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Deploying a RFID Solution Practical Case Study and Business Plan


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  • 1. Deploying a RFID Solution Practical Case Study and Business Plan [Sample/Excerpts ONLY – Not Full Report] Sanjay Chatterjee June, 2007 To fully understand the capabilities of RFID, it is helpful to consider how the technology can be beneficial in real business situations. We evaluate the impact of RFID throughout the supply chain, delivering efficiencies for three types of organizations: manufacturers, distributors, and retailers. This report provides case study analysis of RFID solution deployment and related business plan. Research Consulting Training Technical Writing RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 1 of 31
  • 2. Overview The report also provides expert analysis of RFID in practice including an evaluation of the RFID value chain, business process life-cycle, business process strategy, market overview and challenges. RFID middleware providers are profiled with device selection criteria is evaluated. Active RFID vendors and products are profiled and evaluated. The report discusses risk profile assessment and risk assessment services. The report also includes eight case studies for RFID implementation and operation. RFID Business Plan and Financial Assessment The report contains a business plan including financial projects and financial assessment with a working Excel spreadsheet. This information will assist with business case development, funding, budgeting, and launch of a RFID solution. Target Audience This report is intended for anyone considering launching a RFID-based business, solutions involving RFID, and/or business process automation using RFID. • RFID hardware, software, solution vendors and related professional services companies • Managed services providers, outsourced RFID solutions and application providers, and RFID service bureau operators • Personnel responsible for automating Supply Chain Management (SCM), Customer Relationship Management (CRM), Manufacturing Resource Planning (MRP), Enterprise Resource Planning (ERP) and other business processes • Manufacturers and personnel responsible for management of inventory and materials, timing and control of critical resources, improve Warehouse Management Systems (WMS), and other production line automation and industrial processes • Healthcare management personnel responsible for tracking patients, staff personnel, equipment, inventory, and other critical resources • Retailers and personnel responsible for merchandise inventory and ordering processes, Customer Relationship Management (CRM), Merchandise tracking and fraud prevention • Providers of value-added applications and services such as metering, telemetry, telematics, and sensor applications, inventory control and tracking such as merchandise control, asset tracking and recovery such as computing equipment monitoring, tracking parts moving through a manufacturing process, tracking goods in a supply chain, and payment systems • Providers of RFID middleware such as the VeriSign or Oracle • Companies interested in optimizing their RFID business process strategies Published: May 2007 114 Pages and Excel Spreadsheet Author: Sanjay Chatterjee Single-user $ 995 US Company-wide $ 4,995 US RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 2 of 31
  • 3. Index: I. Dedication II. Introduction III. RFID in Practice and Business Benefits RFID in Practice Manufacturing Retail RFID Business Benefits Improved Productivity and Cost Avoidance Reduced Business Risk and Control of Assets Applications for RFID IV. Understanding the RFID Supply Chain RFID Solution Scenario V. RFID Business Process Life cycle Older Life-Cycle Models Newer Life-Cycle Models VI. RFID Business Process Strategy IBM RFID Strategy Heinz RFID Strategy Canus RFID Strategy International Paper RFID Strategy Kayser-Roth RFID Strategy Philips Semiconductors RFID Strategy Intel RFID Strategy Unilever RFID Strategy Major Clothier Retailer RFID Strategy Marks and Spencer RFID Strategy RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 3 of 31
  • 4. VII. Market Overview & Challenges Market Overview Challenges to Adopting RFID Software Infrastructure Challenges RFID Hardware Device challenges Interoperability and Integration VIII. Available RFID Middleware Acsis Axcess Blue Vector Systems ConnecTerra Data Brokers EPCglobal Franwell GlobeRanger i2 Technologies Manhattan Associates OATSystems Oracle RF Code Savi Technology Sun T3Ci TIBCO VeriSign webMethods IX. RFID Device Selection Criteria, Economic analysis Feasibility study Range Observation Tag Identification X. Market Survey of Active RFID Products RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 4 of 31
  • 5. XI. RFID Risk Assessment XII. RFID Implementation Examples 8 small case studies on companies who implemented RFID Namely Gillette, Procter & Gamble, Marks and Spencer XIII. Conclusion XIV. A Full-scale report with Financial for Adopting RFID RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 5 of 31
