Information has value! However, it is difficult to measure the value of information which is provided through the EPCglobal architecture. How do you calculate the value of supply chain visibility for example? Surely there are numerous calculations, but these are mostly based on “educated guessing”. Additionally the value of information is spread across multiple stakeholders, but costs and benefits are not evenly distributed. Mandating has failed in most industries as a means to push information suppliers into using RFID and the EPCglobal architecture. Alternative Cost Benefit Sharing approaches are limited in their scalability and fail to quantify the real value of RFID and the EPCglobal architecture, as there are many intangible benefits that are difficult to measure.
There is an alternative approach though to quantify the value of IT-investments apart from cost- or benefit-based value estimations – a market driven value calculation that uses the sales value of information as a definite financial measure. Considering the low individual value of product information, such as a ‘best before date’, there have to be simple technical means to measure and aggregate these micro values to a billable amount. This leads to certain paradigm shifts:
Figure 1: Paradigm shifts from information exchange to information trade
In a prototypic installation Fosstrak and jBilling have been used to connect information queries and information prices, thus providing a technical infrastructure to evaluate and bill product-related information. jBilling is an open source billing solution that is used, for example, in telecommunication industries.
And this is what it looks like. First a combined login procedure for Fosstrak and jBilling has been developed.
Figure 2: Integrated login procedure for Fosstrak and jBilling (Dieter Uckelmann, Quantifying the Value of RFID and the EPCglobal Architecture Framework in Logistics. Berlin, Germany: Springer 2012, p. 120)
The model of a billing-enabled EPCglobal Architecture has been verified through a lab-based scenario for the beverage industry.
Figure 3: Premium query and acceptance confirmation (Dieter Uckelmann, Quantifying the Value of RFID and the EPCglobal Architecture Framework in Logistics. Berlin, Germany: Springer 2012, p. 131)
If for example the wholesaler queries the EPCIS of the bottler, some of the retrived information (e.g. sales data) has to be paid for as shown in the figure above. These values can be charged individually or they can be combined with other payments such as deposits in the beverage scenario.
Figure 4: Example list of orders as shown in jBilling (Dieter Uckelmann, Quantifying the Value of RFID and the EPCglobal Architecture Framework in Logistics. Berlin, Germany: Springer 2012, p. 132)
If the willingness to pay for information increases, the suggested solution provides improved measurability, quantification and optimisation of information value, thus enabling new business models based on product- and supply network-related information sales in the EPCglobal architecture. In the long run this would allow an (r-) evolutionary process change from an “information exchange model” to an “information trade model”.
As mentioned this solution has only been used in a prototypic scenario as part of a dissertation thesis, so there is no source code available for the connection between Fosstrak and jBilling. If your interested in further information, please contact Dieter Uckelmann at HFT Stuttgart.
[…] you wonder what my dissertation thesis was about, you may want to read my blog contribution to the Fosstrak Blog. If you want to read even more … here is a reference to the corresponding Springer and Amazon […]