Research on global supply chain transparency based on RFID and UCR

　　1 Introduction

　　The supply chain is a functional network structure model that connects suppliers, manufacturers, distributors, retailers, and end users around the core enterprise through the control of information flow, logistics, and capital flow, starting from the purchase of raw materials, making intermediate products and final products, and finally delivering products to consumers through the sales network. The spirit of supply chain and logistics management is to optimize inventory management, that is, to effectively meet customer needs and achieve corporate goals at the lowest cost and risk.

　　Supply chain and logistics management at the strategic level is to consider the overall operation mode and global layout, such as changing the production mode to build to order (BTO) and adopting the vendor managed inventory (VMI) model of setting up a storage center at the client; at the operational level, the optimization of supply chain and logistics decisions can be achieved through two parts: supply chain planning (SCP) from the perspective of inventory management and supply chain execution (SCE) from the perspective of transportation management. The parallel use of these operation modes greatly reduces the possible inventory of planned production, thereby improving the efficiency of supply chain operations.

　　However, when faced with a transnational or even global logistics environment, simple planning and planning inventory management faces severe challenges. Transnational transportation companies must face changes and risks that may arise in the process of freight forwarding, customs, sea and air transportation, such as high inventory during logistics lead time, out-of-stock goods that are not delivered on time, and possible excess inventory. As shown in Figure 1, assuming that the process and time that goods may go through from Asia to the North American market are considered, the maximum and minimum required lead time for the entire logistics may differ by 17 days. In this case, companies may have to hold more than two weeks of inventory to cope with possible changes. To solve the above problems, global supply chain transparency at the transportation management level is a possible solution.

　　2 Current status and existing problems of global supply chain

　　The so-called global supply chain transparency is to establish a system in an electronic way, connecting the global sea, land and air transportation, customs clearance, warehousing and other transportation processes from order to delivery of goods to customers, so as to understand the transportation status of goods in real time, and then effectively control the entire logistics process and actively manage it, reduce the inventory days and delayed arrival losses in the logistics process, and avoid the demand and cost of urgent delivery. Global supply chain transparency can be divided into two parts: one is the active management mechanism; the other is the real-time update of cargo status and various document information, including purchase orders, sales orders, warehouse entry orders, booking orders, bills of lading, etc.

　　The proactive management mechanism is a proactive management mechanism that cooperates with the inventory management plan to deal with exceptional situations. For example, the planned time and tolerance range for each transportation stage are set in advance. When the actual transportation/shipping time exceeds the tolerance range, an emergency response is made and necessary measures are taken, such as emergency delivery and transfer of goods. Only by relying on the operation of the proactive management mechanism can the real-time transportation information be implemented at the management level and inventory management be carried out effectively.

　　The purpose of supply chain management is to obtain products at any time, any place, at the lowest price and the fastest speed. In order to meet this demand, enterprises have to adjust the logistics operation process driven by customer service and implement a supply chain operation mechanism that collaborates with business partners (suppliers, customers, etc.).

　　Nowadays, international trade continues to develop and expand, and there are many participants in the transportation of goods, including sea, land, air, and customs agents, which makes the transportation process of goods complicated, trade procedures become cumbersome, and goods inspection is inconvenient, which has a certain impact on the security of the supply chain.

　　In international trade, some countries' shippers and shipping companies still use fax, electronic information or written transmission of customs documents. This affects the customs clearance speed of goods, greatly reduces the efficiency of cargo transportation, and increases the cost of transportation. At the same time, there are also some security risks, especially the transmission of documents in written form, which involves personnel operation errors and security issues during the transmission of documents. Some advanced countries have developed electronic customs clearance systems, but the formats are different, such as original forms, UN/CEFACT information, etc. If the whereabouts of the goods are unknown, due to different form codes and formats in different countries, it is difficult to track the goods, which brings certain difficulties to customs audits and greatly reduces security.

