An overview of EPC technology Frederic Thiesse Institute of Technology Management (ITEM-HSG), University of St Gallen, St Gallen, Switzerland, and

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1 Feature An overview of EPC technology Frederic Thiesse Institute of Technology Management (ITEM-HSG), University of St Gallen, St Gallen, Switzerland, and Florian Michahelles Department of Management, Technology and Economics (D-MTEC), ETH Zurich, Zurich, Switzerland Abstract Purpose This paper aims to provide an overview of the electronic product code (EPC) and related RFID standards that are currently being rolled out in the retail industry Design/methodology/approach It considers the EPC numbering schemes, air interface protocols, middleware aspects as well as scenarios for practical use Findings Identifies possibilities and limitations of EPC standards, the current status of technology adoption and future fields of application Originality/value Of interest to those concerned with RFID technology selection and infrastructure development Keywords Electronic equipment and components, Protocols, Radio frequencies Paper type General review Introduction Today s fast-moving consumer goods (FMCG) supply chain still faces a number of challenges in the context of item identification and process visibility Despite the introduction of the barcode and related technologies many years ago as well as industry initiatives such as efficient consumer response, the retail industry has not managed to eliminate several issues Typical examples of prevailing problems include out-of-stocks, shrinkage throughout the entire supply chain, invoice inaccuracy, unsaleable products and inventory inaccuracy Traditional manual data collection technologies have proven to be not efficient enough in terms of costs, data quality and flexibility to solve these problems in their entirety For these reasons, automatic identification technologies such as RFID are expected to further improve physical process efficiency and to positively address some of the primary causes that lie beyond the above-mentioned issues (Chappell et al, 2002) While RFID is actually a rather old technology, the current interest in its practical use was mainly driven by the MIT s Auto-ID Center, founded in 1999, and its commercial successor EPCglobal, who have been developing a family of standards based on the so-called electronic product code (EPC) The idea behind EPC technology is to create an internet of things that consists of various hard and software components, including low-cost, passive RFID tags that could be used to equip nearly any kind The current issue and full text archive of this journal is available at wwwemeraldinsightcom/ htm 26/2 (2006) q Emerald Group Publishing Limited [ISSN ] [DOI / ] of physical object and thus link it directly to corporate information systems (Sarma et al, 2001) In the few years since its development, EPC technology has been adopted by a broad range of industries The large retail companies were among the first to start their roll-outs Metro Group, for instance, expects to receive RFID-tagged shipments from 300 suppliers, covering percent of sales by the end of 2006 Other industries, eg pharmaceuticals and aerospace, and the US Department of Defense have announced to use EPC standards in their RFID projects, too Against this background, this paper provides an overview of EPC standards and the current status of adoption in the industry Historical background In 1999, the Auto-ID Center at MIT initiated a research programme directed towards the development of RFID standards in order to foster technology adoption The project s vision was the creation of an internet of things, ie a tight coupling of physical items and digital information flows based on inexpensive RFID tags (Brock, 2001) The use of RFID technology on a broad scale for automatic identification was regarded as a major step towards improved efficiency in various business processes of supply chain management, manufacturing, maintenance and many more The development of appropriate standards for RFID transponders, readers and management information systems was conducted by the Auto-ID Center in close cooperation with more than 100 industrial partners including both technology users and vendors Most user organisations had a retail background, eg Wal-Mart, Metro, Gillette and Procter & Gamble While the project had its roots at the MIT, other research institutions from Europe, Asia and Australia joined the community of Auto-ID Labs (available at: www autoidlabsorg) in the following years 101

