Justin Patton continues his discussion with Mike Graen and explores topics including the evolution and benefits of RFID technology in various industries, emphasizing its role in improving inventory accuracy and management. He highlights the importance of focusing on data handling and cleaning rather than just tag and reader performance.

Patton also mentions the potential of RFID in space operations and the need for standards in this emerging field. He addressed the challenges of inventory accuracy in retail, stressing the importance of serialized inventory and the need for retailers to adapt to this strategy. Patton announces the Auburn RFID Lab's expansion to a new 100,000 sq. ft. facility and plans for major events in 2025, including a supplier summit and a board meeting.

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if you think about all those various verticals, air

traffic, package, QSR, retail, etc, has a lab and you

personally made any different decisions on where you want to

focus priorities from a lab perspective, because you now see

there's some things that we've we do once we can reapply for

different times. Because I think that would be helpful. I think

the biggest value of that is you're getting input from four

different different verticals. You may say, Hey, this is really

something I'm going to focus on, based on the fact that all four

of them need this done.

Yes, I can think of not that exciting base

example, and I can think of something that's a little

better. So like one thing that a lot of people, when they go into

an RFID program, almost everybody right off the gate,

like we we learn about things we can touch and feel. Okay, so

tags and readers. They get tags and readers. Yep, in my mind,

tag and reader performance is solved problem. Like, you know,

there's a lot of tags out there. There's a lot of readers out

there. You decide what kind of environment you want to set up,

and we have, when I say, we mean, the whole industry has

invested in robust ways to benchmark RFID tags and for

performance. And then those playbooks. There's playbooks in

QSR space, there's playbooks in retail. There's playbooks in

aviation. We looked at playbooks and, you know, packaging places

that kind of builds up too. So there's a very known path to

travel to where you can figure out tags and read your

performance. So a lot of times, people get hung up and they

spend a lot of time worrying about, like getting the tag scan

and and what we tell them a lot of times between industries, is,

man, the tags are not your problem. The tag rating is going

to be the easy part what, what is going to be your issue is,

when you get all this data like, you are going to have to clean

that, you're going to have to aggregate that, you're going to

have to figure out how to drive updates with that, like all the

little things that are on Excel a lot of times, or in a

database, or not as easy to touch and feel, that's where the

hard work happens. Like I said in the beginning conversation,

RFID is not a technology problem. RFID is an accounting

system. And I think that's what we're trying to add towards and

and I think, you know, the more exciting version that we just

had a big conversation with exec committee about space, because

we've dabbled with NASA and some of the other space operations

folks, and I'm going to some going to DC this week, and

there's this thing coming up there for there's a lot of

driver in space operations, because you got a lot of

commercial stations that are popping up there. We're talking

about lunar surface now, and pre staging equipment, inventory and

things up there. There is a full supply chain that is about to

open up in orbit and beyond that doesn't exist yet, like right

now, stuff goes up and stuff comes down. Pretty much, you're

seeing some of this in the news with Boeing's at the Starliner

up there. And it connected with the ISS, and they got, you know,

SpaceX is going to bring them back, and they already sent the

module back down and and, you know, 1015, 20 years ago it was

all like it was NASA, or it was Russia or the EU, but now it's

more of a there's an industry there, right? I think what we

have to establish standards and capabilities in that area. So

it's a smaller space. Sounds weird to say it's a smaller

industry, but a lot of things that can be learned there can be

applied to these other industries as well. So the

question was like, How much time do we spend trying to stand up

the news, but to this new industry and support that,

versus focusing on a lot of the terrestrial problems that we

have here now? And how can those things support one another? So

yeah, it's fun to have

fascinating Well, let's head back to retail,

because this is really more of a retail subject. So one of the

things that that we have always talked about is RFID allows you

to know what you have very, very, very quickly. Location,

especially with a handheld device, has always been it's

here somewhere, but who knows where? Unless you're using like,

the Find It application, and I'm not sure if you've ever used the

Find It application native, but it's not very intuitive. You

gotta really know where is it beeping and which way am I

supposed to go? I'd love it for it to go up right to the left.