　　3 Technical keys to global supply chain transparency

　　Radio Frequency Identification (RFID) is a type of automatic identification technology, which uses non-contact two-way data communication to identify targets through radio frequency. Compared with traditional identification methods, RFID technology can complete information input and processing without direct contact, optical visibility, or human intervention, and is easy and fast to operate. It can be widely used in production, logistics, transportation, medical treatment, anti-counterfeiting, tracking, equipment and asset management, and other application fields that require data collection and processing, and is considered to be a future substitute for barcodes.

　　The development of RFID technology can be traced back to the Second World War, when it was used to identify friend or foe in air combat operations. Historically, RFID is not a brand new technology. From a classification point of view, after years of development, RFID technology below 13.56MHz has become relatively mature. At present, the industry is most concerned about RFID technology in the medium and high frequency bands, especially the long-distance RFID in the 860MHz~960MHz (UHF band), which has the fastest development; while the 2.45GHz and 5.8GHz bands are still in the exploratory stage due to product congestion.

　　The basic RFID system consists of three parts:

　　Electronic tag: It is composed of coupling elements and chips. Each tag has a unique electronic code and is attached to an object to identify the target object.

　　Reader/writer: It has the function of reading and writing tag information and can be designed as a handheld or fixed device. It can realize data reading, writing, displaying and processing functions independently, or it can be combined with a computer or other system to complete the operation of the RFID tag.

　　Line: transmits radio frequency signals between tags and readers. Some systems also connect to external computers through the RS232 or RS485 interface of the reader to exchange data.

　　The structure of the RFID system is shown in Figure 2. The RFID tag and the reader are coupled to each other through a coupling element to achieve spatial (non-contact) coupling of RFID signals. In the coupling channel, energy transfer and data exchange are achieved based on the timing relationship.

　　RFID technology uses wireless radio frequency to perform non-contact two-way data transmission between the reader and the radio frequency card to achieve the purpose of target identification and data exchange. Compared with traditional barcodes, magnetic cards and IC cards, radio frequency identification has the characteristics of non-contact, fast reading and writing speed, no wear, no environmental influence, long life, easy to use, and anti-collision function, and can process multiple electronic tags at the same time.

　　At present, different products that meet different standards are defined within the working frequency range of RFID products, and RFID products in different frequency bands will have different characteristics and different typical applications. Generally, low frequency (< 135MHz) is mainly used in applications such as automobile anti-theft systems and animal husbandry management. High frequency (13.56MHz) is mainly used in applications such as library management, drug anti-counterfeiting, and one-card systems. Ultra-high frequency (860MHz~960MHz) is mainly used in applications such as supply chain management and highway toll collection.

　　4. Standardization of Information

　　The WTO's opening of liberalization entrances promotes the creation and development of markets and regional free trade zones, accelerating the pace of globalization. In order to implement information chains that are compatible with both trading parties and customs, it is necessary to develop a set of methods that meet global standards. It must replace the existing numbers in the international supply chain as the entry key for common data, seamlessly connecting suppliers, transporters, freight forwarders and importers to physical logistics. [page]

　　UCR (The Unique Consignment Reference Number) is the unique tracking number for goods. When the importer and the exporter formally sign a sales contract, they first agree on the UCR number, and the batch of goods is given a set of numbers that can distinguish them. The number is affixed to the goods in the form of a barcode. No matter how many intermediaries or government agencies the goods pass through on the way, this number is always closely integrated with the transportation process of the batch of goods until the foreign importer completes the customs clearance procedures and receives the goods. In other words, UCR is a set of codes that connect the entire transportation chain from the sender to the destination. The users involved include importers, exporters, intermediaries (such as banks, insurance companies, credit reporting companies, transportation companies, warehousing companies, cargo contractors, domestic customs brokers), etc., and relevant government agencies (such as customs, trade agencies, review agencies, and quarantine agencies), etc. Customs is not a single user unit.