2 In October 2003, the Auto-ID Center completed its work and transferred its technology to EPCglobal Inc (available at: www epcglobalincorg), which since then administers and advances EPC standards with a clear business-oriented focus EPCglobal was established as a joint venture by two uniform standard numbering system authorities, the uniform code council (UCC) and the European article numbering association (EAN) EPCglobal became operational in July 2003 The organisation and its member companies operate various working groups which discuss technical requirements, develop business cases, and form the basis for the network in order to establish standards and promote the worldwide introduction of EPC (Figure 1) The business action group (BAG) develops business scenarios and use cases for diverse industries with regard to managing the supply chain more efficiently There are currently two BAGs, FMCG BAG and healthcare and life sciences (HLS BAG) The hardware action group specifies the key hardware components of the EPC network including tags and readers The software action group defines software interface and other standards within the EPC network Each action group is governed by a steering committee The electronic product code Item identification through the use of numbering schemes has been established worldwide, mostly because of the introduction of barcode standards that serve as the foundation for optical scanning technology Nowadays, nearly all products sold in supermarkets and department stores are equipped with a unique GS1 (formerly known as EAN/UCC) identification number which contains information on its manufacturer and product type encoded in a one-dimensional barcode While barcode technology was originally developed in the 1970s for the retail industry, it became a standard in many other branches of trade as well, eg in the automotive and the aerospace industry, albeit many of them used the barcode as a vehicle for encoding proprietary data formats The EPC was conceived as a novel numbering scheme to identify all kinds of physical objects, not just traded goods The main requirement to the concept was that the EPC code must be sufficiently large to enumerate all objects, and to accommodate all current and future naming methods In contrast to GS1 codes, the EPC was developed for unique identification on the item-level, ie each EPC-equipped object carries its own code that distinguishes it from other objects of the same type For this purpose, the EPC is divided into hierarchically organised sections Its total length is 96 b including an 8 b header for meta-data that declares the EPC type The original EPC Type 1 contains three subsections, which provide information on the EPC manager (ie the manufacturer), the EPC object class (ie the product type) and a serial number (Figure 2) It is important to note that the EPC does not identify stock-keeping units only but pallets, containers and other logistical units Since, the EPC was not made to replace but to integrate existing numbering schemes, different headers can be used for different schemes, eg the binary header sequence indicates that following sections contain a UID number as it is used by the US DoD Another example is the global trade identification number that is widely used in the retail industry (Figure 3) EPC tag protocols The Auto-ID Center s roadmap for tag development divided transponder types in a number of classes that differ in functionality Class 0, for instance, denotes tags that do not carry any data beyond its EPC number which is determined by the manufacturer In contrast to that, Class 1 transponders allow for one-time-programmability of the EPC data Further classes for active tags and tags with integrated sensors were part of the roadmap, too, but have not been specified yet Class 4, for example, denotes relay tags that include reader functionalities in order to communicate with other tags Since, the Auto-ID Center had its focus on supply chain applications that require read ranges of more than 1 m, the project worked on tag classes for the HF and the UHF frequency band By the end of 2003, three protocols had been specified: UHF Class 0 (Auto-ID Center, 2003a), UHF Class 1 (Auto-ID Center, 2003b) and HF Class 1 (Auto-ID Center, 2003c) The two UHF protocols are so-called reader-talks-first protocols that operate in the reader s far field In both cases, Figure 2 Structure of the EPC type 1 Figure 1 EPCglobal s organisational structure Figure 3 EPC-encoded serialized general trade item number 102

3 communication between tags and readers operates in halfduplex mode Singulation by which an RFID reader identifies a tag with a specific serial number from a number of tags in its field is done via a tree-walking algorithm In contrast to that, the HF protocol relies upon inductive coupling in the reader s near field in order to supply transponders with energy Instead of tree-walking, a modified ALOHA protocol is used for singulation In the course of transfer to EPCglobal, the works on HF standards were ceased in favour of the UHF band that seemed more appropriate for tagging logistical units Driven by the needs of early adopters of EPC technologies a second generation of RFID specification for the UHF band was released in December 2004 The so-called Gen 2 protocol (ie ECP Class 1 generation 2) was designed in order to optimize