  • 6. Chapter 1 Introduction RFID is proving to be one of the best solutions for tracking and identifying assets around the world. It can be used to locate items, and not only that it can be used to monitor animals, provide quick identification and tracking of medicines in the hospitals, can be deployed in various spheres for tracking and managing moveable assets. As a result the potential advantages of RFID can be summarized as: • The automotive industry has been using closed-loop RFID systems to track and control major assemblies within a production plant for over 30 years. • Many of the world's major retailers have mandated RFID tagging for pallets and cases shipped into their distribution centers to provide better visibility. • There are moves in the defense and aerospace industry to mandate the use of RFID to improve supply chain visibility and ensure the authenticity of parts. • Regulatory bodies in the United States are moving to the use of ePedigrees based on RFID to prevent the counterfeiting of prescription drugs. • Hospitals are using RFID for patient identification and moveable asset tracking. • RFID tags are being used to track the movement of farm animals to assist with tracking issues when major animal diseases strike. [See Full Report for More Information] In this case study I bring a real deployment of an Active RFID Solution. In doing so I would focus on a lot of aspects especially on the factors that help an organization judge the need of a RFID solution. Moreover I would even stress on the key areas mainly related to the comparisons of hardware costs, features, advantages, limitations. This case study will not only serve as a good source for getting a rough idea about the budgets involved but it would also give the reader a true picture of the possibilities and the limitations that RFID faces till now. RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 6 of 31
  • 7. Chapter 2 RFID in Practice and Business Benefits RFID in Practice To fully understand the capabilities of RFID, it is helpful to consider how the technology can be beneficial in real business situations. The following examples illustrate how the technology can impact throughout the supply chain, delivering efficiencies for three types of organization: manufacturers, distributors, and retailers. The scenarios focus on a bicycle manufacturer that produces high-end bicycles for the global market. All parts are purchased from vendors, except for the frames, which are made in-house from raw steel pipe. The description shows the potential of RFID to deliver benefits at every stage of the supply chain as the bikes are assembled, distributed to retailers, and finally sold to customers. [See Full Report for Details] RFID Business Benefits Use of RFID technology can increase business productivity and reduce associated costs. To ensure that companies benefit from the advantages RFID provides it is important to understand how to adopt this technology. By analyzing current practices and procedures eight main areas of benefit can be identified. These are: • Improved Productivity and Cost Avoidance. • Decreased Cycle Time and Taking Costs Out. • Reduced Rework. • Reduced Business Risk & Control of Assets. • Improved Security and Service. • Improved Utilization of Resources. • Increased Revenues. • Exception Management. Improved Productivity and Cost Avoidance Identifying items by RFID involves less work than using barcode scanning and other less automated ways. This leads to greater process effectiveness in many tasks such as receiving and putting away, picking and shipping goods when the time required and cost of identifying items by RFID is substantially less than other methods. [See Full Report for More Information] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 7 of 31
  • 8. Improved Security and Service Being able to validate information relating to an item enables increased security. This individual identification contributes to more effective access control, reductions in shrinkage and other losses, and the ability to provide fast and efficient services at the point of need. Ability to authenticate information can prevent activities like counterfeiting and fraud. [See Full Report for More Information] Applications for RFID Applications fall into two principal categories: short range applications in which the reader and tag must be in close proximity (such as in access control), and medium to long applications in which the distance may be greater (such as reading across a distribution center dock door). A sample of applications is shown here: • Access control for people: There are many areas in which RFID tags are carried by people to allow them to gain access to facilities or services: • Secure access to work place • Safety access to dangerous/secure equipment • Access to a computer or vehicle • Access to travel on trains/buses • Access to leisure facilities • Access control for vehicles: • Secure access on site • Road tolling • Instant payment for fuel • Manufacturing automation: • Control of flexible manufacturing processes by recognizing items being built on a production line (mass customization enabler) • Labeling key components for later recycling • Logistics and distribution: • Tracking parcels from shipment to end customer • Tracking goods from manufacture to retail • Retail: • Supply chain management • Stock taking • Reducing loss through shrinkage • Reverse logistics • Product availability • Maintenance: • Plant & Equipment • Fixed assets • Patients • Product security: RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 8 of 31
  • 9. • Tamper evidence • Product authentication • Anti-counterfeiting [See Full Report] Chapter 3 Understanding the RFID Supply Chain A simple Supply Chain consists of end-customers or consumers who buy goods or services from a retailer at a store or through other channels, such as an e-commerce website. The retailer may stock the goods and tools to provide the services from a wholesaler or a distributor. The distributor normally buys goods in large quantities from a manufacturer who makes the goods in a factory or a production facility. The manufacturer buys raw materials from suppliers. Figure 3. A simple retail supply chain A typical supply chain has one or more of each of these entities. There could be multiple tiers of suppliers, manufacturers, and distributors. As materials move from the initial supplier in the chain to the end-customer, value and costs are added at each node. As you get closer to the retailer, the supply chain becomes more complex, with different products sourced from many different business partners; a retailer like Wal-Mart sells thousands of products sourced from thousands of direct suppliers. [See Full Report for More Information] RFID Solution Scenario TeddyCo is a retailer that sells high-end sporting gear. One of their high-demand categories is customized sports bicycles. Even though they carry bicycles from all the major manufacturers, Bikes R Us is their key business partner. Bikes R Us is a manufacturer of sports bicycles and produces high-end, custom bicycles for a wide variety of retailers. Bikes R Us ships finished bicycles into four TeddyCo distribution centers around the country. Bikes R Us sources parts from various suppliers. RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 9 of 31
