Implementing RFID in a 3PL Environment
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  • These are the logistics specific RFID applications, exempting applications such as tracking animals with RFID tags, payment of tolls and baggage tracking. The identification of products, regarding where it was produced and the date of manufactured is probably best demonstrated in the concept of putting RFID tags in tires, to track such information. This application has been developed within the Automotive Industry Vertical based on problems experienced by Firestone regarding potential product quality matters. Michelin is currently working on this RFID application for tires. Texas Instruments RFID technology is frequently seen in the tracking and traceability of returnable containers in their advertisements. The Real-Time Locating System (RTLS) application mentioned is a highly specialized application used by Ford, whereby they can initiate the replenishment of Kanban parts through use of RTLS RFID tags. Outside of this specific application, RTLS has been typically used in yard/container management applications.
  • The above issues, the perceived byproducts of RFID use (i.e. lower inventory, shorter order fulfillment times) and RFID compliance are driving Exel’s involvement with the evaluation of RFID technology.

Implementing RFID in a 3PL Environment Presentation Transcript

  • 1. RFID in a 3PL Enviornment Dick Pocek, Director of Logistics Jim Dean, Manager of Customer Supply Chain
  • 2. About Energizer
  • 3. - Energizer Holdings Inc. - (Eveready Battery Company & Schick-Wilkinson Sword )
    • Energizer Holdings, Inc.(Energizer), incorporated in 1999, is one of the world's largest manufacturer of dry cell batteries and flashlights, and a global leader in the dynamic business of providing portable power
    • Energizer is the successor to over 100 years of expertise in the battery and lighting products industry, formerly Eveready Battery Company 1905 -1999
    • Prior to Eveready name, known as National Carbon Company from 1886 -1905
    • Energizer’s battery and flashlight subsidiaries offer a full line of products in five major categories: alkaline, carbon zinc, miniatures and rechargeable batteries; and lighting products
    • In January 2003 Energizer announced purchase of Schick-Wilkinson Sword razor business from Pfizer Inc. for $930 million
    • Schick-Wilkinson Sword is the second-largest shaving-products company in the world
    • Energizer, Eveready and Schick-Wilkinson Sword brands are marketed and sold in over 140 countries
  • 4. National Carbon Co. 1st dry cell battery American Ever Ready Co. first tubular flashlight Ralston Purina buys Eveready Battery Co 1896 1914 1986 April 4, 2000 National Carbon buys American Ever Ready and forms Union Carbide Eveready Battery Co. becomes a subsidiary of independent Energizer Holdings Inc., NYSE ticker symbol ENR
  • 5. Invent first dry cell battery (CZ) Invent first commercial Watch battery 1896 1898 1931 1955 1957 1959 1980 1990 1995 2001 First to freshness date batteries Invent first alkaline battery Invent first flashlight. Invent first D size battery. Invent first miniature battery for hearing aids. Invent first lithium battery (AA) First zero-added mercury battery First on-battery tester First hearing aid battery dispenser A History of Innovation Energizer innovation extends to branded and private label products, as well as our account teams and approach to category management.
  • 6. A Global Production Complex Kenya Sri Lanka Singapore Malaysia Philippines Indonesia Tianjin, China Egypt La Chaux De Fonds, Switzerland Asheboro Maryville St. Albans VT Bogang, China Bennington VT Singular Focus + Global Supply Chain = Efficiency  Garrettsville, OH Marietta, OH Walkerton, Canada   Caudebec, France Tanfeield Lea, U.K. 
  • 7.  
  • 8. Wal-Mart Pilot
  • 9.
    • Wal-Mart Detailed Expansion
    • Step 1: January 2005 – 3DC’s, 102 Stores, 36 Clubs
      • – 6068 Sanger, TX (RDC)
      • – 6064 Cleburne, TX (GDC)
      • – 8235 Desoto, TX (X-Dock)
    • • Step 2: June 2005 – 7 DC’s, 241 more Stores, 73 more Clubs
      • – 6016 New Braunfels, TX (RDC)
      • – 6036 Palestine, TX (RDC)
      • – 6056 Terrell, TX (GDC)
      • – 6083 Temple, TX (GDC)
      • – 7010 New Caney, TX (GDC)
      • – 6698 Dayton, TX (X-Dock)
      • – 8234 Searcy, AR (X-Dock)
    • • Step 3: October 2005 – 2 DC’s, 202 more Stores
      • – 6018 Searcy, AR (RDC)
      • – 6048 Opelousas, LA (RDC)
    • • 2005 Total: (12 DC’s), 545 Stores, 109 Clubs = 654 facilities
  • 10.
    • Wal-Mart
      • 80% of SKUs are Break-Pack and will not be tagged initially.
