Speaking at an IFDA conference dealing with compliance with the Bioterrorism Act of 2002 and RFID technology here last week, David Durkin, principal, Olsson, Frank and Weeda, P.C., and David French, senior vice president government relations, International Foodservice Distributors Association, Falls Church, VA, sought to bring clarity to what has been deemed as an evolving mandate from the government.
Durkin stated that while the interim final rules were to be published by March 2004, at this point the schedule is a "tad optimistic." He noted that once these rules are published, organizational compliance requirements will follow. Hence, if a foodservice distributorship's organizational size dictates that it should comply within six months of publication, then that's when it'll have to be in compliance. He emphasized that IFDA has conveyed its members' sentiments concerning redundancy issues and tracking by purchase orders rather than lots. The jury is still out as to whether the Food and Drug Administration will accept these suggestions in the final rules.
French pointed out that what foodservice distributors must keep in mind is that the purpose of the act is to be able to track back and trace forward food and food products and that basically the recordkeeping and record-access portion of the Bioterrorism Act provides for an FDA-managed recall strategy for the nation. IFDA will continue to keep its membership and the industry apprised of future developments.
RFID is Coming
The use of RFID technology in foodservice is here, at least for the 28 "primary vendors" (foodservice distributors) that serve the Department of Defense. The DOD announced in October 2003 a policy that would require suppliers to place passive RFID tags on the lowest possible piece/part/case/pallet packaging and on key high-value items by January 2005.
Edward Coyle, chief, DOD Logistics AIT Office, provided a briefing that addressed rollout expectations and anticipated benefits to be realized through global implementation. Coyle said the military deems the RFID initiative as one that will provide a more efficient distribution process, reduce inventory and improve data accuracy. The military, like the private sector, is seeking to reduce cost and improve service rates to their end-user.
To ensure its initiative's success, the DOD is presently engaged in pilot studies that will serve as the basis for the forthcoming specifications. Coyle explained that RFID tags come in a wide variety of sizes, shapes and forms but have common attributes; each includes low-energy broadcast circuitry, programmable data storage and operating circuitry. He stated that the RFID tags used in the U.S. Military's Combat Feeding Program pilot were "passive tags." These tags are active without batteries and are less expensive and lighter than the tags that have batteries.
The audience was shown a picture that depicted cases and pallets in chaos, which can easily happen when one is trying to move as much food products as the military does in normal and often times of stress. Being able to identify exactly what should be shipped where and being able to easily confirm this upon receipt will save the military a significant amount of money as well as a significant amount of headaches.
Coyle noted that RFID technology is not inexpensive. At this time it costs about 45 cents a chip. However, weighing this cost against the promise of streamlined logistics where trackability and traceability are realities, coupled with the expectation that once the technology is more common the costs will come down, makes this initiative very reasonable.
The military has plans to offer a series of educational events throughout this year, the next being offered April 6-8 in Washington, DC. Coyle stated his agency's intent to solicit feedback from industry players including the trade associations with the objective of creating a process that serves their needs and translates well in open commerce.
It was acknowledged that at this point the military may be the only customer specifying the use of RFID technology to conduct business in the foodservice channel.
Tammy Weant, senior vice president, business development and industry relations, Integrated Distribution Solutions, LLC, (IDS) commenced her presentation by posing this question: Is the industry RFID ready? Weant stated that RFID technology will make a good process better, but will not fix a bad process. Although not yet in the pilot stage, IDS with Symbol Technologies has been mapping the process as well as assessing its benefits on behalf of its clients.
Weant advised the audience that readiness entailed an assessment of hardware requirements, having in place the infrastructure to capture the data and integrate it with other sources and clarification of your organization's objectives.
In assessing a company's readiness, Weant stated key elements included the following software features:
Compatibility with the hardware requirements
Data base visibility at the case level and
A defined data archive to support your efforts.
Weant observed that for foodservice distributors, the benefit was apparent throughout the operational components of their business processes.
CHEP had piloted RFID technology for nearly six years and Puneet Sawhney, program manager, RFID, shared with the audience CHEP's enthusiasm for RFID implementation. Sawhney stated that the fruits of RFID use provided CHEP with real-time information that can now provide our customers with 100% read capable pallets, which translate into more effective planning and more efficient use of resources.
He noted that cost was an issue and was not overly optimistic that the expense for RFID technology implementation would be lessening anytime soon. He highlighted the cost factor more to challenge the myth of a nickel tag than to splash cold water on the idea. Taking into account its reduced cost to serve CHEP anticipates sharing these cost savings with its customers that employ its PLUS ID service.
CHEP's RFID experience was very positive and offered to work with IFDA to conduct a foodservice channel pilot.
As one would expect, the audience wondered if RFID would replace the bar code. Steve Rosenberg, director of channel management, Uniform Code Council, Inc., reassured the group that the use of barcodes was viable and will not take a back seat to RFID technology any time soon. His presentation highlighted the power of EAN.UCC as a technology solution for enabling global supply chain commerce.
Addressing the near future, Rosenberg spoke about the use of EPC (electronic product code) the latest means of using the internet for real-time communication. He shared his excitement for the use of EPC's supporting RFID project's objectives and noted the military's pilots employed EPC's. He explained EPC is a license plate that is stored onto an RFID tag containing the following:
A header (i.e. identification of which standard is used for this particular tag)
An EPC manager (identifies essentially a company, manager or organization; that is an entity responsible for maintaining the EPC number)
Class object (used by an EPC managing entity to identify a class "type" of thing, such as a Stock
Keeping Unit (SKU) of a consumer package good or the Item Reference Number portion of a U.P.C bar code symbol)
A serial number (unique to the item)
Rosenberg spoke about UCC's efforts to create an EPC Global Network that is just under way with over 20 corporate end-user companies and more than 80 solution partners subscribing. The vision of this network is to facilitate a real-time network that handles multiple data points supporting global supply chain communication.
Adjourning the seminar, IFDA noted its intention to play a leadership role through its Logistics/ IT Committee to educate, identify the issues, participate in pertinent forums, and research the viability of this technology.