  • 10. Figure 4. Scenario supply chain Bikes R Us Factory One such supplier is Perfect Circle, a supplier of bicycle tires. Perfect Circle supplies Bikes R Us with an in-house stock of tires. They have a vendor–managed inventory (VMI) arrangement with Perfect Circle. Perfect Circle has real time visibility into the tire inventories through a simple portal. That means that Perfect Circle is responsible for tire inventory at Bikes R Us; Bike R Us never has to place an order manually. Tires Receiving Bikes R Us has a tire storage area. The three doors to this area are fitted with RFID antennae that are connected to an RFID Reader. As RFID-tagged cases of tires arrive from Perfect Circle, antennae read the tags and update the tire inventory. When tires are taken out to be assembled with bicycle frames, inventory is reduced appropriately. When the inventory goes below the reorder point, a replenishment signal is generated and sent to Perfect Circle. Before Perfect Circle used RFID, they had to simply look at Bikes R Us's past pull rates and forecast how many tires they should deliver each week. Once, TeddyCo ran a special on childrens bikes and Bikes R Us was using half of their resources to assemble only childrens bikes. Perfect Circle did not detect the spike in childrens bikes, and Bikes R Us ran out of childrens bike tires. Perfect Circle had a container air-lifted from their southwest DC and delivered to Bikes R Us to meet the increased demand. However, they had to eat all the extra cost. Worse, the demand planning system increased the forecast for the next four weeks, which ended with three containers of childrens bike tires sitting unused at Perfect Circle. Perfect Circle had to take significant charges in inventory carrying costs. Now with RFID, Perfect Circle always knows exactly how many tires are in the warehouse at Bikes R Us and is able to follow and react to changes in requirements in real-time. Given the real-time signals, Perfect Circle now delivers tires two times a day to Bikes R Us. [See Full Report for More Information] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 10 of 31
  • 11. Bicycle Assembly Bikes R Us has different assembly stations for different types of bicycles. 1. Based on the day's orders for each assembly station, a requirement list is generated and sent to the storage area. 2. Every morning, Joe, who operates the forklift in the Bikes R Us assembly warehouse, picks up the tires according to the assembly workstation requirement list and drops them at the appropriate assembly stations. 3. As Joe's forklift leaves the storage area, tire tags are read and the inventory is updated in real time. 4. As Joe drops the tires at each assembly station, tags are read and the system verifies that the right type of tires is dropped at the right assembly station. 5. Bob works at the children's bicycle workstation. Once Bob assembles a bicycle, he places the finished bicycle in a case and pushes the Create Case Tag button. This automatically prints a new RFID tag and, as Bob places the tag on the bike, the system associates the tag ID of the tires to the tag ID of the bicycle. 6. As bikes are assembled, Joe gets a notification to deliver the bikes to the quality control area. Joe loads the cases onto the fork lift and drives away. The tire inventory at the workstation is automatically deducted. If the inventory falls below a certain level, a notification is sent to Joe to replenish more tires from the storage area. RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 11 of 31
  • 12. RFID-enabled operations Quality Control Jane works in the Bikes R Us quality control department. Her job is to inspect bicycles to ensure they were assembled correctly and to verify that the right tires were mounted based on the specifications. Before Bikes R Us started using RFID for tires and bicycles, she had to pick a bicycle case randomly from a lot, open it, take the bicycle out and perform her procedures. Now, with RFID, Jane simply scans each case that contains the bicycle, and the system reads the bicycle tag and the tag on the tires automatically. It checks those tag IDs against the bill of material (BOM) assembly information and alerts Jane if there is an error. By using RFID, Jane is now able to process more cases during the day. As Bikes R Us is inspecting each bicycle that is assembled in their factory, their quality has improved from 93% to 99.99% [See Full Report for More Information] Chapter 4 RFID Business Process Life Cycle This life cycle puts engineering discipline into the business process, so that it allows reengineering of each stage when it receives feedback from other stages in response to emerging technologies, organizational changes, and new legislation and regulations. In choosing a life cycle for your organization, you need to consider business process models, implementation approaches, methods and techniques, life cycle methodologies, processes and procedures, and automated tools. It is the responsibility of