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RFID - From Compliance to ROI
 

RFID - From Compliance to ROI

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  • I’d like to begin with a quote which could serve as the theme for this presentation. It comes from the Colin Cobain, CTO of Tesco, a UK retailer who has been one of the early pioneers in deploying RFID within their own supply chain. Colin says “…”. We think that’s true, regardless of whether you’re a key supplier to Wal-Mart or an automotive manufacturer. The benefits of this technology are too compelling not to affect you. Our objective in this seminar help you get started on understanding some of the key issues so that you will be ready to capitalize on the both the challenges and opportunities this technology will present to you.
  • So enter into this environment an innovative technology, RFID. All benefits of bar code – accuracy, transaction efficiency, item traceability, + No human intervention – labor cost, reduced errors No line of sight requirements – item location, clean room (no need to repackage) Simultaneous reads – improved throughput Read/write tags – items can carry information about where they’ve been, what has happened to them
  • Core value prop is reduce cost and increase accuracy of data acquisition. Accenture has coined term “silent commerce” Because of these benefits, lot’s of excitement about the promise this provides FA – Asset tags – reduce shrinkage, improve ability to locate assets Receiving – esp. in DC’s and with Retailers, receiving dock is a bottleneck. Avg bar code scan = 3 sec/read – HV supply chain = thousands of hours of labor Revenue gains – both lower OOS and Shrinkage, as well as improved data Inventory reductions – elimination of error, improved visibility
  • Myth – new technology. Actually 60 yrs old in some form. Meat tagging – pilots since 1980, Card access since 1985 Ezpass – mobile developed in mid 90’s, currently deployed in thousands of locations Retail – Nirvahana for CPG – pilots in progress
  • This is a chart that AMR Research recently published on RFID and the impact on the IT applications of the next 10 years. AMR is predicting this will grow to a $20B industry with a timeline for adoption. It is clear that this industry does not begin to really grow until Item-Level Tagging initiatives start. ABI research.
  • Despite the promise & benefits of RFID, there are some risk and limitations you will need to be aware of. Immature technology – parrallels with bc – EDI and labeling standards really became templates. Another myth is 5 cent tag -- Price point – SCD study reference Part of what we’ll discuss later on it not to let risk immobilize you, but work with partners to manage and reduce impact of risks
  • The RFID Label or tag is the centerpiece of the RF system. The circular pattern around the edge of the label is the antenna and the small rectangle towards the center is the computer chip where data is stored. RFID systems can have active or passive tags. An active tag is battery powered an continually sends out a signal that can be read. A passive label or tag as shown here only sends a signal when it enters the RF field.
  • Here are the components of a typical RFID system. (Go thru steps one thru 8 above) Uses RF for actual data collection. Barcode uses RF for wireless connection, but actual data transmission from item is done via laser scan. This is why line of sight is not required.
  • EPC is to RFID what UCC is to bar code. Set’s standards around frequency, how to filter duplicate reads (anti collision), definition of object type, and finally will host an “ONS” to make object data available in real time over the web. This is a necessary and important part of accelerating the deployment of the tech. Unfortunately, even now were starting to see exactly what happened with bar code – this is more of a template and different customers and industries will have their own spin on the template based on unique requirements. You will need an infrastructure to manage to this.
  • Let’s look at some of the specifics of the DoD RFID requirements. Similar to WM, the DoD will requiring case and pallet level RFID tags. In addition, high value items that require a military UID, or Unique Identification Number will also be tagged at the item level. For these UID items, there appear to be some differences from the EPC global standard, such as requiring a 256 bit tag to store the additional information a UID requires beyond the standard 96-bit EPC tag. The DoD also wants the RFID to be re-writeable, vs. the licence plate approach WM and the EPC currently envision for these tags. The good news is that for most consumer products companies who are also WM suppliers, companies such as Kraft and Coca cola, DoD has said it will accept the WM EPC tag. The DoD is also working to get their longer 256-bit tag as part of the EPC Global standard, so they are trying to consolidate their requirements with the EPC. The final policy standards will be published this month, and unlike WM, they are using the contract renewal process as the trigger to when suppliers must begin tagging items. Any military contract that renews after this Oct will be required to tag all items to all locations --- so there is no geographic phase in process like there is with WM.
  • CO was founded in 1994 With almost 10 years of domain expertise in extending ERP systems – celebrating 10 year anniversary in a few months We’ve become experts in extending ERP systems non-invasively Products and service organization to implement solutions rapidly and successfully. (end) Certified Oracle Partner, and Certified Integration to SAP R/3. Neither SAP nor Oracle have Compliance Labeling or print management built into the standard product, and we add this functionality in a way that is extremely complementary to their architecture.
