the guide to RFID solutions
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  • 1. the guide to RFID solutions
  • 2. FOREWORD CONTENTS INTRODUCTION The institute has come to the end of Although the basic RFID technology just like every technology. It is very important for order to become more autonomous. The RFID the first phase of the RFID research TIBCO . . . . . . . . . . . . . . . . . . . . . . . . . INSIDE FRONT COVER has already been part of our life for the future of the RFID market that the readers will also become more intelligent and will and partner programme instigated on over 50 years, a majority of the expectations from this technology stay in the be able to form their own network and read your behalf in February 2004 where population has not yet taken its INTRODUCTION - INTL RFID BUSINESS ASSOCIATION . . . . 3 range of the feasible. Secondly, the possibility of different chip types and frequencies. we have brought together many of existence into account. The reason for integrating an RFID transponder into a product the industry leaders who are putting this is that the identification of goods for anti-counterfeiting, traceability and after To sum up, RFID offers many chances forward information to educate you as and products through the transmission INTEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 sales applications brings up the issue of privacy, and opportunities to improve processes if you do to the application of RFID within the of data is done via radio frequency which concerns a fair number of people. This a step-by-step implementation, if you use RFID in supply chain. and cannot be recognized by eye delicate topic is a psychological issue which the correct operational processes, if you accept only. Many of us, however, have PHILIPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 cannot be solved by introducing hardware tools that RFID is not a „plug & play“ technology, and In recognition of the importance of RFID already unconsciously used the called “transponder blockers” or “transponder if you understand its vast possibilities but also its and the technologies ability to transform supply advantages of this technology, e.g. neutralisers”. Only the physical act of destructing limitations. RFID will become part of our life: the chain operations in relation to visibility and SOKYMAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 by using a ski pass at a cableway the transponder would give the end customer sooner you start to make your experience, the security has been produced in station, by going through the access the certainty that it is not longer able to transmit better it will be. Don’t wait to start – take now the control at the main entrance of your euroRFID conjunction with our partners to act as a guide data. In my opinion, the privacy issue can only opportunity to explore the exciting world of RFID. to the industry and the many solutions now INFINEON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 office, or just by using your car key to be solved by informing end users about the available to you. Unfortunately some start the engine. limitations of this technology. RFID transponders Stephane Pique organisations were unable to meet the deadlines are not that simple that anyone can decipher for inclusion but the guide will be updated and X-IDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Meanwhile, today there are more than the information on your clothes while you are increased in size and content later in the year one billion RFID transponders on the market, used walking on the street. There are many technical and all partner information is available to in many different applications and markets. The limits that protect from abuses. In order to read members on our website. METRO GROUP – CASE STUDY . . . . . . . . . . . . . . . . . . . . . 12 majority are in-house applications called closed and decode the data stored in the chip, many system solutions, where the transponder is used different conditions have to be fulfilled, such as Stephane Pique TOSHIBA TEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 I would like to thank all our supplier only for improving an internal process and is not the right frequency, knowing the chip type, the partners and contributors for their assistance in used outside of the company. Typical closed structure of the chip, and last but not least the producing the guide and for the quality of the loop solutions are found in production steering, interpretation (= decoding) of the information. It Stephane has more than 12 years of experience in RFID AVERY DENNISON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 information put forward. quality control, asset management, access is worth remembering here the time when and is a worldwide recognized expert in this field. His control, warehouse management and internal privacy was a discussion point with mobile business experience brought him to the unique position The RFID programme will be ongoing logistics. Those early adapter companies saw a phones. Today, nobody would renounce to their of knowing RFID from all necessary components such PRINTRONIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 throughout 2005-2006 and we will be keeping clear competitive advantage in implementing mobile phone just because they might be traced as the chip, the transponder and card, the middleware you regularly updated with all developments in RFID and are therefore not willing to publish their around the world. The convenience has and data management up to the complete RFID solution. the industry and solutions available. business cases and for sure not to speak about surpassed the privacy