Sara Lee wrestles with RFID

Sara Lee wrestles with RFID

Sara Lee Corp. is testing radio frequency identification (RFID) tags on some product cases and shipping pallets to meet a mandate that RFID technology be used on goods sent to Wal-Mart Stores Inc.'s Dallas-area distribution centers starting in January. Ray Hagedorn, who works in Cincinnati as vice president of business solutions for the IT department in the Sara Lee Foods division, recently spoke with Computerworld's Carol Sliwa about what Sara Lee has learned about RFID. Excerpts follow:

Which applications will make use of the data that you gather through RFID? We're a major supplier (to Wal-Mart), and we had to focus on January. If we got too caught up in breaking down the processes and everything else like that at this particular juncture, we were going to waste a lot of time prematurely. So we said, "Let's narrow our focus. Let's learn about the technology."

Are you mostly taking a "slap and ship" approach now? Absolutely. And if everybody would be honest with you, that's what they're doing.

How much did you spend on the RFID tags you're using? It was 35 cents a tag. As we look at our newer models, it's going to be south of 35. I'm not sure exactly what it is yet.

Are tags being read at the accuracy rates that Wal-Mart expects? Yes. At a case-by-case basis, as I go down through our process, I validate that case. A tag is on it. I encode the tag and then I immediately validate that, and I capture those statistics. If it doesn't read, I can pull that out and put another tag on until we get it read. That gives us our 100 percent.

It sounds time-consuming. Oh, absolutely.

Wasn't RFID supposed to automate the process? It's not ready for high volume.

What advice would you give your peers? It's early. Don't make huge investments. Get started, pick your point, learn. Pick a partner in your business (operations), because you can't do it (all) as technologists. We have our logistics group very involved with us every step of the way. In fact, we share co-management of (the RFID project).

Have you done any integration? Oh absolutely. We have integration going backward. We're just not using the data. We don't know what to do with the data yet.

What are some problems with RFID technology? The tags, without question. From the middleware side, this is still early in its evolution. There are many vendors out there right now that have middleware that is integrated into their standard offering of product, and they also have some things that can work with someone else's, like a warehouse management system and things like that. You can go through different research or consulting groups that give you a short list of things that you should be looking for in a middleware vendor. But don't worry about it. Your solution provider there probably is not going to be the solution provider 12 months down the road.

Do you have any idea what the biggest benefit is going to be for your company? No. I believe there is value, and this is predicated on good information flowing back to me at key points in time, near real time, that our planners can use to better plan and better forecast -- allowing us to shrink safety stock, for example.

When do you think you'll start to see value? I even hate to hazard a guess. But I would say we would be really looking for things to dramatically improve where I can start using information flowing back, regardless of whether it's internal or external, within the next 12 months. ...You first look at where you have pain points for information accuracy, timing, controls or whatever the case might be. And if you say, "Wow, I've got a big issue here. RFID today can make a vast improvement" -- go for it.

We just haven't found, in our 100,000-foot fly-by, any of that that immediately jumped out.

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