Get Ready for More Information about Product Origin

Point of origin is important for consumers, manufacturers, retailers, and governments. Technology and infrastructure are evolving to increase access to accurate point of origin information.

Consumers care where a product was made. Consumers of a given country are often more likely to buy a product that was made in their own country. For some products, consumers associate special value to specific countries and country of origin is becoming an important brand. For example, Columbia invests in consumer awareness of it coffee, Switzerland invests in consumer awareness of a range of products such as watches, and Volkswagen promotes German origin as a desirable attribute for cars. In some cases, not only country but region is an important distinction for consumers; some consumers want smoked salmon not from Canada, but from Nova Scotia or sparkling wine not from France, but from Champagne.

Because consumers care where a product was made, it’s important for manufacturers and retailers to communicate point of origin or point of manufacture to consumers. Manufacturers and retailers know consumers will favor goods from their home country and in some cases pay a premium for goods from a particular country or region. They spend money to promote the value of goods from a particular region, and those who can give consumers confidence in point of origin will be able to obtain a superior return.

Governments invest in their national brands, and maintaining integrity in point of origin information is important for protecting the brand. Governments want to enforce trade restrictions (e.g., United States does not allow the import of highly desirable cigars from Cuba) and keep accurate statistics on imports and exports (e.g., United States Department of Commerce restrictions). Governments want to collect import and value added taxes fairly and efficiently. Finally, governments want to control and track movement of some valuable commodities, such as antiquities and nuclear material.

The infrastructure and technology to confirm point of origin is developing to the stage where businesses and governments can begin to incorporate into their plans an increasing awareness and ability to track point of origin. Goods are increasingly identified with RFID tags and pass through intelligent portals when entering a leaving a country, warehouse, truck, or ship. Additionally, in-store hand held RFID readers are also being deployed. The Electronic Product Code transmitted by RFID tags can be used to confirm the origin of the product.

With point of origin information becoming increasingly available, branding and consumer awareness of micro-geographies will increase. For example, Consumers will always be pleased to know that their coffee comes from Columbia, but will be fascinated to know the specific grower who produced the coffee, and the growing techniques used by that grower. As the technology and infrastructure continues to develop, a whole new world of origin awareness is on its way.

Evolving from Closed Loop to Open Loop RFID Applications

The capabilities of RFID and EPC are difficult to weave into routine thoughts and plans. They are such a departure from today’s technology, that even after many exposures to RFID and EPC, the influence of years of prior experience without them still injects a bias in planning the future. This bias is an adoption challenge that is holding back big returns for organizations and economies of all sizes.

One step to cope with the adoption challenge is to work on a small scale. Alan Sherman of OATSystems recently gave me an example of a small-scale success that is bringing RFID into every day life. An ambulance company previously spent hours with a manual checklist making sure the right equipment was in place to confirm the ambulance was ready for medical emergencies. With an RFID solution, this ambulance company now knows instantly whether essential equipment is in the ambulance, and they are incorporating RFID into ideas for the future of their mechanical maintenance.

Beyond the challenge of implementing closed-loop applications, the more difficult challenge of open loop applications awaits. The ambulance success and most accumulated RFID success stories are closed loop applications. In these applications, tagging and reading are performed on items while they are within the control of a single company. In open loop applications, tags and readers across multiple organizations work together, so that readers from a company can recognize tags and retrieve information about tagged items whether that company placed the tag on the item or not.

Envisioning open loop applications is more difficult than envisioning closed loop applications because it includes coordinated effort among many players about the fundamentals of reading tags, capturing related transactions (Application Level Events), and back-end systems. ATA-2000 and Produce Traceability Initiative (PRI) are examples of ongoing implementations that incorporate open loop thinking. ATA-2000, supported by the aviation industry via the Air Transport Association, defines cradle to grave tracing of aircraft parts, to support quality and efficiency in maintenance and regulatory compliance. PTI, supported by Canadian Produce Marketing Association, Produce Marketing Association, and United Fresh Produce Association, defines tracing or produce from growers, to packers, to retail locations.

ATA-2000 and PTI are exciting programs that are fundamentally changing the way business is done in aviation and in food supply. These types of open loop applications reflect a big way of thinking that produces big returns. They present an example that others can use to identify and envision additional open loop applications to unlock more of the big returns.

I Want More from EPC Search

If RFID does only one thing, it must detect the Electronic Product Codes (EPCs) associated with items. The ability to detect EPCs enables the creation of a time and place log which delivers benefits related to logistics, inventory management, quality, and authentication. These benefits are immense and are reliably delivered by currently available products, but I want more.

