Chapter 2: RFID in Warehouse Management

CHAPTER 2: RFID IN WAREHOUSE MANAGEMENT

Objectives
The objectives are:

Describe Radio Frequency Identification (RFID) technology

List the benefits of RFID
Receive goods
Pick/Pack/Ship with RFID

Introduction
RFID helps manufacturers and distributors gain improved visibility into their
supply chain by increasing the number of data capture points in their supply chain.

The aim is to put RFID tags on pallets, cases, and items so that they can be
uniquely identified and tracked in the supply chain. The tracking is performed by
collecting data when a unique pallet/case/item is registered at a specific location.
This data is collected by an RFID application and fed to Microsoft Dynamics AX
2009 where it is processed accordingly.

Scenario
An experienced software consultant is implementing RFID technology for a
Contoso Company that receives and ships goods. The consultant must set
Microsoft Dynamics AX 2009 defaults and parameters according to the needs of
the company.

As soon as the technology is installed and configured, the shipping and receiving
personnel will receive goods and tag them for RFID tracking in the warehouse.
The RFID tags are used to keep track of inventory and product movement in the
warehouse. This technology is also used to pick, pack, and ship products.

RFID Technology
How RFID Works
RFID is a generic term for automatic identification technologies that use radio
waves to identify objects.

An RFID system typically consists of:

Tags
Readers

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The transponder or tag consists of a chip and an antenna that is attached to objects
such as pallets, cases or individual items. The tag is encoded with a unique
identifier that serves as the unique license number plate for the object.

The second component is a reader. The reader contains an antenna that

communicates with the tag. This creates a radio frequency field that detects radio
waves. Do not be confused by the term ’reader’. In RFID, a reader is a device that
can both read data from the tag and write data provided by the middleware back to
the tag.

The middleware reads/writes data to/from the tags through the reader. It filters,
stores and evaluates obtained data against business process and sends that
information to a system such as Microsoft Dynamics AX 2009.

To identify an object:

A tag passes through the radio frequency field generated by the reader.
The tag reflects back to the reader the identifying information about
the object.
A middleware component uses the unique identifier as a pointer to
additional information associated with the object in an internal
application or database.

RFID Technology Benefits

RFID technology can provide the following benefits over traditional barcodes:

Line of sight is not required to read the RFID tag and multiple tags can
be read at once leading to a less labor intensive process.
RFID tags are less susceptible to damage.
Significantly more data can be captured such as expiration dates and
service records.
RFID data can be re-written and therefore reused.

Growth despite Business Challenges

Although RFID technology has the potential to revolutionize supply chain

management the technology is still in a relatively early stage of development.

Early adopters have experienced challenges with read reliability and interference
issues. Tag and reader costs must decrease to more easily support the business case
for RFID implementation.

Despite these challenges factors are coming together to increase the adoption of
RFID technology. Several groups are mandating the use of RFID in their supply
chain:

US Department of Defense
Major groceries
Consumer electronics retail chains

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Global aerospace companies

Not only do these mandates affect a diverse set of vertical industries but they will
lead more companies to initiate business case driven deployments. Industries that
are predicted to initiate or increase deployments include:

Automotive
High tech
Logistics services
Pharmaceuticals

EPC Numbers
The Electronic Product Code was created as a low-cost method of product
identification using RFID technology. The EPC is a simple, compact license plate
that uniquely identifies objects in the supply chain such as:

Items
Cases
Pallets
Locations in the supply chain

EPC numbers identify the manufacturer and product type. The technology allows
you to find products in a specific area (e.g., shopping cart, shrink wrapped pallet,
defined area of the warehouse, or a track passing under a scan station). The serial
number uniquely identifies the unit and ties it to transactions such as when it was
received, associated purchase orders, sales orders and customers.

EPC is built around a basic hierarchical idea that can be used to express a wide
variety of different, existing numbering systems, such as the EAN.UCC System
Keys, Unique ID (UID), and Vehicle Identification Number (VIN).

Like many current numbering schemes used in commerce, the EPC is divided into
numbers that identify the manufacturer and product type. But, the EPC uses an
extra set of digits, a serial number, to identify unique items. The EPC is the key to
information about the product it identifies that is located in the EPC global
Network.