  • So what is our vision for the RFID market? It is basically identical to our vision for previous generations of technology – cost effective use of the tech. So now that I’ve described our vision, Let’s talk about our product offerings for RFID.
  • CLM – output. Assume most of you are barcode labeling items already. Allows you to set rules regarding the labeling. RFID tracker is the input. Interface with output from the tag readers. Middleware layer between the readers and the ERP. Both products work via a rules engine – with so much change with standards and h/w, we want any of this hardcoded. Too costly and hard to respond.
  • Don’t let the hype and promise of RFID drive you to a project that is not going to improve efficiencies in your operation. Look towards a real business case for doing RFID. This could be related to specific customer compliance issues dictated by large customers You may also look at areas within your own supply chain where RFID improves the process and increases efficiency. One area might be in your receiving dock where goods tend to get backed up causing problems in downstream processes. Working with your suppliers to put an RFID tag on pallets that can be read automatically as a forklift drives through a portal could save you time and increase accuracy Don’t look at a greenfield opportunity for your first RFID project. If you are not using a bar code and scanning that bar code today chances are you are not ready to “RFID Enable” that process. Look to existing bar code automation and areas where there are still problems Many companies may look at mixed mode environments utilizing technology from the bar code printing vendors that allow an RFID chip to be embedded into a label and allow RFID Readers or Scanners to read the data
  • So how does this all work? Let’s look at an RFID enabled supply chain and key process points – R, I, M, P, S. Due to time constraints we’ll move quickly, but one of the follow up items if you like our message is to engage in a 1-on-1 dialog with the Peak/ClearOrbit team to evaluate your unique situation.
  • 1) Tagged items pass through RFID portals – read automatically 2) Raw data from tags are passed to the RFID control module, which filters out duplicate reads of the same tags and conflicts from various antenna.
  • 1) The Hardware Control Module now provides an XML output indicating the unique tag reads processed by each portal. Generally Savant spec. 2) ClearOrbit RFID tracker software contains rules that map the XML output to the specific action, in this case a PO receipt. 3) ClearOrbit RFID Tracker uses the rules engine to issue the appropriate receiving transaction in a language and format the ERP can process as usual.
  • So now that we’ve described how the technology works, let’s look at some of the business processes. Depending upon your perspective, Receiving is where process starts. Reduces errors, labor costs and increases throughput. – MIT/accenture – 65% expense reduction
  • Inventory is the second key area E.g., space optimization in gravity flow racks Currently all racks must contain the same product Using RFID to read racks allows mixed pallets within a flow rack Allows warehouse manager to optimize warehouse space – move product slower moving products to end of rack Still cycle count by RFID Eventually volumetric sizing based on position within rack could be possible

RFID - From Compliance to ROI RFID - From Compliance to ROI Presentation Transcript

  • RFID From Compliance to ROI
  • Presenter
    • George Bravo
    • Account Executive
    • ClearOrbit, Inc.
    • Silicon Valley Office
    • [email_address]
    • 408-396-3408
    • “ The question is not will RFID change the way you do business, the question is will you be ready?”
    • Colin Cobain
    • Chief Technology Officer
  • RFID
    • All benefits of bar code plus:
      • No human intervention
      • No line of sight requirements
      • Simultaneous reads
      • Read/write tags
  • Promise of RFID – “Silent Commerce”
    • Reduce fixed asset inventory 1 – 5% 1
    • Reduce receiving expenses 65% 2
    • Revenue gains of 1 – 3% 3
    • Inventory reductions 10 – 30% 2
    • 1 MIT/AutoID Center
    • 2 Accenture
    • 3 Forrester Research
  • RFID – new technology?