performance in different regulatory environments around the world (EPCglobal, 2005) The Gen 2 standard offers a variety of improvements over its predecessors: Dense reader mode for managing a large number of readers in a confined space Secure read-write memory, ie memory banks can be locked/unlocked Dual signalling modes that allow for both fast reads and slow reads in noisy environments Q-algorithm for singulation of tags with identical EPC codes Parallel sessions that allow for tags to interact with different readers simultaneously Improved data transfer rates of up to 640 kb/s Avoiding ghost reads, ie a tag has to pass five tests until recognized as a valid tag Tag select command that enables the selection of tags before inventorying them Kill command for permanent tag deactivation in order to protect consumer privacy AB symmetry that avoids the problem of putting tags to sleep and waking up Longer passwords, ie 32 b passwords for tag deactivation and memory access Though Gen 2 features significant improvements, one remaining question is still the price end-users will have to pay for all the functionality and extra features of the protocol A Gen 2 microchip would have about 40,000 transistors, compared to only 12,000 on a microchip used in a Gen 1 Class 1 EPC tag Therefore, ICs for Gen 2, if made with the same fabrication processes used for Gen 1 tags, would be nearly twice as large Hardware providers hope to compensate this drawback in the future by further optimizing fabrication processes external behaviour of middleware components and leave implementation details to software vendors Furthermore, an XML-based language for the description of EPC-tagged physical objects was developed, the so-called physical markup language (PML) PML was conceived to describe various attributes of objects, processes and environments, eg information on ownerships or locations The first PML specification defined a core set of elements that allow for data exchange between RFID readers and other sensors within the EPC network An example of a PML message is shown in Figure 4 The PML development process was ceased in 2003 its results, however, were later integrated into the specification of the EPC reader interface As mentioned before, current standardisation efforts have their focus on the specification of protocols and APIs rather than software implementations For this reason, the work of EPCglobal s software-related action groups now concentrates on the following three topics: 1 The EPC reader protocol defines how an EPC-compliant RFID reader should communicate with its clients, ie it defines commands, their parameters and return values for different tag search and access operations based on a TCP connection 2 The application level events interface specification forms an additional abstraction layer that encapsulates raw reader functionality by grouping readers (so-called logical readers ) and aggregating tag reads to more complex statements on events in the physical world 3 The reader management protocol provides a collection of commands and constructs that allow for efficient administration of large RFID hardware infrastructures In the meantime, several software vendors and system integrators have released EPC-compliant middleware tools that allow for integrating technical RFID infrastructures with other applications An example for this product category is SAP s auto-id infrastructure which connects to ERP systems through the generic middleware component SAP XI EPC network architecture While the before-mentioned standards enable integration of RFID with other company-internal information systems, the EPC network is a framework that allows for sharing RFID information with partners along the entire supply chain The technical development of the necessary infrastructure components is being done on behalf of EPCglobal by USbased technology provider Verisign Inc, the company that already operates large parts of the internet s infrastructure Figure 4 PML message on the detection of two EPC tags System integration On top of its EPC tag standards, the Auto-ID Center also developed a first prototype of an RFID middleware that connects RFID hardware to existing information systems, eg warehouse management systems and others In this scenario, the middleware is responsible for data collection, filtering, aggregation and transformation into other data formats In the course of transforming the Auto-ID Center into ECPglobal, this idea had to be given up in favour of the development of open specifications that only describe the 103