issue. With RFID I see a DATAMAX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Stephane worked with Philips Semiconductors for 8 return on investment. similar development within the near future, once years culminating in his appointment as business unit I trust that you will find euroRFID a valuable people will be more aware of the many benefits manager for the Identification market in Switzerland reference source when planning to implement RFID technology will not completely of RFID applications. PAXAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 and his role as member of the European core team. RFID. replace barcodes within the next few years, but During this time, he also represented Philips in the it will surely continue to be used where barcodes The next few years will be very exciting Swiss ISO standard committees. John Connors reach their limitations. Due to the major benefits for RFID. Additional standards will allow the CISCO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 of RFID, such as contactless and fast implementation of RFID worldwide and will allow Later he worked as International Sales and Marketing Director identification of good and the bulk reading companies to launch open system solutions in Manager for a Swiss RFID transponder and card capability, the implementation of RFID in supply high volume. New manufacturing technologies, ACCENTURE – JUMPSTARTING THE PHARMA CHAIN. . . . 30 EILT manufacturer, Nagra ID, which is part of the Kudelski chain processes becomes very interesting. such as with polymers, are promising and will be Group, the world leader in digital set top boxes. During the last five years, RFID technology awoke able to reduce the price of the RFID transponder In 2000, he moved to Philadelphia to develop the Global SAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 from its beauty slumber. Some major retailers significantly. Speaking about prices, today we ID business in North America and then returned to have identified the high potential that RFID have the classical chicken and egg problem. Switzerland at the end of 2001 to take over the represents for their supply chain processes; they The industry is waiting for the volume, and the responsibility of Vice President Sales and Marketing. HP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 have become major drivers that have led many market is waiting for the prices to come down. Global ID is a provider of complete ‘turn-key’ RFID other companies to also strongly focus on RFID The development is similar to that of personal solutions and part of the Sokymat Group – the world solutions. Meanwhile, the contactless technology computers: you can always wait for a better and leading manufacturer of RFID transponder. UNISYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 is now seen as one of the most promising cheaper one. Also, we can expect high volume technology trends of the coming years and is projects to go live within the next years, which will Since 2004, he is Vice President Business Development expected to change our lives just like mobile contribute to reducing the price of transponders DABAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 RFID at the German software and integration company communication has. dramatically. SEEBURGER and holds the worldwide responsibility on RFID. Nevertheless, RFID technology still has One of the major topics of the coming SIEMENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 some challenges to overcome. RFID is in its hype years will be integration: new systems will have to Stephane is co-founder of the “International RFID stage, which inevitably involves a wide be able to communicate with many different Business Association” and had speaking engagements spreading of faulty information. First of all, people existing in-house but also external infrastructures. EKAHAU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 All rights reserved. All trademarks and copyrights in this publication are recognised, and acknowledged where possible. If we have failed to credit your copyright then at more than ten major RFID events such as Frontline, must understand that RFID technology will not The transponder will be equipped with an please do contact us – we will happily correct any oversight. Any material submitted is accepted on the basis of a worldwide right to publish in printed or electronic form - RFID Forum, BVLA, BVL, EDIFICE, ID World, RFID solve every problem, as it has its limitations, too, increasing number of functions and sensors in be sure to clearly label all discs. All contents © euroRFID. The views expressed in this issue are those of the contributors and are not necessarily shared by euroRFID. Integration days and many more. 4 5
  • 3. 6 7
  • 4. RFID – DELIVERING VALUE ALL ALONG FOCUS – PHILIPS THE SUPPLY CHAIN product that doesn’t meet basic quality tagged animals in the reader field to be scanned regulations and endangers users’ health. simultaneously. The scanning of a single tag Additionally, copycat manufacturers undermine takes approximately 6 milliseconds. This prices, limiting legitimate firms’ ability to recoup technology is in use today, for example, in Spain research and development costs and reducing where 2,500 cattle farmers in the largest farmers’ the incentive to develop new drugs. However, association in the European Union are using it to using RFID, each dose can be uniquely identified, track 300,000 animals. The market for RFID tags which was The In-Stat report predicts that the Kaufhof said: “The biggest benefits of RFID are in guaranteeing quality and protecting both health worth around $300m worldwide last biggest segment in coming years