    • Developed in 1944 by British to identify aircraft
    • Meat tagging
    • Security / entry applications
    • Gasoline pumps (EZPass)
    • Tollbooth applications
    • Container tracking with GPS
    • Retail item tagging
  • Prediction on Adoption
        • AMR Research, Inc. copyrighted information
        • RFID Will Be Bigger than Y2K, July 31,2003 Scott Lundstrom
  • Risks & Limitations
    • Immature Technology
      • Evolving Technology
      • Evolving Standards
    • Price Point
    • Various Materials Cause Readability Issues
    • More sophisticated automated decision management systems
      • Elimination of User Interface
      • Host System Impact
      • Amount of data generated and validated
    Don’t let risk immobilize you. Embrace it. Work with partners to manage risk & leverage first mover advantage
  • RFID 101
  • RFID Label RFID Antenna RFID Chip
  • Tag Memory
    • Read Only Memory (ROM):
      • Data is burned into IC at manufacture
      • Can never be changed
      • Virtually no control or alignment of data content with respect to enterprise
    • Write Once, Read Many (WORM)
      • Data generally written into the IC at factory and locked
      • When locked can not be reprogrammed
    • Read/Write
      • Some data may be programmed at the factory and locked
      • Other data may be written, erased and rewritten into memory in the field
        • By customer individually
        • During operation
  • Item-Level Packaging Examples
  • Tag Power
    • PASSIVE - Beam Powered
      • Converts RF energy into DC power
      • Very Long Life products
      • Range is dependent on several factors:
        • Reader Transmit Power
        • Reader Sensitivity
        • Integrated circuit efficiency
        • Environmental conditions
    • ACTIVE - Battery Powered
      • Generally operate asynchronously
      • Battery boosts range and tag sensitivity
      • Battery powers onboard functions when away from reader
    Passive RFID Tag Active RFID Tag Photo Source: PSG Electronics
  • Frequency
    • Low Frequency - 125 KHz to 134 KHz. Worldwide
      • Good for liquids, good near metal.
      • Relatively expensive tags, very wide variety of shapes.
      • Can have large antennae with 4 to 5 feet of range.
    • High Frequency - 13.56 MHz. Worldwide
      • Good for liquids, poor near metal.
      • Inexpensive tags, very wide variety of shapes, good Standards.
      • Generally up to 3 feet of range.
    • UHF - 902-928MHz, 868MHz, 862-869MHz.
      • Poor near liquids or metals.
      • Very inexpensive tags, restrictions on shape.
      • Ranges of over 10 feet.
    • uW - 2.45GHz. Worldwide
      • Very poor near liquids or metals.
      • Very small tags, potentially very low cost.
      • Ranges around 3 feet.
  • RFID “Smart Labels”
    • RFID tag embedded in bar code label
    • RFID tag programmed and validated during the print process
    • Provides three modes of data transfer:
      • Visual (text)
      • Barcode
      • RFID
    • Ideal for “hybrid” applications
  • How RFID Works? Reader/ Encoder Antenna / Portal RF Field Tag Host Computer
    • Tag enters RF field
    • RF signal powers tag
    • Tag transmits ID, plus data
    • Reader captures data
    • Reader sends data to computer
    • Computer determines action
    • Computer instructs reader
    • Reader sends data to tag
  • Need a scalable, adaptable infrastructure to manage daily operations and the evolution
  • Market Requirements Growing Mandate for Use
  • Wal-Mart’s Requirements
    • Pallet Level Tag & Case Level Tagging
    • EDI ASN to include pallet & case tag ID’s
    • Cases must be 100% readable within 10 feet on 600 FPM
    • Tag specifics:
      • 96-bit EPC tag with embedded Global Trade Inventory Number (GTIN) and serial number
      • Will accept any UHF EPC Class 0/1 today
      • Class 1 G2 moving forward
      • UHF 868 – 956MHz world wide
    • No use of EPCglobal network (ONS)
  • DoD Requirements - Background
    • Largest supply chain in the world
    • All containers shipped to Gulf and Afghanistan have active tags (Savi Technology) since 1997
    • Active tags are expensive and proprietary – driving need for passive tags in broader rollout
    • Collaborative approach with suppliers
    • More willing to pay for technology (contractual issues)
    • Intend to leverage commercial technology and standards (e.g., EPC)
  • DoD Requirements
    • Items to be tagged
      • Case- and pallet-level tagging
      • Item-level tagging for packaging currently requiring UID (greater than $5,000)
    • Modifications to EPCglobal standards
      • Class 2 vs. Class 1, Gen 2
      • 256-bit vs. 96 bit
      • UID embedded in EPC number
      • Rewritable (DoD) vs. license plate (EPC)
    • Timeline
      • 4 classes of UID items at 2 depots (CA and PA) January 2005
      • Significant ramp-up across sites and agencies January 2006
      • All cases and pallets, plus all UID items January 2007
  • Wal-Mart’s Impact on Supply Network
    • Wal-Mart requires UPC
    • Other retailers follow
    • Grocery introduces UPC
    • Grocery completes adoption
    • Wal-Mart requires I 2 of 5 case level barcode / UCC 128 (mandatory by 7/92)
    • Other retailers follow
    1978 1983 1986 1991 1978 1982 1986 1990 1994 1998
    • Wal-Mart requires Pallet and Case RFID
    • Others follow
      • Target? Home Depot?
    2003 2004 2005 2006 2007 2003
    • RFID adoption timeline expected to be shorter than UCC
      • Decreased technology adoption cycles
      • Roll-out infrastructure in place
        • (WMS, standards groups, etc.)