      • Private Label SKUs will not be tagged
      • Ship mostly mixed pallets not requiring pallet tags
    • Sam’s
      • TL environment
      • 100% of SKUs will be tagged at case and pallet level.
    Energizer and SWS SKU Landscape
  • 11. Energizer RFID Lab
  • 12. Tag and Product Testing
    • Tested different carton types
    • Tag orientation
    • Tag placement
    • Different Tags
  • 13. Energizer’s 3PL RFID Expectations
    • “ Slap and Ship” implementation
    • Processes that are easy to transfer between sites
    • Costs spread over customer base
    • Flexible systems
    • Tracking capability
  • 14. RFID Energizer/3PL Issues
    • Cartons cannot be opened at the warehouse due to the use of wrap-around automated carton forming upstream
    • Size limitation of some cartons
    • Order cycle time issues
  • 15. The Future of Barcodes
    • External
      • UPC
      • ITF14
      • UCC128
    • Internal
      • EAN128
      • UCC128
    • Energizer’s position on bar code utilization is that there will be no change to our use of barcodes near term.
    • Current internal projects will continue as scheduled.
    • External bar code requirements will be dictated by the market place.
  • 16. Energizer’s 3PL Expectations
    • Distribution technology leader
    • Innovator
    • Value added services
    • Stable management team
    • Global capabilities
    • Partnership
  • 17.
    • Internet
    How Does RFID Compare With Other Major Information Technology Development & Deployment Milestones ? Y2K RFID
    • Similarities:
    • The development or deployment of new IT solutions
    • Potentially disruptive technology integrations
    • Fluid landscape with regard to products and vendors
    • Massive influx of resources to respond quickly
    • Market Position Consideration - Lead or Lag?
    199 9
  • 18. Manufacturers Issues Regarding RFID Deployment In Supply Chain Applications
    • Customers Are Starting To Require RFID Use
      • Retailers
      • Government (i.e. DoD & FDA)
    • Limited Resources are available to meet the challenge
      • Personnel
      • Financial Resources
      • Time
    • Many companies have varying degrees of success when using consultants
    • Can I really find an ROI for implementing RFID in my business?
    • How can you make RFID deployments operationally viable?
    • Few companies have real experience with this emerging technology
    • Who are my strategic partners that could help with this initiative?
  • 19. Solution Evolution Moving towards customer integration Value Creation Potential Complexity 5% to 10% typical cost savings 10% to 20% typical cost savings $ RFID assists business integration in that it provides real time data and visibility, involving logistical providers who service companies throughout the supply chain LLP Managed Transportation Order Fulfillment Reverse Logistics Vendor Managed Inventory SCM Managed Transportation Order Fulfillment Reverse Logistics Vendor Managed Inventory Warehousing Service Provider X-Docking Warehousing Transport Third Party Provider
  • 20. Generic Supply Chain Solution Sets Supply Chain Management Raw Material Transportation Manufacturing Warehouse Operations Finished Goods Transportation DC Operations / Finished Goods Inventory Mgt. End Customer/ Consumer Suppliers (Domestic & International) Raw Material Inventory Management Plant Shuttles Outbound Transportation Project Management Continuous Improvement Knowledge Management Supplier Management Inbound Raw Materials In-plant Services Raw Materials Inventory Finished Goods Inventory Customer Management International Freight Inbound Transportation Inbound Transportation Outbound Transportation Outbound Transportation International Freight Automatic identification and data collection technologies are used in all parts of the supply chain today, thus requiring the potential integration of RFID into these areas in the days ahead.
  • 21. RFID Can Be Used In Various Points Throughout The Supply Chain
    • Manufacturing - discretely identify products, the facility in which it was produced and the date of manufacture
    • Distribution Centers - accurate inventory control and order fulfillment activities
    • Retailers - track shelf activity, trigger automated fulfillment, improve customer checkout, billing and shrinkage
    • Reverse Logistics - evaluate merchandise return speed to DCs, disposition of returned products, financials
    • Container/Yard Management - Real-Time Locating Systems (RTLS) triangulate the relative position of tagged items. Useful also for specialized Kanban systems (requires expensive RFID Tags)
    • Asset Tracking – tracking items such as returnable containers and high value products
    Ultimately, the big cost savings and service benefits of RFID will come from a dramatically enhanced ability to manage inventory and orders across time and the supply chain. 3PLs are already firmly established in delivering these type of logistical applications.
  • 22. RFID – How Can It Affect Supply Chain Partners In The Future?
    • Customers will likely keep requesting the use of RFID and other emerging supply chain technologies.
    • Resources throughout the supply chain could possibly be positively or negatively impacted by RFID deployments (i.e. personnel, inventory, money, equipment, space …).