the executives to ensure the effectiveness of RFID business processes and the resulting ROI that would pay off the investment within a certain timeframe. RFID business process reengineering is a form of systems engineering. Like system engineering, RFID business process reengineering begins with a study of what user needs are, and proceeds to the development of concept and a model (e.g., Adaptive or Predictive Multi-Layer Business Process Model) and determines what the new systems and hardware requirements will be to translate the concept and model to a concrete infrastructure. Next, you need to have the system design documented in a professional manner that can be easily understood by a team of executives, IT managers, and other members. If the document reveals in the RFID business process reengineering, the team needs to revise the concept, model, system design, software requirements, and hardware requirements. The process continues until the executives and other team members are satisfied with how RFID business processes should be reengineered. [See Full Report for More Information] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 12 of 31
  • 13. Newer Life-Cycle Models We consider three new life-cycle models that can be used to improve RFID business processes. They are adaptive linear feedback life cycle, adaptive dynamic life cycle, and predictive. Adaptive Linear Feedback Life Cycle The adaptive linear feedback life cycle is based on the Adaptive Multi-Layer Business Process Model. Unlike the incremental and spiral models, the strategies, requirements, and objectives are well defined, so there would be no tendency to push difficult problems to the future. The impact of each stage on business processes is addressed as the model moves to a higher level linearly. Risk analysis and mitigation take place only at the implementation stage. In response to technology changes, the model sends feedback to the beginning of the first stage of the model. At this point, the process is repeated. Adaptive Dynamic Life Cycle The adaptive dynamic life cycle is based on the Adaptive Multi-Layer Business Process Model. Unlike the incremental and spiral models, the strategies, requirements, and objectives are well defined, so there would be no tendency to push difficult problems to the future. The impact of each stage on business processes is addressed as the model moves to a higher level. Unlike the linear feedback life cycle, risk analysis and mitigation take place only at each stage. In response to technology changes, the model sends feedback to not only the beginning of the first stage but also the other stages of the model. The process is dynamically iterative. Changes in strategies, requirements, and constraints are well defined. One example of this use of the adaptive dynamic life cycle is several adjustments to the speed of a laptop as it was affecting the quality of RFID input readers into the laptop. [See Full Report] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 13 of 31
  • 14. Chapter 5 RFID Business Process Strategies In this part we would look on some of the Industry Leaders on how IBM, Heinz, Canus, International Paper, Kayser Roth, Philips Semiconductors, Intel, Unilever, a major clothier retailer, and Marks and Spencer have used RFID strategy to identify and reengineer business processes that will derive the most value for the emerging technology and then to develop an implementation plan that would bring in realizable ROI sooner. No business process strategies are the same in scope and approach at site, package, and network levels. IBM RFID Strategy IBM focuses on RFID strategy both for the enterprise and mid-business market as a way of choosing the right mix of implementation approach, technologies, and business processes. The company groups business processes into four components: SCP, SCE, inventory merchandise management, and customer experience. It pulls data from the RFID infrastructure by the way of data and process integration into these business processes. What this means is that the data from the infrastructure is operated on, aggregated, and altered through process integration into the four components of business processes. IBM focuses on open communication required to connect among the RFID infrastructure, the process integration, and the business processes along with external integration via middleware technologies. Once the business processes have been set, they are used to enable the RFID network and integration services. The final step is to establish strategy services in the following areas: business case, strategy assessment, roadmap development, pilot development, and supply chain development. To develop a pilot study, you need to present first a business case (see Heinz Product Scenario Testing). Next, you proceed to strategy assessment using the findings as the background material and develop a roadmap over a period of time. If the pilot study does not succeed, you need to return to the business case and strategy assessment to correct the flaws (e.g., RFID labels were put on the wrong places of certain food products; they were too close to the top containing the liquid component). Only when the pilot study shows a successful RFID implementation, can you then plan and develop supply chain facilities, networks, and applications. This indicates IBM has been using the Adaptive Multi-Layer Business Process Model with layers tailored to their business process components. RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 14 of 31