The EPC should unlock more than just an item’s logistical history. If I know the EPC of a garment that I own, I want to know care instructions and where I can buy another garment like it. If I am considering the purchase of a consumer electronic, I want easy access to detailed specifications and instructions. If my neighbor has purchased a handbag second hand, she wants to know whether it’s genuine Gucci. If I see a poster for a movie, I want to read the tag on the poster and view the trailer on my mobile device.

Here are some more general statements of the information I want relative to an EPC. I want to...
- search for information about EPCs as easily as I search the web for key words
- get a result set of rich information about any type of item
- access information about a specific item
- avoid the labor and mistakes of typing in a long number
- be able to perform my search from my mobile device or any computer

International Standard Book Numbers (ISBNs) that are used to identify books provide an example of what can be achieved. Using just an ISBN number as a Google search term on my computer or mobile device returns purchase opportunities, summaries, author information, and more. ISBN searching has reached an admirable state of maturity. One drawback is that because most people including myself don’t have a barcode reader, typing the ISBN number is manually intensive and error-prone. A second drawback is that there is no item-specific identification, so I can’t determine whether a specific book is a copy my brother loaned me or a copy I bought myself.

The ISBN standard was published by International Organization for Standardization (ISO) in 1970. Since UPCs first went into production use only 4 years later in 1974, it’s surprising that searching for information about UPCs is considerably less mature. Searching for information about a UPC using Google is fruitless. Instead, various specialized and competing search facilities (e.g., http://www.singleupc.com/, http://www.upcdatabase.com/, http://upcdata.info/) provide diverging results. Even using the specialized UPC search facilities, results are limited, consisting of a small number of highly structured fields such as description, size/weight, issuing country, and last modified date.

The EPC 96-bit format achieved a level of stability in June 2008 when "EPCglobal Tag Data Standards Version 1.4" was ratified by GS1. Predictably, freely available search facilities for EPC lag those for ISBN and UPC, but standards efforts related to Object Naming Service, EPC Information Services, and EPC Discovery Services provide a foundation for emergence of EPC search that can fulfill the wants above. With these standards efforts and the experience of ISBN and UPC, the best of searching for things lies ahead.

Revolutionary Applications when Mobile Broadband meets RFID

In June 2009, Ericsson’s VP of Systems Architecture, Håkan Djuphammar, proclaimed that all new mobile phones will be equipped with RFID by summer 2010. As of today, NCFWorld reports active RFID tag pilots at municipalities in France, Telefonica, Garanti Bank in Turkey, and others. My bet is that Håkan will not achieve his timeline, but that ultimately his vision for widespread use of phones for authentication, access, and payment will be realized.

Even if it is a delay relative to Håkan’s ambitions, RFID read and transmit will become a common feature of phones at about the same time 4G broadband capabilities become frequent part of phone-network packages. In technical terms, this will allow streaming of rich content in response to EPC Application Level Events (ALEs). Here are some future real life examples:

• An in-store shopper touches her phone to a garment and receives video of celebrities modeling similar fashions, with accessories
• A coffee drinker pays for a cup of coffee made with beans from his favorite region of Columbia and receives an infomercial on neighboring coffee producing regions.
• A patient uses a phone to make a co-payment for medical services and can immediately use the phone to view explanation of benefits from the payer

A lot of moving parts need to come together to make these solutions and other solutions real. In addition to availability of devices from the likes of Sony Ericsson, point of sale/service experiences need to be designed and deployed, networks need to be constructed, and back-end systems need to be developed. That’s a lot of coordinated investment but Sony Ericsson and the 4G network providers are leading the charge with big investments. Now businesses can make their application investments and know they are not alone. The time is right for businesses to make this three-way partnership. These applications are too exciting and valuable to pass up.

Heed the Business Case

“We are working with EPC, but less with RFID, due to cost per unit”, is what a friend replied when I asked about his RFID program. The decision was made with more than a million dollars invested to explore RFID for the purpose of item-level track and trace, and especially for purpose of preventing counterfeit product from entering the distribution chain. Based on careful analysis, even with a paramount need to prevent counterfeiting, his plan is “EPC yes, RFID no”. They will use EPC for unique item-level identification, but for the foreseeable future, the EPCs won’t be affixed to products via an RFID tag.

After much anticipation about employing the perfect marriage of EPC and RFID, the conclusion to forego RFID is on one hand, a disappointment. Even my friend’s company, with significant resources to plan and execute for large-scale and long-term, couldn’t make the business case work for item-level tagging. It’s disappointing at first, but on the other hand, deferring to business case over emotional attachment to technology deserves much respect.