It's right there, but it doesn't do that. So, so how are

retailers figuring out product location? Obviously, there's

fixed infrastructure solutions that allow you to do that, but

product location like, is it right here, or is it right here

within about feet, a foot or a couple feet away? How are

retailers combating that? Because that seems like the next

big opportunity beyond knowing what you've got, knowing exactly

where it's. Located right?

I think retailers in a warehouse, I mean, WMS

systems will define locations and different put locations and

stuff right, right. So those, I think, are more obvious, I

think, in terms of how they do those in a retail store. One of

the things I like to say is, like, when we started this in

2005 most retailers, I don't think very many at all

differentiated between background and front room

inventory. They just had inventory on system. That was

the whole initial win with these RP systems, is understanding the

difference between back and front and then using that to

drive replenishment. And that gets forgotten along the way.

But it was true that's that's been a change. Now I think

retailers will have front room inventory, backroom inventory.

They'll have to a category or department, like men's or men's

jeans or something like that. And then, if they're really

advanced, then they'll have inventory to a mod or to a

particular rack location or something like that too.

Generally, most retailers that we work with will have front

room, backroom inventory. That's the stuff that's readily

available. Most of them will try to re merchandise stuff back to

the proper category, department, area where it's supposed to be.

But most of them don't have visibility to the individual mod

that's they know we're supposed to be on planning grant, but

like, what's actually there we're we think we might be

close. So I think a lot of what we do because inventory and

accuracy is still rampant, and I think we're forgetting. We

constantly have to remind people, like, how poor their

inventory accuracy is for a lot of these items, you know, just

getting them to the level, to where they trust, the backroom

and the front room inventory is 90% of the battle, because once

they get that down, then re merchandising is something we

can work on, but we can't sell it if we don't have it. So, I

mean, customers can generally find stuff if you can get it at

least close, but if you don't have it at all, they can't buy

it. So whenever it comes to online replenishment or in store

availability, that's that's the key piece, using RFID to get

down to a specific mod. I still think we have a ways to go on

that. I think that that really reply relies very heavily on

that supplier compliance and the execution piece and and also, I

think just to build I've seen overhead systems, I know you two

have to Mike and how we've had retailers will come to us with

three different overhead systems, and they'll say, Okay,

this one can do location accuracy 1.2 meters, and this

one can do location accuracy to 1.8 meters. So 1.2 is better.

And I was like, Alright, so what's your business case? That

1.2 is going to save you more money than 1.8 right? Now, you

don't have a system that can handle either, right? So, like,

you can get people x, y coordinate locations of

inventory all day long. They can't use it. So, you know,

trying to get them to focus on, like, what does it mean? What is

their core inventory accuracy. Do they have their high level

location accuracy, right, so that they're operating based on

and making replenishment and purchasing and sales decisions

based on that, then worry about that final mile merchandise and

piece, because we have seen retailers get obsessed with

merchandise location, and they they lose the forest for the

trees, or, however, the or vice versa, I don't know, like we

lose track of the big picture, because we're so damn worried

about making sure that this pair of pajamas is on this rack

versus that rack over there. Meanwhile, we're sitting on a

55% pi accuracy across the department, and we're losing

sales left and right, but we're throwing a bunch of resources at

trying to figure out how to wand down to one specific area. So I

think, you know, making sure that we're focusing big picture

first and narrowing down into that specific location piece.

Yeah, that what you have is critical. If you don't

have what you have at a very high level, you're in trouble

anyway. But I but I can hear Dr Hargrave in my mind, going,

Yeah, but bopa says I got three here somewhere, but I can't find

them. And I know they're there. I've done a cycle count and

they're there somewhere, but I can't find them for a customer,

I'm disappointing through a bopus. The industry's got to

figure that out, because, from my perspective, if a one won't

get you there, then obviously fixed infrastructure can but

that's extremely expensive, so there's got to be somewhere in

the middle for those people who are trying to get location.

