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DO INTELLIGENT OBJECTS AUTOMATICALLY LEAD TO INTELLIGENT LOGISTICS PROCESSES?Gaby NeumannOtto-von-Guericke University of MagdeburgP.O. Box 4120, D-39016 Magdeburg, GermanyE-mail: Gaby.Neumann@mb.uni-magdeburg.deKEYWORDSLogistics, logistics processes, intelligent logisticsobjects, identification technology, RFID.ABSTRACTRadio Frequency Identification (RFID) technology isone of the key drivers for changes in logistics. Attachinginformation directly to an object allows thinking aboutautonomous processes and decentralized architectures ofprocess control in logistics systems and supply chains.But apart from the various needs for technologicalimprovements, standardization of information and dataexchange, or cost reduction with transponders andreaders, it is also necessary to discuss about the impact ofthose technological opportunities on the design andperformance of logistics processes.The paper addresses questions on what does processintelligence of logistics objects mean, how much ofintelligence an object could have, and how processcontrol and management for those intelligent objectsmight look like. A variety of approaches to answer thesequestions from current research in the field but also fromother disciplines like manufacturing design or networkanalysis is introduced and discussed with regard to theirapplicability.Conclusions are drawn on modifications in logisticsprocess structuring and management, but also on chancesand limitations the application of RFID in logistics andsupply chain management might have.RFID – DRIVER FOR CHANGES IN LOGISTICSIn the last three decades logistics has changed itsfocus from the previously functionally orientedperspective on logistics operations for bridging space andtime to the today’s management-oriented concept of aneconomic, holistic design of all object flows in processchains and supply networks.This development has always also been initiated andenabled by the technological progress in material flow,automation and control technologies, or information andcommunication technologies. New technologicalopportunities did not only lead to local improvementsand increased efficiency in particular logistics operations,but even more to new kinds of logistics processescharacterized by a growing level of integration ofmaterial and information flows as well as fundamentallychanged business processes, too.The chain of drivers towards these changes hasrecently extended by Radio Frequency Identification(RFID) technology.RFID has already found a number of application areasin logistics. Directly attaching information to articles, forexample, allows building of complex systems for qualityassurance and manufacturing control as they alreadyhave been applied in automotive industries for manyyears. To support Kanban processes in productionmodern RFID systems in the UHF range (865 to 868MHz) are used. The tags attached to Kanban boxes areautomatically read; they initiate to change the status of abox from FULL to EMPTY and with this ensure directsupply.Effects resulting from this may cover reduced stocksand order lead times, optimized material order processesand lower error rates in the production, or transportationprocesses of increased speed and more preciseobservation.Despite its costs, the application of RFID is alreadyeconomically viable in closed-loop logistics with aguaranteed re-use of the expensive transponders.Furthermore, clear advantages of RFID with regard toperformance are given in special applications whereabsolute process security is required.The wide-scale application of product tagging alreadyprotects articles against theft. In future, this is expectedto enable automatic article identification, too. The tradesector already uses RFID in parts of the process chain,namely for logistics and inventory management with theretailers.Especially internationally leading companies likeMETRO Group, Wal-Mart and Tesco play an active rolein rapidly, extensively introducing RFID into the entirebusiness (see Table 1). These activities aim at improvingAnnual Proceedings of Vidzeme University College “ICTE in Regional Development”, 200651