When the business case doesn’t make sense, it’s best to call off the deployment early and avoid the more painful reality of bad economics later in the deployment. Moving ahead when the business case doesn’t make sense only results in high-visibility, costly failures. Failure to heed a bad business case will trigger a “gun shy” attitude and undermine support for future RFID deployments, even when they do make business sense. Failure to heed a bad business case will also present an unwarranted warning to others that will bias their intuition against RFID projects.

Asset tracking with RFID can pay highly-respectable returns. Pallet tagging, case tagging, and a wide range of other RFID applications can pay highly-respectable returns. In spite of my friend’s company deciding against it, item level tagging can, whether today or in the future, also pay respectable returns. Over time, as the technology continues to mature, as the advantages of scale economics increase, as infrastructure and knowledge develop, more applications will pay more handsome returns. The key to achieving those returns is understanding when and where to invest.

It’s true that one-size-fits-all does not apply to RFID and EPC solutions. Each type of need should be addressed individually. It’s also true that one-size-fits-all does not apply to RFID and EPC business cases. The business case for each situation needs to be considered individually. There’s no valor in forging ahead with a deployment that doesn’t make business sense, and then later encountering the harsh reality of economics. It’s better to do careful business analysis and invest accordingly. It’s better to get a solid business case, one way or the other, and heed the business case decide.

EPC Changing the World in Three Arenas

Yes, [RFID and] EPC technologies will fundamentally change the world. Only time will reveal the specifics, but success in three EPC investment arenas will influence the future. In one arena, investments are made with the interest of individual enterprises as a primary consideration. In a second arena, investments are made to serve an industry by using a shared infrastructure. In a third arena, investments are made to provide uniform services to the global public.

There will be many payoffs, and some losses, in each of the three EPC investment arenas. The payoffs will accelerate to the extent investments in the three arenas are coordinated. Ken Traub is shaping and galvanizing standards (e.g., EPCIS) that will facilitate that coordination. Nobody has a crystal ball, but Ken has his finger on the pulse of EPC adoption. Ken and I spoke recently about the state of world-wide EPC adoption and this blog post is partly a reflection on my conversation with Ken.

Although complex by any measure, the first arena of enterprise-focused activity is an easier problem to define. Customer-premises-based or private-cloud solutions are a natural response to these enterprise-focused problems. IBM, SAP, and Axway, among others, are leveraging strategic competencies and making investments with emphasis in this first arena.

Relatively-speaking, it’s easier to define and respond to enterprise-oriented problems, but industry orientation provides the opportunity for additional benefits. Hosted and software-as-a-service solutions provide advantages for industry oriented solutions via neutral-party-information-sharing, shared cost of capital, and easier-to-manage risk profiles. TraceTracker’s GTNet and FSE’s GDSN pool provide examples of investment in this second arena in concert with the food and beverage community.

The third arena, uniform services for the public, envisions a day when the need to exchange information about RFID tags and EPCs is common and routine. In anticipation of this common need, an open-loop, general-purpose, publicly-accessible service is appropriate. VeriSign shares this vision and is committed to providing Object Naming Service (ONS) to connect interested parties with information about individual EPCs.

The players mentioned as examples above and many others are managing investments and dependencies in the three arenas. To enable and re-enforce their efforts, standards for EPCIS, EPC Discovery, GDSN, and ONS hold the promise for additional returns via increased interoperability among investments. Those leading the charge in the three arenas and those dedicated to standards are setting the stage that will change global productivity and fundamentally change the world.

How are the RFID and EPC Adoption Models Different than Adoption Models for Other Products?

This week, RFID Journal will host a webinar featuring Geoffrey Moore. I was first introduced to Geoffrey by Jeff Miller at Documentum. Geoffrey has written landmark books on how new technologies are adopted, including Crossing the Chasm and Inside the Tornado. I look forward to catching up with Geoffrey's latest ideas applied to RFID on the webinar.

In anticipation of the webinar, I formed up some questions that I hope Geoffrey will speak to. Technology adoption models presented in "Crossing the Chasm" and "Inside the Tornado" are mainstream ideas for tangible products, software, and services. Some products provide most or all of their value through "network effects". Network effects occur when the return to an individual or single organization is dependent on the adoption decisions of others. My questions center around the notion that different adoption models apply when network effects contribute a large share of a technology's value:

- How do you see network effects impacting RFID adoption?

- To what extent is adoption of EPCIS, ONS, GDSN, and EPC Discovery governed by network effects?

- How is the adoption model for network-effect technologies different, and how should those differences be managed in the case of RIFD, EPC, and related technologies?


I’ll report back in this space with more related to the webinar with Geoffrey and on the questions above.