An EPC number contains:

A header that identifies the length, type, structure, version and

generation of EPC
A manager number that identifies the company or company entity
An object class, similar to a stock keeping unit (SKU)
A serial number that is the specific instance of the Object Class being
tagged

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Additional fields may also be used as part of the EPC to correctly encode and
decode information from different numbering systems into their native (human
readable) forms:

Serial Shipping Container Code. The SSCC is a standard European

Assistance Network (EAN) identification number that consists of 18
digits, used for the unique identification of logistic (transport, storage,
or both) units.
A logistic unit is an item of any composition established for transport
and storage which has to be managed through the supply chain.

Scanning the SSCC marked on each logistic unit enables the physical movement of
units to be individually tracked and traced by providing a link between the physical
movement of items and the associated information flow. It can also be used for a
variety of applications such as:

Cross docking
Shipment routing
Automated receiving

Receiving Goods
Tagging Goods
This scenario describes how to tag at the case and pallet levels.

Scenario
Warehouse personnel in the Contoso Company can tag pallets, cases, or items at
the end of the production line. Warehouse personnel should tag at the end of the
production line at the same time that the pallets, cases, or items are labeled with
bar codes.

The tagging operation has to be included in the routing and the physical tag has to
be included in the BOM structure to ensure that the cost of the tag is applied to the
finished goods.

As soon as a pallet, case, or item (in this example BOM) is at the tagging work
station, the system generates an Electronic Product Code (EPC) number for the tag
and written this EPC number to the tag. The EPC number is generated as a serial
number by using the typical routine to allocate serial numbers in Microsoft
Dynamics AX 2009.

If no tag is present at the reader, the system requires the platform to generate an
alert. This alert is displayed to inform the worker that there is a tag missing or a
bad tag present. A new tag can then be positioned and the write operation can
recommence. The warehouse worker must be present at the reader.

When a new pallet of cases or items is complete an EPC number must be generated
for that pallet. The EPC number contains the Global Trade Identification Number
(GTIN) of the pallet. When the pallet is at the writing station the EPC number is

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written to the tag as described previously. An EPC number is assigned to finished

goods that have been manufactured. The tagging can be in two levels:

Case or item level

Pallet level
Procedure: The Tagging Process

NOTE: In Microsoft Dynamics AX 2009, the RFID system works only with the
SGIN tag type.

The following steps define the process of tagging goods for the previously
described receiving goods scenario.

1. During operation number 30 a warehouse worker applies a tag to the

finished good and initiates the writing of the serial number to the tag.
2. The Production input journal is created and the production order
number for the finished good is selected.
3. Click Function > Create lines. This creates a line for the quantity on
the production order for the finished good.
4. Click Function > EPC number. The system generates an EPC
number for this line and assigns it to the line. The EPC number is
inserted in the Pallet ID field.
5. Enter the warehouse and location manually or enable the system to
calculate it when you post the journal.
6. Post the journal. The finished goods are transferred to the desired
warehouse and location, or a transport order is created by using the
desired warehouse and location as the destination.

Logistic Unit
Logistic units are handled by many partners along the supply chain and may cross
industry and national boundaries. Efficient supply chains require a label and
associated Electronic Data Interface (EDI) messages that follow international and
multi-industry standards.

GS1 provides a standard for the numbering and bar coding of logistic units: the
UCC/EAN Logistics Label. The UCC/EAN Logistics Label combines a world-
wide unique reference number: the Serial Shipping Container Code (SSCC) with a
secure bar code symbology, UCC/EAN-128. This combination enables all
participants in the supply chain to use a common, standard solution for their
tracking and tracing needs.

Procedure: Item Arrival through an Item Arrival Journal

This section details the steps that are involved in receiving tagged goods by using
an item arrival journal.

1. Go to Inventory management > Journal > Item arrival > Item

arrival. The Location journal form is displayed.

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2. Create a new record.