  • 15. Heinz RFID Strategy Now let us take a look at Heinz that did not know which vendors to use or which direction to take in implementing RFID. The first step the company undertook to develop a RFID strategy was to hire the IBM Business Consulting Services to determine how to use the technology in the most effective manner to keep the retailers happy. Heinz wanted to make sure its RFID strategy would be in line with the changing market trends while maximizing its potential ROIs. In response, IBM recommended top of the line vendors and the way RFID infrastructure should be built in the entire supply chain, not just a portion of the supply chain. Due to contents of many cans and packages, IBM experimented with different label placements on the product in various environmental conditions and conducted a RFID pilot using the application from Heinz. IBM used various models to compare alternative costs and benefits of each scenario over a period of ten years. Not only ROI was calculated; IBM used other financial tools to compare the costs and benefits of outfitting plants and warehouses with RFID technology and determining the best loading/unloading dock throughputs. [See Full Report for More Information and Case Studies] Chapter 6 Market Overview & Challenges Market Overview Wal-Mart has announced that its 100 top suppliers must tag their deliveries (at pallet level) by 2005. This mandate for a phased rollout, in tandem with large pilots at Target, Albertsons, and other organizations, including some US pharmaceutical companies, has raised expectations for future market size and growth. This uptake in the supply chain is mirrored by RFID deployments by the US military and by a range of other applications in agriculture, tourism, and asset management. In Europe, a host of organizations including Carrefour and METRO are already putting RFID solutions through preliminary trials. Manufacturers such as KiMS in Denmark are also piloting the technology. Research by RF & Microwave Industry News suggests that RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 15 of 31
  • 16. 41 percent of European retailers are planning RFID pilots for 2004 (RF & Microwave Industry News, February 5, 2004). According to estimates provided by leading pharmaceutical manufacturers, following their pilots it is estimated that RFID-based solutions could save the industry more than $8 billion by 2007/8. [See Full Report for More Information] Real Time Data Consumption RFID Readers are generating data constantly as they read the tags. Most of the readers on the market do some level of filtering. Still, if the application directly interfacing with the Readers is busy, there is a chance of data getting lost. Also, many initial applications out there are simply hard-coded on top of the reader interface, and if the reader is stuck for some reason, these applications can "lock up." Hence the need to create an asynchronous layer that sits between the reader device and the application that can store and forward messages, ensuring reliable message delivery. Also, in an enterprise, multiple readers can read large amounts of data at a given time, and this needs to be appropriately aggregated and routed to the business applications. This can be addressed by using a message queue providing the asynchronous layer that guarantees reliable message delivery at high volumes. The bicycle scenario development used a Microsoft Message Queue (MSMQ). Technical Details describe the advantages of using MSMQ and provide an implementation for the bicycle scenario. [See Full Report] Chapter 7 Available RFID Middleware Since data collected by various RFID readers come in different formats, integrating data in a common format with enterprise systems is accomplished via the route of middleware. Most middleware products act as traffic cops or a bridge between disparate systems. A list of RFID Middleware providers are as follows: • Acsis • Axcess • Blue Vector Systems • ConnecTerra RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 16 of 31
  • 17. • Data Brokers • EPCglobal • Franwell • GlobeRanger • i2 Technologies • Manhattan Associates • OATSystems • Oracle • RF Code • Savi Technology • Sun • T3Ci • TIBCO • VeriSign • webMethods I. ACSIS INC. (WWW.ACSIS.COM) Acsis’s newest product offering is an RFID interface to SAP R/3 with a focus on supply chain management. It integrates data collected from its partners 2.4-GHz RFID devices (900 MHz also supported) into a company SAP R/3 system using DataPassô, a Certi?ed Interface for SAPô R/3. DataPass operates through Intermec, Symbol, Telxon, LXE, and Techlogix Palmtop CE and Palm devices and works with existing LAN or WAN, allowing real-time data collection from warehouse, distribution center, manufacturing location, or any auxiliary site within a supply chain. DataPass passes data to Microsoft SQL Server as a local database and works with all standard SAP R/3 interfaces. In addition, it allows the use of RFID in the Supply Chain: A Guide to Selection and Implementation intelligent RF devices, Windows-enabled PCs, and CE products, all running within the same environment. Visual Basic and Visual C/C++ can be used to build custom local applications. [See Full Report for More Information and Vendor Analysis] Chapter 8 RFID Device Selection Criteria: Preparation for economic analysis/feasibility study RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 17 of 31