4 As shown in Figure 5, the EPC network consists of various elements including EPC tags, readers and a middleware layer that abstracts from EPC reader hardware and manages realtime read events and information Furthermore, it provides alerts, and manages the basic read information for communication with other information systems, eg systems for warehouse management or supply chain planning In order to share EPC information with other organisations, a company has to implement an EPC information service (EPCIS) that encapsulates all access operations to the underlying RFID infrastructure The EPCIS standard enables users to capture, secure and access EPC-related data via a uniform interface The link between an object s EPC number and information that is distributed across the network is established by two additional services, the object name service (ONS) and the EPC discovery service The ONS resembles in many ways the classical domain name service in the internet As such, for each EPC code, the ONS returns a network location specifying where information about that objects resides The ONS consists of two layers: the first layer, called the root ONS, is the authoritative directory of manufacturers whose products may have information on the EPC network The second layer, called the local ONS, is the directory of products for that particular manufacturer It handles all queries directed to that manufacturer Operationally, the ONS resolver first looks up the manufacturer in the root ONS, and then receives the network location of the local ONS Then, the local ONS provides the location of information resources for that product, including EPCIS, discovery services, ERP systems, etc In contrast to that, the discovery service is a suite of services that enables users to find data related to a specific EPC and to request access to that data This data may be stored among many different trading partners, each of which may record state information on that specific EPC as the product moves along the supply chain The discovery service acts as the registry of every EPCIS that holds information about that specific instance Whenever users query track-and-trace information for an item, the discovery service returns a list of EPCIS instances that contain that information In a next step, each of these EPCIS instances can be queried The use of the discovery service allows for collecting all this item information stored in distributed information sources and thus for composing a complete trace history of the item Figure 5 EPC network architecture Application scenarios As mentioned in the beginning, EPC development was mostly driven by retail giants like Wal-Mart and Metro with support from their suppliers who expect the technology to enable a broad range of RFID applications that were not economically feasible in the past (Bose and Pal, 2005) On one hand, RFID could help to make many physical handling activities more efficient than they are today on the basis of the barcode Typical examples are checks for completeness of arriving deliveries where RFID can be used to automatically compare the contents of a pallet with the supplier s EDI-based shipping notice On the other hand, RFID adopters hope to tackle some other issues that the barcode has not addressed at all: Out-of-stock About 3-4 percent of products in a supermarket are not available to its customers, in the case of specially promoted products the figure is even significantly higher Reasons for this problem can sometimes be delayed deliveries and other distortions in the supply chain, but also a lack of visibility of inventories, ie the retailer does not know which items are stored in the supermarket s backroom and which ones are actually available on the shelves Shrinkage Products such as razor blades or ink printer cartridges are among the most frequently stolen goods in European supermarkets Furthermore, particularly highvalue products are often being stolen by employees or somewhere on their way from the manufacturer to the retailer In this case, RFIDcannot necessarily prevent these crimes completely, but, unlike traditional electronic article surveillance mechanisms, the technology can help to find the leaks in a company s supply chain and to identify stolen products when they re-enter the market Tracking and tracing The need to track products along the supply chain arises both from external and companyinternal reasons On one hand, the food industry, for instance, is required to document a product s history in the upstream supply chain due to legal obligations On the other hand, companies from the pharmaceutical industry are highly interested in track and trace solutions in order to get more control over grey markets and illicit trade Anti-counterfeiting The trade in counterfeit products already accounts for 5-7 percent of world trade; the value of counterfeit goods runs into more than e500bn a year In addition to the primary damage resulting from loss of sales for the original brands, there can be high risks in the area of medicines and aircraft parts, for example, through the use of poor quality imitations While traditional protection technologies (eg holograms, chemical taggants) are increasingly being copied by product pirates, the combination of an EPC number and further digital security mechanisms might provide an additional safety level that makes it easier to distinguish original products from fakes Collaborative planning Coordination and information exchange among players in a supply chain has become an important means to reduce inventory levels and to guarantee timely fulfilment of customer orders The more information becomes available on customer demand and products in the chain, the better retailers and suppliers can plan orders and deliveries and thus reduce logistics costs In this context, automatic data collection from RFID systems has the potential to improve current SCM 104