I don't think fixed infrastructure is nearly

as expensive as people think it is. I think what fixed

infrastructure suffers from as a lack of a strong cost model

that's consistent across the board. But you know, people

like, you know how much a handheld cost? I mean, I can go

online and buy handheld for, you know, 1200 $1,500 Yep. Okay. I

know how much it is. I know how to use it. That's a very simple

cost model. How many hours do I spend wandering around with that

thing? It's a lot, right? So you talk about fixed infrastructure.

Well, a lot of people, you. They do it by square foot? Are they

doing it by number of units? So it's the type of inventory, it's

difficult and it's tangible. So you see all that stuff hanging

up there, and you have people say, Oh, it's expensive. It's

like, well, ask how much it costs before you assume it's not

going to work, because if you're going to spend 7500 grand to

light up a store, it's going to last you four or five years,

versus, you know, four or five grand for handhelds. You gotta

think about that labor component piece that comes in there too,

because that's where the true savings of value. And then

you're going to get better reads out of an overhead than you are

in handheld for the most part anyway, just because it's always

on. So,

you know, it's what's what's ironic is one of

the first and you know as well, because you've seen it before.

When you when you take somebody who's literally been counting,

say, I've got a 10,000 square foot, you know, apparel path

right here, and I make somebody count everything, one by one, by

one, by barcode scanning. Then I give them a RFID reader, and

they go, my world just got rocked. This is the best thing

in the world. This is a lifesaver, etc, until they're

about eight months into it and wanting that pad, you know, for

20 minutes a day, or whatever they do, they go, I mean, this

is a lot of work I got to do. Wait a minute, we're not making

you cattle by hand, but suddenly it's a lot of work to be able to

do that. So I think the fixed infrastructure also says, Take

that human element out. The human elements the most

important customer facing you've got. Don't have your humans

collecting data for your systems. Allow them to react to

what the system says, and free them up. Now, some of them

really love doing that kind of stuff, because they really don't

want to work with people. They just want to do this task all

the time. But I look at some of these stores that are trying to

do RFID wanting across a literally 70,000 square foot

space. My gosh, you're gonna have rotator cuff surgery at the

end of that. So,

yeah, I'll quickly forget, you know, I Oh,

you know. So I growing up, I complained they had to go out

there and we put up a little bit of fence. It's hot, man. I gotta

get back in the air conditioning. I need some water.

It's like, man, your granddad to be out there 1213, and hours a

day farming. They had no air conditioning to go back to,

right? So you don't know what hot means. Yeah, you're right.

So you know, but it's still you're dang hot whenever you're

sitting out there in the sun at the time. So I feel like it is.

We do forget the pain of the past a lot of times for these

counts and things. But I do feel like that the we had to focus on

those core fundamental problems. Our inventory accuracy. As an

industry in retail sucks, and it's not getting better. So like

we have to invest in systems that can make that better, and

we cannot take our eye off the our foot off the pedal when it

comes to supplier compliance and execution. And we get chasing

shiny objects over here with some of the location stuff on

some of this projects. And then we also have to make sure that

we are continuously benchmarking against the efficacy. So to your

point, Mike, when you forget about like, why we're doing this

after six months, you can go back and say, well, six months

ago, we weren't selling this stuff because our inventory Act

was here, and here's where we are now. And we kind of have to

continually remind yourself why you're why you're doing it as a

as a retailer, what the value is. Yeah, hey, got

two more quick questions, and then we're going

to kind of wrap this thing up. The one big question is, I'm

seeing more interest than ever, and not even talk about quick

service restaurants or anything like that. I'm seeing more

interest in the RFID in the food space, specifically for two

reasons. Number one, knowing exactly what we have, just like

apparel or electronics or anything like that, but also

using the new tag data standards from GS one to be able to

actually put a date on the when the the product was either

manufactured or put out, etc, for markdown purposes. Are you

seeing the same trend? And so what's, what's, what's the lab

involvement in terms of helping the industry understand that use

case?

