EDI can be considered a legacy technology. In contrast, RFID is recently coming into its own. Together, RFID is changing EDI. The result has the potential to elevate business processes in any number of industries.
Electronic Data Interchange, or EDI, has been a component of various supply chains for almost four decades. Originating with Ford Motor Company in 1983, suppliers have been receiving production schedules and/or purchase orders electronically.
Today, there are over 250 commercial EDI transaction sets. These ease the exchange of transportation, student loans, mortgages, customs and healthcare information. 70% of business commerce documents consists of the same data, entered over and over between customer and vendor.
RFID itself is not “new”, having been developed for commercial application in the 1990s. By the year 2000 RFID was proclaimed to be “the next big thing” – even making the bar code obsolete. Yet, early applications of RFID turned out to be expensive, unstable, and lacking reliable ROI.
The basic components of an RFID deployment include RFID tags/antennae, readers/portals and middleware. An RFID tag consists of a tiny chip and antenna called an integrated circuit. This tag may also be part of a barcode label that may be attached to or inserted in a product, asset or containers such as bins & pallets.
Some tags store static information such as a container ID value. Other tags may carry variable information such as electronic product code, GS1 data, and so on, that can be read, tracked or appended to by RFID readers. Readers or portals are fixed or mobile network-connected devices, with antennae that send power, data and commands to the tags. Often overlooked, RFID middleware filters, manages and communicates the data between the tag and the back-end system.
Incorporating RFID within an EDI process can further eliminate manual efforts, automate processes and enhance compliance between supplier and customer, such as:
Let’s take this idea a step further. If the customer were utilizing RFID and EDI, they could receive as ASN and the data cross referenced to their Purchase Order. Instead of manually scanning in and counting an order, they could receive a shipment of pallets through an RFID portal. The materials would automatically be verified within their system against the PO and ASN before being entered into inventory. After this successful triple verification, their system would generate an EDI 820 payment notification.