  • 18. To begin the processing of selecting a tag type with an associated reader, you should consider answering the following questions as part of the selection criteria in your economic analysis or a feasibility study. • What are the objects to be tagged? • What are the objects made of and how do they affect reading ranges? • What are chip antenna types? • What readers can read both passive and active tags? • What readers can read both RFID tags and bar code labels for easy transitioning? • What are other considerations that could affect externally the optimal location of tags? • How do various entities organize frequency types or ranges? • What other standards are the vendors using for their RFID products? What Are the Objects to Be Tagged? The objects to be tagged are pallets, cases, and items in a hierarchical order. For our own purpose, this order is arbitrarily based on the hierarchy of three layers of object levels, as follows. • Object Level 0: item level • Object Level 1: case level • Object Level 2: pallet level The Level 0 layer at the bottom of the hierarchy pertains to products on the item level. The Level 1 layer refers to cases stacked on a pallet and the Level 2 layer pertains to the pallet. Given the above hierarchy, lets assume the information stored in a case tag coincides with the information in the database about the products the case holds. We find information stored in a pallet tag points to the information in the database about the cases stacked on the pallet. If the pallet tag gives information different from that in the database about the cases, then we know the reader did not scan all the cases. One possible reason is that the reader may have some problems in reading individual products inside the cases arranged in the center of a pallet, particularly when even rather than odd number of cases are stacked horizontally and vertically on the pallet. It is because in part the reader could not emit enough power to activate tags affixed to cases of items stored in the middle of a pallet stacked with say, 150 cases. RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 18 of 31
  • 19. [See Full Report for More Advice from Real-world Experience] Chapter 9 Market Survey of Active RFID Products We briefy cover active RFID products from Alien Technology, Axcess, Escort Memory Systems, Microtec, Samsys, Savi Technology, and WhereNet. I. ALIEN TECHNOLOGY (WWW.ALIENTECHNOLOGY.COM) Alien Technology produces Ultra-High Frequency (UHF) tags as well as 2450-MHz (microwave) frequency tags for cases and pallets. Alien’s EPC class 1 UHF RFID tags can be applied to metal and liquid environments. When used with circularly polarized antennas, all of Alien’s RFID tags are orientation insensitive. Alien Technology offers these active RFID products: • Reader ALR 9780 • Reader ALR 9640 • Reader ALR 9930-A • Reader ALR 2759 Reader ALR 9780 is a high-performance, four-port fixed reader with a frequency of 902ñ928-MHz ISM band. This FCC-certified reader can be easily mounted where tagged objects are inbound or outbound in a logistics supply chain. It has the ability to read a population of tags at high rates in real-world situations. Software-controlled power output provides for performance optimization in a variety of circumstances. An advanced low- noise RF design provides maximum sensitivity to tag signals rendered faint by distance, moisture, or metal. The use of circularly polarized antennas allows tags to be read whether they are vertically or horizontally oriented. Configuration is accomplished either locally via serial port or remotely via the Local Area Network (LAN) using a human- readable interface. Software integration is implemented through the use of XML-formatted control data and binary and C-language APIs. The ability to trigger reads by external event, command, or schedule allows the reader to mold to the business process. The reader can be configured to notify operators of tag events by LAN, input/output (I/O) signal, or even e-mail. With field-upgradeable firmware and a high-performance digital signal processor, the ALR- 9780 is designed for maximum upgradeability to future EPC specifications. RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 19 of 31
  • 20. Reader ALR 9640 is a fixed reader with integrated antenna with a frequency of 902ñ928- MHz ISM band for use with UHF Class 1 tags. Some application examples include industrial warehouse and logistic facilities. The reader electronics and antenna reside in a single package, eliminating external antenna cables. Equipped with an Ethernet interface, the ALR-9640 integrates with a network. The ALR-9640 includes basic over-the-network management and control. This FCC-approved reader reads up to 50 tags per second. Configuration is accomplished either locally via serial port or remotely via the LAN using a human-readable interface. Software integration is easily implemented through the use of XML-formatted control data and binary and C-language APIs. The ALR-9640 is equipped with a flexible mounting system. The antenna is an orientation-insensitive design, allowing tags to be read no matter what their angle of presentation to the reader. The ALR-9930-A RFID reader/programmer module with a frequency of 902ñ928-MHz (ISM) band is designed for rapid integration of EPCglobal UHF Class 1 support. It is small enough for integration into handhelds, printers, shelf readers, and more. A library of C-language APIs ensures integration for rapid prototyping and development. With an anti-collision algorithm, the ALR-9930-A module reads multiple tags in the field of view, regardless of the number of tags, and is designed as an option for printers, handhelds, and others. Software-controllable output power and communications combined with unlicensed operation provide flexibility within diverse end-user applications. Software integration is easily implemented through the use of binary and C- language APIs. A complete software developers kit with sample code is available. Firmware is upgradeable. This 2450-MHz ALR 2750 reader uses an Intermediate Frequency (IF) channel to obtain ranges in order of magnitude greater than existing commercial systems. This reader with four I/O ports is targeted at indoor applications, such as pharmaceutical track and trace and textile tagging. This system has the ability to read up to 250 tags in an RF field and at distances of several feet. The reader can be interfaced either locally or through a LAN interface to remote servers. Input control lines allow for trigger inputs, which turns on RF only when goods are present, thus alleviating interference with other RF sources in a large warehouse or supply chain. Output control lines enable the operation of a gate or door when a valid tag is interrogated. It is certified for use in Japan and as of Spring 2004, will soon be licensed in the United States. [See Full Report for More Product Information from Suppliers] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 20 of 31