I am, and I am seeing that trend a couple

things is good is, like, you know, when we talk about, you

know, different data standards, or for exploration of food and

stuff, like, there we don't need special tags. I mean, you need

most of these tags can handle higher memory data anyway. So it

may not be if you're doing the very high memory stuff, but,

like, you don't have to re engineer the whole performance

perspective of things. A lot of things. A lot of these current

market tags will work just fine. So you don't have to really the

readers aren't going to read things differently, things like

that. The product itself is hard to tag because it's food, and

then the margin in food is limited. So I, you know again, I

think that's gonna be a hard thing for some people get

around. We'll work on it, the data itself. One

more quick at one more quick. Add in apparel,

electronics, etc, the supplier typically pays for the cost of

the tag in food. Typically, that product is potentially going to

be tagged at the store, so the retailer absorbs the cost of the

tag and the labor to collect it, etc. So the business model

becomes much tighter.

It does and it becomes much. Uh, when the

supplier is not paying for it, things are are different story,

right? So when the retailer is paying for it, it's kind of more

elegant, because I guess, in a way, the person who's getting

the value is paying for it. So it makes it much easier to do an

ROI model, because you know how much you're paying to do this,

and you know how much you're making back out of it. So it's

not, it's a more direct conversation, yep. Um, now the

data itself, I'm of two minds on that moving to a higher memory

data standard means that some of these retailers are going to

have two different RFID data standards in the same store. My

gut just screams at me every time we look at this and says we

do not have everything locked down as much as we'd want on the

first one. We do not need to complicate this by adding a

second data standard to the space. However, I do think,

going back to your questions at the beginning, Mike, once we

start looking at date and expiration, we are truly using

the value of the serialized unit level inventory. So we're not

just batching this thing up to on hand updates. We're really

extracting true value on a per unit basis, which I really like.

So I am I don't want to turn this into a VHS beta Mac

situation, you know, with RFID data standards. And I don't

think we'll get there, but I do know that it can be hard to

create systems that can handle both of those on the back end,

because, again, I'm not worried about tags and readers. I'm

worried about the data on the accounting side, on upstream and

making sure that we have structures that can use and just

status is what what I worry about more than anything.

Last question, there's no segue away from this

one. We're just going to lay this one out. The Auburn RFID

lab has a cadence right now of two major events per year, face

to face. One is the supplier Summit, which I think was two

years ago when you first did. It blew away everybody's

expectations in terms of the number of people who came and

what they got out of etc, you and I had this funny bet, which

says, a year later, you didn't think it would be I think it's

the first year, and I think I won that bet. But also so you've

got that event, and in the fall you have a traditional kind of

RFID board meeting for board members. The question becomes, I

guess, do you see these continuing to trend? Do you see

us every spring having a supplier summit and every fall

having a board meeting, either at Auburn or somewhere else? And

if so, is that what people could start counting on for from an

Auburn perspective? Yeah,

I guess two things I can announce here. So

one is, and I think you know this, and some other people that

were getting a new building. So it's not the one behind me in

the background here, but, like, pretty nice built, though, but

though there's a research park here in town, so there's been a

lot of activity. The Board of Trustees just approved that, and

it was announced in the media week or two ago. So the RFID lab

is moving into our own space, which we need because we have.

We're busting those things.

So let's stop right there. What is the square

footage of your current facility?

Square footage of our current is around 13,500

you're moving to the current. The space we're moving to, we're

looking at is around 45,000 square feet, initially, with the

option to add another 60, so moving up to about 100,000

depending on how many industry where it was put in there, and

that's needed, because a lot of this is warehouse focused. Yeah,

and there's

and there's two facts there. Number one, you've

delivered on the expectations of the industry. And number two,

the Auburn Board of Trustees, have a lot of faith in what the

future is for that. I mean, it's only reason to give you the more

space. I think so congratulations to you. It's

tremendous.

Well, that's all of us, man, because, like, you

know, this is something that we've been working on together.