3. In the Name field, select “Item arrival journal”.
4. On the Default values tab, select the appropriate entry in the Account
number field.
5. In the Reference field, verify that the “Purchase order” is selected.
6. In the Number field, select the appropriate purchase order number.
7. In the Site field, select appropriate site.
8. In the Warehouse field, select the appropriate warehouse.
9. In the Location field, select an inbound dock location type.
10. Click Functions > Create lines to retrieve the purchase order. The
Create journal lines for location journal form is displayed.
11. (If you want to transfer the quantity from the purchase order, select the
Initialize quantity check box. Microsoft Dynamics AX 2009 creates
the lines corresponding to the quantity of items that fits onto a pallet.)
12. The lines appear in the Journal lines form.
13. Enter the pallet ID in the Journal lines form. Pallet numbering can be
done in two ways:
Select the number of the pallet in the Pallet ID field for the line.
Use a consecutive pallet numbering system developed by the
company. A series of numbers is used to obtain consecutive pallet
numbers. Click Functions > Pallet ID to create a new number.
14. Click Functions > RFID mapping to map RFID tags to the lines.
15. Use the form to map RFID tag reads to inventory transactions for
arrival journal lines. In the upper pane of the form, you can filter on
processes and dates so only tag IDs from the selected interval are
shown.
16. Click Apply.
17. Check the journal, correct any mistakes, and post the journal.
18. Following posting, the inventory transaction has the status Arrived,
and the item is registered at the inbound dock.

Receiving Tagged Goods without Advance Shipping Notice

(ASN)
An Advanced Shipment Notice (ASN) is an electronic notification of pending
deliveries; an electronic packing list. Its use is currently mandated by many
companies. It contains information that the shipper communicates prior to the
arrival of goods, such as shipping date and shipping quantity.

Some companies require suppliers to send an ASN to provide the association

between the unique identification encoded on the RFID tag(s) and the product
information at the applicable case and pallet level.

Occasionally, goods must be received without the arrival of an ASN. The item
arrival journal has the check boxes for the fields Check for pallet tag and Check for
item tag selected. These two parameters are copied onto every line in the journal
for validation.

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Procedure: Receiving Tagged Goods without an ASN

The steps for receiving tagged items without an ASN are:

1. Items are scanned as they are received.

2. Entries are made in an item arrival journal.
3. After all journal lines are entered the user clicks RFID mapping. A
mapping form opens that shows all lines from the arrival journal and
all the reads from the inbound dock which have the state ready.
4. The user maps the arrival lines to the corresponding read either by
dragging or by marking and clicking a button.
5. If a matching read is not found, the user can put the goods by a reader
and click Read. The value of the Device field determines which
device to use for the read process. The detected reads are then
displayed in the list of available reads.
6. The arrival journal lines are updated with tag data when the form is
closed.
7. Upon posting and validation of the journal, all lines are checked
according to the two check parameters.

RFID Mapping Form

The RFID Mapping form can be accessed from several places. The user accessing
the form must pass a list of records to the form. These records are displayed in the
left pane of the form. By default, the right pane displays all tag reads with the
status Ready. The records are mapped either by dragging or by marking and
clicking a button.

This form has some parameters that can be set by the user to ease the mapping
process:

Business process – The records in the right column are filtered based
on this value. For example, only reads from all shipment processes are
shown.
Process – All defined processes of the selected process type. The
records in the right column are filtered based on this value. For
example, only reads from a specific process are shown registered in
the system.
Server ID – A list of RFID servers.
Device name – A list of devices registered in the system. The selected
device is used when the Read tag is clicked.
Tag ID – All, Pallet, Item – the records in the Tag ID field are filtered
based on this value.

This form has the following buttons:

Automap – A suggestion of mapped records are shown.

Read tag – Reads from the specified device and displays the detected
reads in the right pane.

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Receiving Non-tagged Goods

When receiving non-tagged goods, an item arrival journal is created. If tagging is
needed, click Write tag. The Write tag form that shows all the lines from the
arrival journal is open. The user has the chance to use either a device or a printer
for writing tags.

When all tags are written the user closes the form and the arrival lines are updated
with the new tag data.

Write Tag Form

The caller must pass a list of records that contains tag information to the form.
These records are displayed in a grid.

The user has the chance to use either a device or a printer to write the tags for each
record in the grid.

Printer – there are printed tags for all selected lines in the grid when
Print is clicked.
Device – The user must select a device in the Device field before any
write can occur. The drop-down list in the field shows a list of devices
marked as write enabled. The device writes a tag when Write tag is
clicked. Only one tag can be written at a time. The outcome of a write
is shown in a status box underneath the Device field. The value can be
either Tag written successfully or Write failed.

A list that contains all records, for which a tag has been written, is returned to the
user when the form is closed. It is then up to the user to update the records in the
database.

