Is RFID the Key to Supply-Chain Security?

Panelists say that while RFID holds promise, it should not be the only technology used to protect the supply chain. They call for more accountability, increased visibility into the supply chain and better communication between partners.

Has RFID been overly hyped? Most speakers agreed that the answer is "yes" during a panel discussion Tuesday in New York City that looked at the roles government and private industry can play in protecting the global supply chain from terrorism and theft.

Joseph McGrath, president and chief operating officer at Unisys Corp., suggested that theres too much hype surrounding RFID during introductory remarks at the event, which was held at the U.S. State Department in New York City.

RFID (radio frequency identification) is only "part of the answer," Gene Delaney, president of global relations and resources at Motorola Inc., agreed in a Q&A session that followed. When deployed, RFID needs to be used as part of an integrated system designed for supply-chain security, Delaney said.

RFID isnt a "silver bullet," said Rick Kessler, president and CEO of Horizon Services Group. Emerging alternatives to RFID include GPS (Global Positioning System) and cellular wireless technology, Kessler said.

In any case, with terrorists possibly on the watch for security holes in the supply chain, it isnt a good idea to put "all your eggs in one basket," said Norman Inkster, a recognized security expert and former president of Interpol.

But a pharmaceutical firm called McKesson has decided to make RFID a major initiative over the next few years, said Ron Bone, senior vice president for supply-chain solutions at McKesson.

McKesson is helping to pursue RFID standardization through its involvement in the EPCglobal industry group, in conjunction with other pharmaceutical companies, CPG (consumer packaged goods) makers, and retailers such as Wal-Mart, Target and Albertsons.

/zimages/3/28571.gifA merger has created a $65 million e-pharmacy that uses RFID. Click here to read more.

During an interview with later, Unisys president McGrath maintained that RFID is simply one of a number of technologies—including bar-coding—that can be used for tagging items in the supply chain.

He predicted that GPS and cellular will rise in importance, since these wireless technologies can carry information over much wider ranges. Other elements of supply-chain technology include the underlying network, applications and RFID middleware, for instance.

Unisys has been providing RFID and other supply-chain technologies to the U.S. Department of Defense for more than 10 years, McGrath told The company is also participating in EPCglobal retail trials through its partner Sara Lee Corp.

What are some of the biggest threats to the security of the supply chain? During their session, panelists pointed to problems in areas ranging from transportation and logistics to interpersonal communications.

"The timing and cadence of the supply chain is what lets us meet the needs of our customers," Motorolas Delaney said.

McGrath cited the "first leg" or "leg of origin" as particularly critical. But he added that a shipment traveling from Pakistan to New York might make several stops along the way, in remote locations such as India, Sri Lanka and Canada.

Inkster of Interpol contended that the rapid growth of outsourcing in recent years has been contributing greatly to supply chain security woes.

Kessler of Horizon Services Group called upon partners in the supply chain to provide more information to one another. "Each party has its own view," he said.

"Information is critical [to making] a risk assessment," said another speaker, Elaine Dezensky, director of cargo and trade policy at the U.S. Department of Homeland Security.

Also during the event, Stephen Flynn, director of the Independent Task Force on Homeland Security Imperatives who formerly served in the U.S. Coast Guard, emphasized that supply-chain management can help to build accountability as well as visibility.

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