　　The UCR code is composed of 35 letters and numbers. As shown in Figure 3, the first character is used to identify the specific year of the decade, represented by the numbers 0-9. The next two characters represent the country code to identify the country where the UCR is issued. The remaining 32 characters include a company identifier for the official public country, as well as a continuous unique reference code for internal use by the issuer.

　　However, at present, only ISO15459-1 has defined and explained the UCR code. The RFID-related organization EPCglobal is negotiating with the WCO whether it can be integrated with the SSCC (Serial Shipping Container Code) code.

　　5. Realization of global supply chain transparency

　　The key to achieving transparency in the global supply chain is the standardization of information. Only standardized information can connect different freight forwarders, transporters, and warehouse operators around the world. The unique tracking number of goods is a unique set of numbers assigned to the goods before they are transported. No matter how many intermediaries or government agencies they pass through during transportation, this number will always be closely linked to the goods until the foreign importer completes customs clearance procedures and receives the goods. In fact, UCR has achieved the standardization of cargo information here, facilitating the transportation of goods, making customs clearance very simple and fast, and at the same time, the goods can be tracked, and the safety of the goods is further guaranteed.

　　The basic operation mode of UCR is shown in the figure below. The business units involved in the transportation of goods are: traders, freight forwarders, transporters and customs. The application of UCR can also be divided into single transportation, cargo consolidation transportation and cargo split transportation. Single transportation is to assign a UCR number to a whole batch of goods and transport the goods to the destination through one mode of transportation. Cargo consolidation transportation refers to collecting goods from different shippers to the same place, then assembling them into batches or boxes and transporting them through one mode of transportation. Cargo split transportation means that the whole batch of goods is assigned the same UCR number and transported to different destinations using different means of transportation.

　　Normally the same UCR number is used to transport goods from the origin to the destination, but there are exceptions, such as when the goods are resold, the UCR number will change. In this case, the history of the UCR number should be recorded in order to track the goods.

　　RFID technology is a crucial technology for achieving global supply chain transparency. Unlike contact identification technology, the transponder and reader of the RFID system can complete identification without contact. Compared with barcode technology, the identification distance of RFID technology is farther, so it can be used in a wide range of occasions. With the maturity of large-scale integrated circuit technology, the size of the RFID system has been greatly reduced, and it has now entered the initial stage of practical application.

　　The RFID system provides a detailed and unique perspective of the supply chain by providing each item with a separate identification and storage and transportation history, achieving full tracking of goods and transparency of the supply chain. The RFID system does not use a central computer to record the location of each pallet or item. It can clearly know the location, identity, storage and transportation history, destination, expiration date and other useful information of the cargo boxes on the pallet or even the individual goods. The RFID system can provide such detailed data for the actual goods in the supply chain and establish a physical connection between the goods and their complete identity, so that users can easily access this completely reliable product information.

　　Figure 5 is a basic view of global supply chain transparency. When goods leave the factory for transportation or customs clearance, they are given UCR numbers and RFID tags. The goods are monitored and tracked through the EPC global network, making the entire process of goods transportation visible.

　　UCR is a tool to promote the security of international trade, while RFID technology is a powerful tool to make the flow of goods transparent and convenient. The integration of the two can build a global safe and convenient international trade environment.

　　6 Conclusion

　　RFID technology is a revolutionary technology. Although it has only been applied to the field of supply chain management in recent years, it has already shown its role that cannot be underestimated. It provides technical standards for the safe transportation of goods. UCR provides a unique number for each piece of goods. In this way, if the goods are lost during transportation or shipped to the wrong destination, we can find the goods through UCR and ship them to the correct location to prevent the loss of goods. The combination of these two technologies has made the global supply chain transparent and convenient, and provided a safe environment for future international trade.

References:

[1]. RS232 datasheet http://www.dzsc.com/datasheet/RS232_585128.html.
[2]. RS485 datasheet http://www.dzsc.com/datasheet/RS485_585289.html.
[3]. EPC datasheet http://www.dzsc.com/datasheet/EPC_2343714.html.