  • 21. Chapter 10 Risk Assessment In this section, we look at three types of risk assessment: • Risk assessment profile of companies implementing the RFID deployments • Internal asset risk assessment • Risk assessment service We also look at choosing a firewall product to be considered as a counter-measure in risk assessment. Keep in mind risk assessment tends to be data-oriented. We need to make an assessment of how well business processes can be or have been applied to the RFID infrastructure. We need to develop countermeasures to mitigate the risks to the infrastructure as a result of an incorrect or inadequate sequence of business processes of having an impact on the effectiveness of the infrastructure. [See Full Report for More Information] Chapter 11 RFID Implementation Examples The first eight implementation examples pertain to retailing and logistics. METRO Group was the first retailer in the world to start rollout of RFID-tagged pallets and cases. Gillette presented a demo on how it could redirect a misplaced case to its intended destination. Canus showed how tag reading at a certain speed can slow down a computer. International Paper offers customers automatic reorders when they move a roll of paper onto their equipment. Unilever focuses on tag location on cases for less interference. Procter & Gamble used RFID technology to solve docking loading throughput problems. A major retailer succeeded to achieving a 99.9 inventory tracking accuracy in its first major field test of RFID. Marks and Spencer shows how employing RFID technology reduces the systems capital cost less than 1/10 of the annual cost of using bar codes for perishables throughout the supply chain from pick-up to distribution. The last implementation example pertains to the library and textile garment markets. Although they may appear to target a limited audience, they could be used as lessons to learn in retailing and logistics. RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 21 of 31
  • 22. METRO Group: IBM RFID Servers in Early Deployment METRO Group hired IBM to provide middleware and installation services for the RFID rollout that began in November 2004 with shipments of warehouse pallets and cases from 20 product suppliers, including Unilever, Procter & Gamble, Gillette, Johnson & Johnson, Kraft Foods, Colgate-Palmolive, GlaxoSmithKline, Nestle, and Esprit. METRO Group has used an IBM RFID middleware based on the IBM WebSphere RFID Premises Server to provide the retailer with a virtual view of RFID-tagged pallets and cases shipped to its distribution center and exchange data with METRO’s merchandise management system. METRO’s RFID rollout is expected to grow to about 100 suppliers by December and about 300 suppliers by 2006, along with additional METRO warehouses and stores in Germany. Early deployment in November 2004 was influenced by METRO’s belief that the results of the Future Store Initiative indicated that process efficiency and merchandise availability increased by about ten percent and losses and theft were reduced about fifteen percent. Smart Chips were affixed to the pallets. [See Full Report for More Information and Implementation Analysis] Chapter 12 Conclusions Although the use of RFID in a variety of industries has grown tremendously in recent years, its potential hasn't been fully realized, due, in large part, to the challenge of configuring and managing a multitude of incompatible devices and difficulty in building meaningful applications and integrating them with back-end systems. "Until RFID can be fully exploited through the use of technology-based applications, analytical tools, and hardened enterprise-scale technical infrastructure, adoption rates won't meet the expectations most market-watchers set," notes John Fontanella, author of "The RFID Benchmark Report" from Aberdeen Group. Realizing the full potential of RFID requires a common set of tools and a framework that partners and end-users can use to build the solutions that improve business processes— solutions like inventory management and asset tracking. BizTalk RFID does just that, allowing Microsoft partners and end-users to create useful, scalable, flexible solutions incorporating RFID much more quickly and easily—applications that offer more value to the customer. [See Full Report for More Information] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 22 of 31
  • 23. “Adopting RFID” A Business Plan TABLE OF CONTENTS 1. Company Description 1.1 The Objective 1.2 Keys to Success 1.3 Current Status of the Company 1.3.1 Shareholding Pattern of the Company 1.3.2 Current Financial Status of the Company 1.3.3 Current Development and Engagement Status of THE DEMO COMPANY 2. The Leadership Team 3. THE DEMO COMPANY s Domain of Operation 4. THE DEMO COMPANY s Offerings 4.1 THE DEMO COMPANY Devices 4.2 THE DEMO COMPANY Solutions 4.3 Future Product 5. Market Analysis 6. Competitive Analysis 7. Operational Plan 7.1 Location 7.2 Equipments and Devices 7.3 Proposed Team Structure 7.4 Product Development Plan 8. Marketing and Sales Strategies 8.1 Target Market Segment 8.2 Pricing Strategy 8.3 Sales Forecast 9. Financial Plans and Projections RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 23 of 31