    • Supply Chain information technology implementations will have special focus placed on RFID integration
    • Trading partners will have to figure out how to manage the data collected from RFID applications and use it for advanced demand planning strategies.
    • 3PLs with RFID experience will be able to assist companies across the entire supply chain.
    RFID ?
  • 23. 3PL RFID Case Study: Exel PLC Presentation courtesy of Exel PLC
  • 24. Executive Summary (RFID)
    • The current state of RFID:
    • An emerging technology
    • Many critical issues
    • Ready for wide adoption in the supply chain?
    • As supply chain leaders, Exel is responding to this technology by directing global and local teams to work with customers, RFID experts, and vendors to understand the value, cost, challenges and opportunities related to this technology.
    Given Exel’s market position, we have a unique opportunity to understand technology from multiple business applications, across different supply chains.
  • 25. Factors Driving Exel’s Response to RFID
    • Customers
      • Retailer compliance
      • Opportunity to provide customer channel solutions
    • Operations efficiency
      • To be proven
    • Supply chain visibility in certain services…
      • Global freight management
      • Demand planning
      • Track/trace
      • Returnable containers
    • … and broader future visibility leading to enhanced supply chain performance and solutions
    Exel’s RFID strategy positions Exel to better understand RFID and create value:
  • 26. Exel RFID Organization Global RFID Strategy Team RFID Core Team Market Vertical & Account Specific Teams Steering Committee Communication & Consistency Execution Within each team all operational functions and market verticals are represented, thus making sure that RFID solutions are looked at holistically and that best practices are shared.
  • 27. So what has Exel done to date. . .
    • Participated in some 8 – 10 major pilots globally
      • Theatres – Americas, EMEA & APAC
      • Industry Verticals – Retail, Consumer & Technology
      • Standards – EPCglobal and non-EPCglobal RFID
    • Became a member of EPCglobal
    • RFID deployments/applications inclusive of:
      • Numerous pieces of material handling equipment
      • Dock doors
      • Staging areas and pallet racking
      • Pallets
      • Stretch wrappers
      • Containers and high value assets
  • 28. Exel RFID Application Examples Dock Door RFID Portal Fork-lift Mounted RFID Garment On Hanger RFID Portal RFID Enhanced Stretch Wrap Machine RFID Enabled Rack RFID Enabled Bulk & Staging Areas
  • 29. RFID Centers of Excellence Overview
    • Create a theatre specific RFID laboratories where Exel and partners can test RFID application
      • Americas, Europe and Asia
    • Involve RFID, WMS, system integration, material handling and other technology vendors as partners
    • Multiple applications of the technology will be reviewed in these centers
    • Vendor and technology “agnostic” due to fluid RFID landscape (standards and technology in a state of flux)
    • Open to customers to test their RFID applications
    Centers of Excellence activities will help our clients and our account teams determine the best applications for RFID in supply chain applications.
  • 30. RFID Center Of Excellence Preliminary Layout Americas Facility Center Of Excellence will focus on real-world tests for RFID usage in areas such as shipping & receiving, putaway & picking, label placement, material handling and systems integration. Matrics Readers
  • 31. RFID Project Challenges
    • New and existing RFID products are not necessarily interoperable with other RFID vendor offerings
    • Product availability and product development can delay pilots
    • Many companies are selling RFID products, but total RFID integration can be a challenge (tags, readers, printers, middleware)
    • UHF RFID hardware can interfere with existing 900 MHz RF systems operating within DCs, requiring countermeasures or upgrades
    • Specific product & packaging combinations frequently prevent reading of cases at the center of a pallet
    • EPCglobal Generation 2 RFID Standard Ratification Date ???
    • 6-12 month product development cycle after EPCglobal Gen. 2 approved
    • ROIs for RFID technology deployments can be difficult to obtain
    • Data management (EDI, visibility, order management) is not currently a requirement from mass retailers even though this will be important
  • 32. Exel Client RFID Activities & Observations
    • Mass Retailer RFID mandates have generated the following:
      • Manual “slap & ship” of RFID tagged skus
      • Semi-automated tagging of skus (e.g. conveyor augmented solutions)
    • Automated/semi-automated RFID tagging solutions need scalability and flexibility as part of a long-term solution
    • SKU quantities used in RFID trials have been limited (20 or less typ.)
    • RFID tagging is being pushed further into the supply chain based on the difficulty and expense of RFID tagging products at the plants
    • Asset tracking is the primary means of deploying RFID outside of current mass retailer mandates
    • Outside of the Retail/CPG Market activities, Pharmaceutical and Technology Market RFID applications are on the rise
    • Exel has been and continues to be brought into RFID projects to assure operational viability and proper execution of RFID projects
  • 33. QUESTIONS ???