5 practices through more fine-grained and precise data for planning and control purposes The large retailers roll-out projects are currently limited to logistical units (ie cases and pallets) using EPC Gen 2 transponders The focus of these projects is on handling efficiency, out-of-stock and shrinkage Current plans from Metro Group, for instance, foresee to do the next step towards item-level tagging not before 2007 Outlook An overview of EPC technology While ten years ago, the 1 US$ tag was regarded as a major landmark for widespread commercial use of RFID technology (Byfield, 1996), it is now the 5 tag that is expected to keep this promise (Sarma, 2001) One essential prerequisite to achieve this goal is standardisation of hard and software components of an RFID system as the success of the Auto-ID Center has demonstrated In a relatively short period of time, EPC technology has managed to become an internationally accepted standard in the retail industry and beyond Nevertheless, many challenges still lie ahead waiting to be addressed One obstacle on the way to low cost tags is still a lack of volume Volumes in the billions of RFID tags are required to make the microchip in an RFID tag cheap The assembly of the tiny RFID microchip with the larger tag antenna remains another challenge A state of the art RFID microchip is less than 1 mm 2 in size and thus at least two orders of magnitude smaller than traditional high volume microchips such as CPUs or memory chips, which makes the assembly process non-trivial A number of companies have invested in producing mass assembly inexpensive tags, but none of the assembly technologies are proven today given the relatively small volume of tags sold Another obstacle obstructing the wide-spread adoption of long-range RFID operating at UHF frequencies is the problem of low read rates in challenging environments meaning tags that are in the range of the reader are not successfully detected, eg in the vicinity of metallic objects and organic materials At UHF frequencies organic materials absorb the power radiated by the reader, while metallic objects reflect the incident electromagnetic wave In both cases this can lead to a failure to power a tag and thus a failed detection Last but not least, a completely different challenge is the question of technology acceptance and risk perception of RFID and unique item identification The intended deployment of RFID-based tracking solutions intoday s retail environments epitomises for some the dangers of an Orwellian future: unnoticed by consumers, embedded microchips in our clothes and groceries might unknowingly be triggered to reply with their EPC, potentially allowing for a fine-grained yet unobtrusive surveillance mechanism that would pervade large parts of our lives References Auto-ID Center (2003a), 900 MHz Class 0 radio frequency (RF) identification tag specification, Auto-ID Center draft, MIT, Cambridge, MA Auto-ID Center (2003b), 1356 MHz ISM band Class 1 radio frequency (RF) identification tag interface specification, Auto-ID Center Technical Report TR-011, MIT, Cambridge, MA Auto-ID Center (2003c), 860 MHz-930 MHz Class 1 radio frequency (RF) identification tag radio frequency & logical communication interface specification, Auto-ID Center Technical Report TR-007, MIT, Cambridge, MA Bose, I and Pal, R (2005), Auto-ID: managing anything, anywhere, anytime in the supply chain, Communications of the ACM, Vol 48 No 8, pp Brock, D (2001), The electronic product code (EPC): a naming scheme for physical objects, Auto-ID Center White Paper WH-002, MIT, Cambridge, MA Byfield, I (1996), Developments in RFID,, Vol 16 No 4, pp 4-5 Chappell, G, Durdan, D, Gilbert, G, Ginsburg, L, Smith, J and Tobolski, J (2002), Auto-ID on delivery: the value of auto-id technology in the retail supply chain, Auto-ID Center White Paper BC-004, MIT, Cambridge, MA EPCglobal (2005), Class 1 Generation 2 UHF Air Interface Protocol Standard Version 109, EPCglobal Inc, Lawrenceville, NJ Sarma, S (2001), Towards the 5 tag, Auto-ID Center White Paper WH-006, MIT, Cambridge, MA Sarma, S, Brock, D and Engels, D (2001), Radio frequency identification and the electronic product code, IEEE Micro, Vol 21 No 6, pp 50-4 Corresponding author Frederic Thiesse can be contacted at: fredericthiesse@ unisgch To purchase reprints of this article please reprints@emeraldinsightcom Or visit our web site for further details: wwwemeraldinsightcom/reprints 105