  • 24. 9.1 Important Assumptions 9.2 Sales Plan 9.3 Expenditure Plan 9.4 Projected Monthly Cash Budget for Three Years Appendix: Current financial status of the company [See Full Report for Detailed RFID Business Plan] Different application scenarios where THE DEMO COMPANY Products/Solutions may be used Heavy Industries require to monitor the contents of the harmful gasses coming out of the chimneys that pollute the environment. A wired solution is too problematic since the control station is normally situated pretty far from the chimneys, so a wireless solution is needed. THE DEMO COMPANY s Sensor Tags can be mounted on the top of the chimney which can wirelessly transmit the sensed data to the control stations, using multi-hop wireless data communication. [See Full Report for Detailed RFID Business Plan] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 24 of 31
  • 25. Tracking and Monitoring using Active RFID Reader/ Writer THE DEMO COMPANY s Desktop/Handheld Active RFID Reader/Writer enables the user to read, update or write data into THE DEMO COMPANY s Active tags. In some applications, tracking is needed at different disjoint areas within an organization s premises. In such cases, it is not possible to form a mesh network covering all those discrete areas located far apart. Therefore, in these cases, Active RFID Reader/Writer is placed at each discrete region for data collection from tags visiting those locations. Active RFID Reader/Writer are connected to the organizational LAN (wired/ wireless), thus forming a Tag Acquisition Network. In case of handheld active RFID Reader / Writer, data can be collected from sparsely located static tags (e.g sensor nodes monitoring environmental conditions) by physically visiting those locations with the reader even from a distance (outdoor range is 100 meters). [See Full Report for Details of RFID Business Plan] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 25 of 31
  • 26. [See Full Report for Details of RFID Business Plan] [See Full Report for Details of RFID Business Plan] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 26 of 31
  • 27. [See Full Report for Details of RFID Business Plan] [See Full Report for Details of RFID Business Plan] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 27 of 31
  • 28. “THE DEMO COMPANY” Pvt.Ltd. Provisional Profit & Loss Account for the year ended 31/03/2007 CURENT PREVIOUS YEAR YEAR PARTICULARS 31/03/2007 31/03/2006 SCHEDULE AMOUNT(Rs) AMOUNT(Rs) INCOME : Professional Fees earned 369532 127982 Other Income 86152 TOTAL 455684 127982 EXPENDITURE : Administrative & Other Overhead H 457891 120247 Filing Fees 4774 Trade Licence 500 1160 Licence Fees 800 Preliminery Exp.-Written off 12715 12715 Directors' Remuneration 150000 Honourarium to Chairman & Directors 425000 Depreciation 50541 7617 TOTAL 522447 721513 Profit before tax / (Loss) (66763) (593531) Provision for taxation Profit after tax / (Loss) (66763) (593531) Balance brought forward from previous year (593531) Net Balance carried to Balance Sheet (660294) (593531) [See Full Report for Details of RFID Business Plan] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 28 of 31
  • 29. “THE DEMO COMPANY” Pvt.Ltd. Schedules forming Part of Profit & Loss Account SCHEDULE – H CURENT PREVIOUS PARTICULARS YEAR YEAR 31/03/2007 31/03/2006 AMOUNT(Rs) AMOUNT(Rs) Salaries & Allowances 90100 22500 Accounting Charges 2000 Rent 107500 22500 Electricity Charges 19778 1140 Printing & Stationary 19808 15385 Travelling & Conveyance 25247 8902 Repairs & Maintenance 3532 10329 Postage & Stamps 5084 984 Audit Fees 5000 5000 Legal Expenses 8950 Workshop Expenses 52544 Seminar 2000 Project Expenses 12442 Membership Fees 5000 Telephone Charges 37397 5990 Service Charges 4510 Books & periodicals 50 Bank Interest & Charges 3143 570 Professional Fees 5556 Board Meeting Fees 1500 2500 Hire Charges 15000 Office Expenses 22688 15676 Patent Right Fees 16000 Miscellaneous Expenses 1622 211 TOTAL 457891 120247 [See Full Report for Details of RFID Business Plan] RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 29 of 31
  • 30. About the Author Sanjay Chatterjee is an M-Tech in computer science and engineering with government scholarship through GATE (IIT Madras), having done his B-Tech degree in Information Technology. He joined IIM Calcutta Adhocnet Research group as a Junior Research Engineer and worked in a project sponsored by ATR Labs Japan. It was a project involving ESPAR antenna, developing the Mac protocol for routing for directional antenna. He then worked on rapidly deployable mobile Ad- hoc networks, another research project sponsored by the Department of Information Technology India. Being engaged in some passive RFID projects both short range and long range for “Medical item tracking” and “Attendance system, he later focused on active RFID using ZigBee. Having undergone training in U.K, London for 802.15.4 he is currently working on sensor networks using ZigBee. Moreover he has nearly 5 international publications on the fields he has worked. He has been to Europe for lecture sessions, besides he has some experiences in projects involving GPS and GSM for real time management systems and embedded programming. He has successfully designed software for ESPAR Antenna’s during year 2003 for ATR Labs Japan, designed wireless ad-hoc network architecture for Disaster Management (for a project from MIT), and currently he is developing Tracking solutions, Message Communication systems, Sensor Networks for environment sensing using ZigBee. He has successfully developed a rapidly deployable, self configurable, self healing Tracking System with Active RFID along with the GUI, and a handheld based active RFID reader/writer using the ZigBee protocol and transceiver. Contact: Sanjay Chatterjee at RFID Case Studies and Business Plan Copyright © 2007 Mind Commerce Page 30 of 31
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