Like, not, we're not selling anything at the lab except the

students, so I think we've been able to help drive that. So

she's good. But for next year, what we're going to do next year

is the 20th anniversary of the lab, yep. So we've got a lot of

activities planned. So ideally, a groundbreaking for that new

space. We may have one earlier than that, for the university,

but for the industry partners, we want to have groundbreaking

and showcase that new space, the supplier Summit. We're thinking

about expanding that up a bit too. I'm trying real hard. You

mentioned that supplier Summit, like the second one, I thought

we were going to have like, 50 to 100 people. We opened it up

with 200 and it was gone like within two days. And I seeing

how much of a venue space we can get here in the Auburn area,

because if we're going to do the full groundbreaking and all

these other industry stuff and 20 year celebration, I think we

really want to kind of have a big show and tell party, bring

everyone

you've got a football stadium, right? Yeah,

right, yeah.

We're gonna put every single person who's ever

said the word RFID in there. Phillips. Section one, but so,

but no, I think we're working on that piece too, and I think next

year is going to be a big year for us. So we're looking forward

to having our friends now. Got

it and you got a bit you've got a big board meeting

coming up in October, just a few weeks here. Is there any big

agenda items that you want to share with the group before we

before we wrap this thing up,

we're trying to do a little bit more focus on

some of the retailers that don't get as much attention on the

retail space. There's a lot of vertical retailers and malt

retailers who've been chugging along and doing a pretty nice

job of updating their systems, and we don't hear from them as

much sometimes. And I'm trying to get a little bit more of a

refocus on the things that we don't see, and then plan it for

next year. Awesome, awesome.

Well, Justin, I've asked you a lot of questions.

There's a lot of cool stuff coming down the road,

everything, everything from leveraging this up the supply

chain to food to multiple sensors to a brand new facility

that you've we, you've gotten the the university, to invest in

anything that I did not ask you, that I should have what's on

your mind, that that we probably should have brought up in terms

of what's new and different, etc, that you want to share, or

any of the closing comments that you got.

Man, I think you covered pretty well. Mike, that

serialized inventory piece is crucial. And you know, if any

retailer or brand is listening to this now, and you do not have

a if you do not know who in your org is in charge of serialized

inventory, then you need to either sign somebody or figure

out who it is, because there is a future of retail that is

coming that is based on serialized inventory strategy.

And there are some retailers and some brands are pretty advanced

on that, and there's some of them that are still thinking

like the dark days of we're going to do batch, level,

quantity level inventory on a sales floor in the back room.

And those days are coming to a close fast. So folks have an

opportunity to get you don't have to be on the bleeding edge,

but they can get ahead of the curve, or at least be on the

curve, but we cannot be sitting here scanning 1d barcodes in

another five or six years if you expect to stay in business in a

world that expects a 24 hour availability of products to

their customers. And I think that's what we're trying to help

support Awesome.

Well Justin, once again, thank you so much for

your time. Every time we talk, whether we're on a podcast or

not, we always have a couple topics that we didn't even know

where you're going to get into, and they're always very

insightful. The one I wrote down, just so you know, the one

that I wrote down is the difference from my perspective

of an RFID of discovery versus validation. I've never, I've

never heard that before, and I've never really thought about

it before, but it's really, really true. It's, am I trying

to discover new stuff, or am I trying to validate what that

should be? Here is here. That's a really good way of of being

able to think about that. So you got RB,

and you go camping a lot. Mike, right? I

do. So if you got lists, you can check it. You don't forget

anything, right?

We have a list. It's actually electronic, right?

Down, is this down? Is this down? Is this down? Because you

don't want to drive off with the jacks down, that's not a good

thing,

right? If you don't have a list, and you just

have to think it up as you go, you're gonna mess up, right? And

it's the same thing like, that's discovery and validation. If you

got a list and you check it, it's way, way easier on

everybody than if you just have to kind of so remember all these

things and build them as you go. Yeah. 100% Justin,

thank you very much for your time. I really do

appreciate it, and we look forward to the next set of

opportunities for Auburn.

Yes, sir. Thanks, Mike. Talk to you soon. Man,

bye. Bye. You