We present a discrete event simulation model reproducing the adoption of Radio Frequency Identification (RFID) technology for the optimal management of common logistics processes of a Fast Moving Consumer Goods (FMCG) warehouse. In this study, simulation is exploited as a powerful tool to replicate both the reengineered RFID logistics processes and the flows of Electronic Product Code (EPC) data generated by such processes. Moreover, a complex tool has been developed to analyze data resulting from the simulation runs, thus addressing the issue of how the flows of EPC data generated by RFID technology can be exploited to provide value-added information for optimally managing the logistics processes. Specifically, an EPCIS compliant Data Warehouse has been designed to act as EPCIS Repository and store EPC data resulting from simulation. Starting from EPC data, properly designed tools, referred to as Business Intelligence Modules, provide value-added information for processes optimization. Due to the newness of RFID adoption in the logistics context and to the lack of real case examples that can be examined, we believe that both the model and the data management system developed can be very useful to understand the practical implications of the technology and related information flow, as well as to show how to leverage EPC data for process management. Results of the study can provide a proof-of-concept to substantiate the adoption of RFID technology in the FMCG industry.
Key words: simulation, RFID, EPC, warehouse, business process reengineering, data analysis
Radio Frequency Identification (RFID) technology is experiencing an increasing diffusion for the optimization of many logistics systems , . A main reason for RFID adoption is the capability of tags to provide more information about products than traditional barcodes . Manufacturing site, production lot, expiry date, components type are among product data that can be stored into the tag chip. Such data are recorded in form of an Electronic Product Code (EPC), whose standards have been developed by the Auto-ID Center, a partnership founded in 1999 by five leading research universities and nearly 100 retailers, products manufacturers and software companies . Moreover, tags do not need line-of-sight scanning to be read, since they act as passive tracking devices, broadcasting a radio frequency when they pass within yards of a reader . RFID tags also solve some of the inefficiencies commonly associated with traditional barcodes, such as, for instance, manually handling cases to read the codes , thus reducing time consumption and avoiding data capturing errors. In some cases, readability of barcodes can also be problematic, due to dirt and bending, reducing accuracy and involving lower reading rate , . Finally, RFID enables both identification and tracking functionalities, which may dramatically change an organization's capability to obtain real-time information about the location and properties of tagged objects . Once data stored in the tag are captured, they become available on the EPCglobal Network, a tool for exploiting RFID technology in the supply chain "by using inexpensive RFID tags and readers to pass Electronic Product Code numbers, and then leveraging the Internet to access large amounts of associated information that can be shared among authorized users" . Although the implementation of RFID for products tagging and EPCglobal Network for information management is still in its early stage, several companies in the Fast Moving Consumer Goods (FMCG) supply chain are testing their application both for pallet and case level tagging .
This paper aims at addressing the issue of how to exploit data stored into RFID tag chips to provide value-added information for the optimal management of logistics processes of a FMCG warehouse. To achieve such aim, we first examine relevant warehouse processes and define their reengineering for RFID implementation. …