    • Early Wal-Mart compliant companies had advantage for 4 years
    1995
  • What Can We Learn?
    • Early and Late Adopters
      • Early adopters created opportunity
      • Late adopters lost business
    • Early Adopters Require a Vision
      • We Don’t Know What We Don’t Know: experience will drive additional learning
    • Operational and Technology Migration Path is a Requirement to Success
      • Stone Age to Star Wars Generally Does Not Work
      • Phased implementation plan is critical
    • Technology and Acceptance Will Follow at an Accelerated Rate
      • Results easier , Quicker Adaptation
      • Terminal cost, chip cost, wireless on a chip
    • External Client Requirement Will Drive Innovative Internal CGM Benefit
      • Wal-Mart encourages and rewards internally leveraged implementers
  • ClearOrbit Highlights Excellence from Experience
    • Founded in 1994, headquartered in Austin, TX
    • Operations in North America and Europe
    • Privately held, growth funded by operations
    • Customers include more than 250 of the world’s leading manufacturers and distributors, such as Alcoa, Applied Materials, Canon, Cisco, General Electric, Motorola, Texas Instruments and Xerox
    • Solutions currently running at thousands of manufacturing locations serving tens of thousands of users
  • ClearOrbit RFID
    • Software to assist manufacturers and distributors in cost-effective RFID deployments
      • Hardware independent with device driver methodology
      • Integrated to ERP/WMS environment – minimal disruption
      • Allow phased approach
    • Partner with leading hardware integrators
    • ERP/WMS-specific implementation services
    • Natural extension of our heritage and expertise:
      • Track, trace and control
      • Leverage ERP data model
      • Focus on ROI
  • Transaction Context From this… To this…
  • Transition From Barcode
    • How will barcode and RFID co-exist within the same supply chain?
    • When to use barcode? RFID? Both? Neither?
    • How to deal with various customer requirements?
  • ClearOrbit RFID Enabled Products
    • Compliance Label Manager ( Outbound Compliance )
      • Manage label compliance and RFID compliance holistically
      • Dynamic printer selection, data selection, label format, tag format
      • Hardware driver methodology
      • No change to ERP or legacy applications
      • Configurable rules engine
      • Support for XML and Web Services
    • RFID Tracker ( Reader/Tag Management )
      • Read RFID tags and uses rules engine to execute ERP Transactions
      • Compatible with leading middleware (e.g., Savant)
      • Configurable rules engine
    • Collaborative Print Manager ( Inbound Compliance )
      • Drive Barcode or Tag Compliance at supplier shipping dock
      • Tag format and content automatically pulled from your ERP data
      • Web screen interface or API’s
  • RFID Tag Creation Simple Example XML Warehousing & Shipping Host Application/ Oracle ERP Generate Label or Tag ClearOrbit Compliance Label Manager XML File Printronix RFID/Label Printer
  • RFID Tag Creation Across the Internet XML Host Application/ Oracle ERP Generate Label or Tag ClearOrbit Compliance Label Manager XML File Internet CUSTOMER SUPPLIER Printronix RFID/Label Printer
  • Reading RFID Tags Applications from RFID Transaction Processor Information on deliveries loaded in truck ASN Information XML Receiving Inventory Inventory On hand Information XML RFID Reader XML RFID Reader RFID Reader XML Create ASN Receipt Create Cycle Count Entries Ship Confirm the delivery ClearOrbit RFID Transaction Processor Shipping ORACLE ERP
  • Value Proposition
    • Benefits to Customer
      • Lower risk by working with recognized experts
      • Rapid deployment through pre-integrated solutions
      • Future compliance / flexibility through a dynamic rules based engine
      • Extensible software platform allows for a phased business process deployment without wholesale reinvestment
      • Minimal impact to existing ERP configurations and workflows
      • RFID hardware vendor independence
  • ClearOrbit Addresses the Business Problems
    • Problem #1 - Lack of transaction context
      • Configurable, rules-based mapping to any ERP
    • Problem #2 - Transaction volume
      • Leverage existing technology; apply filters
    • Problem #3 - Lack of standards
      • Configurable, dynamic output management
    • Problem #4 - Transition from barcode
      • Allow both technologies to co-exist within supply chain
    • Problem #5 - Early market
      • Implement a hardware independent RFID technology platform
  • What recommendations do we have?