Pick/Pack/Ship
Options on Forms
A group for RFID information is located on the Setup tab of the Customers form.
The group consists of the Item tagging and Pallet tagging fields. The default
settings of these fields are defined in the Customers form.

Activate Tagging
The fields in the lower pane of the Sales order form in the RFID tagging field
group of the Setup tab define if the customer uses item, case, or pallet tags.

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FIGURE 2-2: SALES ORDER FORM

When the user starts the picking, the fields are defaulted from the sales lines onto
the corresponding shipment base.

Procedure Picking Tagged Items

The following steps in the picking of tagged items assume that reading and writing
of tags will occur at a separate tagging station with a fixed reader (Inventory
management > Common Forms > Picking routes).

1. The warehouse worker ends the pick round at a tagging station.

2. The pick list shows which items or cases need tagging.
3. If the items are selected for tagging the warehouse worker cannot
approve the pick list line until tag information is added to the line.

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FIGURE 2 3: PICK FORM

1. The warehouse worker places the items at the reader and performs the
read operation.
2. The warehouse worker then clicks either Read tag or Write tag and
the RFID mapping form is displayed.
3. The warehouse worker then matches the reads with the lines in the
picking specification. If the item quantity on a line is more than one
item the line splits. The reads are matched when all lines contain a
quantity of one.
Picking Non-tagged Items
If the system does not have tag information on the serial number each item must be
positioned by the reader one by one. The system then tries to read the tag and if no
information is returned the system generates a tag and writes the information to the
tag.

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If the system can read a tag an error message is shown and the warehouse worker
must decide whether to overwrite the existing tag. In case the tag is not rewritable
an error message will occur.

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Summary
RFID technology is a technology that helps manufacturers and distributors to
increase inventory accuracy and ease the gathering of real time inventory
information.

The appropriate RFID server version needs to be set up in inventory parameters in

your system to enable RFID functionality.

An RFID system consists of:

Tags
Readers

Tagging pallets, cases, and items enables the unique identification and tracking of
these objects throughout the supply chain. RFID tags are less susceptible to
damage. Errors in inventory levels can be significantly reduced and personnel in
the supply chain can quickly know where inventory is located. RFID data can be
re-written and therefore reused.

The Electronic Product Code (EPC) is a low-cost method of product identification

using RFID technology. EPC numbers identify the manufacturer and product type.
The technology allows you to find products in a specified area quickly and by low
costs.

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Test Your Knowledge RFID in Warehouse Management

How RFID Works
1. What are the main components of RFID technology? (select all that apply)
( ) Tags
( ) Readers

2. What type of tags can be used in Microsoft Dynamics AX 2009within RFID

system?
( ) SGIN
( ) EPC numbering
( ) Vehicle Identification Number
( ) EAN.UCC System Keys

RFID Technology Benefits

3. RFID tags have the following advantages over traditional barcodes (select
all that apply):
( ) RFID tags can be reused
( ) RFID tags are resistant to harsh conditions
( ) RFID tags do not require line of sight
( ) all of the above

Tagging Goods
4. Tagging can be done at the item, case or pallet level.
( ) True
( ) False

Activate Tagging
5. What document shows the warehouse worker which items need tagging?

1. Pick list

2. Shipment list

3. Sales order

4. Purchase order

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Quick Interaction: Lessons Learned

Take a moment and write down three key points you have learned from this
chapter:

1.

2.

3.

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Solutions
Test Your Knowledge

How RFID Works

1. What are the main components of RFID technology? (select all that apply)
( ) Tags
( ) Readers
( ) Middleware

2. What type of tags can be used in Microsoft Dynamics AX 2009within RFID

system?
( ) SGIN
( ) EPC numbering
( ) Vehicle Identification Number
( ) EAN.UCC System Keys

RFID Technology Benefits

3. RFID tags have the following advantages over traditional barcodes (select
all that apply):
( ) RFID tags can be reused
( ) RFID tags are resistant to harsh conditions
( ) RFID tags do not require line of sight
( ) all of the above

Tagging Goods
4. Tagging can be done at the item, case or pallet level.
( ) True
( ) False

Activate Tagging
5. What document shows the warehouse worker which items need tagging?
( ) Pick list
( ) Shipment list
( ) Sales order
( ) Purchase order

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