being delivered directly by product companies using" slap and ship"--a smart tag or label that is applied at the inconvenience of the consumer product manufacturer. The job is getting done, but not on a cost-effective basis. As we just heard here, it can't sustain itself. I'm not sure exactly when a more viable, cost-effective solution will be ready, but I do know it will take a major investment to have any type of converting plant retrofit their equipment and add the systems to place tags right on the box at the time of manufacture. It's probably a 6- to 12-month process to plan a project, get a solution implemented, and have it integrated to an existing information system. Pressure will be applied for a solution from both ends. The consumer product companies and retailers are going to drive it down to the packaging manufacturer who most likely already has a large backlog of projects. Then there's the real problem of printing tag components, such as antennas, on a non-smooth substrate.
MILLER: How can the packaging manufacturer turn this challenge into an opportunity?
MOSER: We don't have all the answers and we're still looking at developing a lot of the standards even today. We want to make sure that as these standards are developed, we have input from everyone and not just from a small group of folks. As we look at the next group of needs and business requirements for this technology, we must have input from the box manufacturers.
HENNINGS: Someone once said that this is really a simple business--we're just making empty boxes. But things get more and more complicated as the years go on. One of the formulas for success has been product quality, on-time delivery, and customer service. If you used this formula, you might get a small premium for your product.
Now there is a new dimension to customer service, with the realization that the ultimate customer for a packaged product is the customer's customer. This is a new area for packaging manufacturers. It's pretty daunting when you read about RFID in trade publications and the general media. There is very specific and useful information on RFID that has been compiled just for the packaging industry. There are some valuable sources out there on RFID, so get some education.
The second point is that RFID really shouldn't be a third or fourth priority in your IT departments. You need to make it a high priority so you will have an advantage when large consumer products companies, even retailers, come to you for their packaging. Ask yourself, "what are we doing on own plant floors to implement this? What do we have in place?" If you're not focused on this soon, you may lose national contracts.
Coming back to information flow, making boxes involves a lot of quality control through visual inspection. Boxes come off the line, they are checked, and the rejected ones are pulled. With RFID, you have a new component. You have to assure the quality of that tag after it is placed on the box. You can't do this just by looking at it; you must accomplish this through information systems that connect directly to the factory floor and tie information to a customer order, and so on. There is a lot to be done and we need to really put a big emphasis on it.
For more information on EPC/RFID in packaging, see Corrugating International September 2005 on www.tappi.org.
EDITED BY ALAN ROOKS, EDITORIAL DIRECTOR
IN THIS ARTICLE YOU WILL LEARN:
* How boxes outfitted with EPC/RFID tags are being used in the supply chains.
* How the current need for tagged boxes is being met.
* Why boxmakers will need to develop methods to apply tags during manufacturing.
* A full version of the transcript this article is excerpted from can be accessed in Corrugating International, an online publication. To access the full transcript as well as other articles on RFID, type "Corrugating International September 2005" in the search field on www.tappi.org. Choose "RFID Adoption, Electrifying."
* "EPC and RFID to revolutionize corrugated packaging," by Don Meadows, Solutions!, November 2004. To access this article, type the following Product Code into the search field on www.tappi.org: 04NOVS027. Or call TAPPI Member Connection at 1 800 332-8686 (US); 1 800 446-9431 (Canada); +1 770 446 1400 (International).
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|Publication:||Solutions - for People, Processes and Paper|
|Date:||Nov 1, 2005|
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