    • Be proactive in planning for RFID
    • Start with pilot applications
      • Evaluate “smart labels” as an option to pilot RFID in one part of your business (i.e. receiving) without impacting other parts
    • Gain understanding to shape requirements with your customer
    • Build a business case
    • The standards WILL change so be ready and don’t invest in proprietary technology
    • Work with experts
  • RFID-Enabled Supply Chain Connect RFID Hardware Control Module RFID Tracker Compliance Label Manager RS-485 Receiving Inventory Movement Manufacturing Packing Ship Confirm ERP or WMS Transactional System Bar Code Mixed Mode RFID Tag XML Direct Connect RS-232 or TCP/IP Reader Unit Reader Unit Reader Unit Reader Unit
  • RFID Hardware Functionality Connect RFID Tracker Compliance Label Manager RS-485 Receiving Inventory Movement Manufact-uring Packing Ship Confirm ERP or WMS Transactional System Bar Code Mixed Mode RFID Tag XML Direct Connect RS-232 or TCP/IP 1) Portal detects presence of tagged items RFID Hardware Control Module 2) Antenna sends signal to Hardware Control Module Reader Unit Reader Unit Reader Unit Reader Unit
  • RFID Tracker Connect RFID Hardware Control Module RFID Tracker Compliance Label Manager RS-485 Receiving Inventory Movement Manufact-uring Packing Ship Confirm ERP or WMS Transactional System Bar Code Mixed Mode RFID Tag XML Direct Connect RS-232 or TCP/IP 2) ClearOrbit RFID tracker maps the XML output to the proper transaction. 1) XML output indicating unique tag reads 3) Rules engine issues the appropriate transaction to the ERP Reader Unit Reader Unit Reader Unit Reader Unit
  • RFID-Enabled Receiving Connect RFID Hardware Control Module RFID Tracker Compliance Label Manager RS-485 Receiving Inventory Movement Manufact-uring Packing Ship Confirm ERP or WMS Transactional System Bar Code Mixed Mode RFID Tag XML Direct Connect RS-232 or TCP/IP
    • Benefits
      • Increase Throughput
      • Reduce Touch Points
      • Eliminate Mistakes
    • Process Touch Points
      • Automation of Cross-Dock and Putaway Processes
      • Create RFID Tag upon Receipt for Automated Putaway
      • Internal use through Inventory Processes
    Reader Unit Reader Unit Reader Unit Reader Unit
  • RFID-Enabled Inventory Connect RFID Hardware Control Module RFID Tracker Compliance Label Manager RS-485 Receiving Inventory Movement Manufact-uring Packing Ship Confirm ERP or WMS Transactional System Bar Code Mixed Mode RFID Tag XML Direct Connect RS-232 or TCP/IP
    • Benefits:
      • Overcome line of sight issues
      • Reduce errors and manual labor
    • Process Touch Points:
      • Automated Inventory Movement through sortation systems reading RFID tag, minimizing bar code placement requirements
      • Provides ability to store material in locations that are labor intensive for Cycle and Physical Count activities, or line of sight not available
      • Space optimization in gravity flow racks
    Reader Unit Reader Unit Reader Unit Reader Unit
  • RFID-Enabled WIP Connect RFID Hardware Control Module RFID Tracker Compliance Label Manager RS-485 Receiving Inventory Movement Manufact-uring Packing Ship Confirm ERP or WMS Transactional System Bar Code Mixed Mode RFID Tag XML Direct Connect RS-232 or TCP/IP
    • Benefits:
      • Improved tracking of items through WIP
      • Serial genealogy
    • Process Touch Points:
      • Attach RFID tag on reusable totes during assembly
      • Reader portal at each assembly step
      • Automatically trigger appropriate transaction -- WIP issue, WIP move, Batch Step Complete (OPM)
      • Alert worker to input quality info at appropriate time
      • RFID-enabled Kanban cards
    Reader Unit Reader Unit Reader Unit Reader Unit
  • RFID-Tagged Shipments Connect RFID Hardware Control Module RFID Tracker Compliance Label Manager RS-485 Receiving Inventory Movement Manufact-uring Packing Ship Confirm ERP or WMS Transactional System Bar Code Mixed Mode RFID Tag XML Direct Connect RS-232 or TCP/IP
    • Benefits
      • Customer Compliance – Wal-Mart, DoD, Tesco
      • Rules based configuration
      • Reduce manual scan for ASN creation
    • Process Touch Points:
      • Create RFID Tag at Case Level when Case Label (UCC128) is generated
        • Pack LPN
        • WIP complete to LPN
      • Create RFID Tag at Pallet Level when License Plate Number (LPN) is created
        • Pack LPN
        • WIP complete to LPN
      • ASN created as items pass through portal
    Reader Unit Reader Unit Reader Unit Reader Unit
  • Thank You!