The Intelligent Product Driven Supply Chain

Establishing connectivity of products with real-time information about themselves can at one level provide accurate data, and at another, allow products to assess and influence their own destiny. In this way, the specification for an intelligent product is being built – one whose information content is permanently bound to its material content. This paper explores the impact of such development on supply chains, contrasting between simple and complex product supply chains. The Auto-ID project is on track to enable such connectivity between products and information using a single, open-standard, data repository for storage and retrieval of product information. The potential impact on the design and management of supply chains is immense. This paper provides an introduction to of some of these changes, demonstrating that by enabling intelligent products, Auto ID systems will be instrumental in driving future supply chains. The paper also identifies specific application areas for this technology in the product supply chain.

Supply chains are often beset with problems caused by the mismatch between material and information flow. The lack of timely and accurate information relating to order status, inventory levels or delivery times for example can introduce uncertainty and variability in a supply chain (Lee et al, 1997). One approach which is helping to alleviate such issues is the developments being driven by the Auto-ID Centre in establishing direct network connectivity between a physical product and its supporting information. The Auto-ID Centre is developing standards and network infrastructure enabling tagged products to be connected to real time product information over the Internet. Establishing such connectivity, and by coupling this information into existing business information systems, can immediately help to address inventory management issues such as stock outs, by reducing the amount of uncertainty around product and resource availability. However, equally or perhaps more importantly, Auto ID systems provide the basic infrastructure for reconsideration and possibly alterations of the supply chain. This is based on the observation that a physical product connected to a network which itself links different aspects of the supply chain can potentially assess and influence its own functions. That is, through this network connection, a product (or a set of products) can interact indirectly with those operations that they come in contact with. We refer in this document to such products being ‘intelligent’ in a loose sense and in this paper we introduce the concept of an int e l l igent produc t and consider its potential impact on the entire supply chain – i.e. the life-cycle of the product. In Section 2, we define and distinguish the differences between simple and complex product, highlighting briefly important issues and distinctions in their supply chains. The concept of an intelligent product is then proposed in Section 3, and it is argued that developments in the Auto-ID field and in the field of so called software agents provide a means for constructing intelligent products. Se c t ions 4 then examinethetype s ofsupply cha in functionalities and applications that might be developed using intelligent products as a basis. In this way, a range of potential application areas for Auto ID systems in the product supply chain are identified. A more strategic view as a result of such Auto-ID enabled applications is discussed in Section 5 with the aim of reconsidering the conventional supply chain.

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