Microsoft Expands RFID Solutions

At the recent EPCglobal U.S. Conference 2004, Microsoft Business Solutions announced that it is expanding the scope of its radio frequency identification (RFID) initiative to help small and midmarket segment businesses meet RFID technology compliance mandates from large trading partners and drive efficiencies in internal operations.

Jack Link's Beef Jerky, a U.S.-based, midmarket segment international snack manufacturer whose customer roster includes Wal-Mart and other large retailers, has been working with Microsoft Corp. and partners ABC Computers Inc., Avery Dennison Corp., SAMSys Technologies Inc. and SATO America Inc. to implement RFID. The RFID data will be integrated into Microsoft Business Solutions-Navision, Jack Link's Beef Jerky's enterprise resource planning (ERP) solution, to increase visibility and control across its receiving, manufacturing and distribution processes, as well as to largely automate associated transactions.

Jack Link's Beef Jerky is working with an early version of Microsoft Business Solutions' forthcoming RFID solution. Microsoft Business Solutions plans to incorporate this RFID functionality as part of upcoming ERP product releases.

Satya Nadella, corporate vice president of Microsoft Business Solutions, said these efforts are further evidence of the business group's ongoing commitment to helping small and midmarket segment customers respond to new challenges in managing their manufacturing and distribution processes across their supply chains.

"We continue to strive to make complex things simple for our small and midsize-business customers, building solutions that meet their unique requirements and enable small and midsize businesses to function more like large enterprise companies," Nadella said. "This RFID project with Jack Link's Beef Jerky is an excellent example of this work in action."

The Jack Link's Beef Jerky project will be implemented in four phases, with the support and involvement of several Microsoft partners. ABC Computers is working with Microsoft and Jack Link's Beef Jerky's IT department, managed by John Ericson, IT director, to integrate RFID data with the customer's existing Microsoft Navision 3.7 application, leveraging an early version of the business group's RFID solution that will make RFID support an integral part of its future ERP offerings. Avery Dennison is providing smart labels and RFID compliance testing services. SATO America is providing RFID label printers that have encoding and tag verification capabilities, and SAMSys Technologies is delivering readers and antennas.

The first phase, which was completed in less than three weeks, involved tagging cases and pallets for select SKUs of beef jerky destined for the Wal-Mart distribution center in North Texas. Even though Jack Link's Beef Jerky will not be impacted by trading partner mandates until at least 2006, the company decided to be proactive regarding RFID requirements. "We know RFID is coming sooner or later, and we wanted to ensure we are ready to continue to better serve our customers," said Karl Paepke, vice president of operations at Jack Link's Beef Jerky.

Although the initial phase focused on achieving low-cost trading partner compliance, the upcoming phases will focus on driving internal business benefits for Jack Link's Beef Jerky. The second phase will leverage RFID in connection with Microsoft Navision for manufacturing tracking. RFID tags will be attached to totes and racks in a closed-loop system and will replace the existing manual auditing process with automated recording of ingredient lot and finished products tracking.

"Given the large number of production steps and speed of operations, it would be uneconomical if not impossible to perform the required auditing steps using manual intervention," said Donavan Lane, president of ABC Computers. "With RFID readers automatically feeding data into Microsoft Navision, we believe Jack Link's Beef Jerky will not only realize greater operational visibility and control, it will also be able to pinpoint efficiencies in the manufacturing process through better control of yield at each production step."

The third phase of the project will extend the process to raw-material supplies, to record lot information as part of the receiving and picking processes. It will enable Jack Link's Beef Jerky to generate an automatic record of all raw materials going into a specific batch of product.

The fourth and final phase will leverage RFID in the distribution process to automate internal stock transfers from the company's manufacturing sites to its central distribution center. By leveraging the increased visibility and inventory accuracy across its supply chain from end to end, Jack Link's Beef Jerky expects to shorten cycle times, improve delivery performance and increase inventory turns.

Paepke said Jack Link's Beef Jerky expects to realize considerable benefits from the project. Like many other midsize businesses, Jack Link's Beef Jerky has thus far not made extensive use of automated data capture and has relied heavily on manual processes. In many cases, this means that data is simply not captured or is prone to errors. "By applying RFID across our entire supply chain, we hope to not only increase visibility and accuracy to a level we never thought possible, but also to largely automate all associated business processes," Paepke said. "Although RFID is a key enabler, the integration into the business processes in Microsoft Navision is the driver of the business benefits we expect to realize. We want to leapfrog the bar-code era and go straight to the finish line with RFID."

Nadella says although the current driver of RFID adoption is a business's desire to be compliant with trading partners, the example of Jack Link's Beef Jerky shows that innovative midmarket segment companies understand the technology as a potential source of competitive advantage. "Furthermore, this project is evidence of our mandate to democratize RFID by bringing it to small and midsize companies," Nadella said.

Microsoft Business Solutions plans to include RFID technology as part of its ERP solutions, enabling small and midsize customers to fully leverage the technology while retaining a familiar, easy-to-manage IT environment. "We're approaching RFID as a natural extension to existing and future business logic and processes represented in our ERP products, working to ensure a deeper level of process integration as the key driver of business value while reducing the need for training and minimizing the complexity of the IT landscape for our customers," Nadella said.

For more information, visit http://www.microsoft.com/.

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