will be in the inventory control, electronic article surveillance and profits. Around the world there is a growing year will be worth $2.8 billion by 2009, supply chain. Efficient supply chain EAS and checkout at the point of sale. With this interest in the use of RFID technology among research firm In-Stat has predicted. management on both item-level and system we can have complete visibility of the Medical practitioners are also looking at libraries. The demands of checking-in and out The figures come at the start of 2005, pallet/case-level results in a superior retail clothes throughout the journey from RFID technology to improve the quality, thousands of articles, as well as the need to an important year in the development experience for consumers, including: manufacturing to our department stores.” timeliness and cost of patient diagnostic tests. organize and be able to find item quickly places of RFID. Major retailers including Wal- With greater automation in pathology great demands on libraries. Contactless smart Mart, in the US, Tesco in the UK and • Improved on-the-shelf availability: In another key industry for RFID, smart laboratories, problems of recruitment and staff label tracking solutions using Philips Metro in Germany have announced Shelves of key items can signal an alert label trials with leading parcel services have shortages can be eased. In addition, with all the Semiconductors’ I-CODE technology have been that they will require logistics and for replenishment. achieved read accuracies of almost 100 data in electronic format from the start, implemented by some 200 libraries around the supply chain systems to have RFID • Fresher goods: Improved and controlled percent, compared to around 92 percent using integration of results into patients’ records is world. These include new libraries in Singapore technology implementation during logistics processes enable the more conventional technologies. Based on a typical quicker and simpler. heavily in resources for tracking animals designed to use the latest technology; the oldest the year. Retailers are only one of a rapid availability of products. figure of 50 million pieces per year, this represents throughout their lifetime. The U.S. government is Catholic University in the world at Leuven, near large number of industries which have • Anti-counterfeit protection: Certification a significant reduction in the number of In the United Kingdom, Proxximity currently reviewing a draft Animal Identification Brussels, which has implemented an RFID content recognized RFID offers them a huge that an item is what it claims to be. misrouted parcels. These trials also demonstrated Systems Ltd. has developed a system using Plan. In addition, legislation such as that management and security system for its library competitive advantage. • Transactional speed: Shortened the mechanical reliability of smart labels, which Philips’ I•CODE RFID technology to accurately adopted by the European Council of Ministers for and others in the UK, the Netherlands and Korea. checkout. are far more physically robust than other track blood samples. In initial trials at the the individual tagging of sheep and goats using Philips Semiconductors has been in the solutions, which can be difficult to read when Pathology Laboratory of the Portsmouth National RFID technology is expected to further its Demand for RFID solutions will require RFID market since 1988 and was the first to affected only by simple scratches. In fact, the Health Service Trust, Proxximity’s BioTag Positive adoption. continued investment in the development of this release an IC compliant with EPCglobal HF Class stability of an RFID label ensures they can still be ID System has already shown major reductions in technology to meet the needs of various 1 (Electronic Product Code global), a worldwide read even when covered, for example, with administration time, both during sampling and Philips offers RFID technology with a industries. Whether the demand is to ensure a standard driving RFID’s universal acceptance. packing tape if the parcel had been damaged laboratory processing. With more than 100 million substantial read range over distances and a high favorite product is stocked on a store’s shelves or With over a billion RFID-based chips sold to date, and repaired at some stage blood tests performed annually in the UK and transmission speed, especially for enabling protecting food and pharmaceutical quality or Philips Semiconductors is the world’s leader in the more than 3 billion worldwide, the potential accurate, automated livestock tracking to help enabling people to borrow a popular book. design and manufacturing of contactless chips RFID also provides its benefits along the rewards from streamlining this process are provide the basis for secure food supply chains to used in smart cards, smart labels and tags as well manufacturing process, such as at Toyota for immense. the end consumer. For example, a cow fitted Philips will continue its involvement in as in car access and immobilizer systems. Philips’ instance. Toyota implemented phase two of its with a Philips HITAG-S-enabled ear tag can be standards organizations to guarantee that the RFID-based technology is used across a diverse RFID Vehicle Tracking System (VTS) at its South In addition to streamlining the supply identified from the rest of its herd as it passes by implementation of RFID technology is regulated set of applications – such as supply chain African vehicle production facility. VTS, which chain and making medical applications safer, an antenna-fitted gate. Information pertaining to and privacy issues are addressed. The company management and logistics functions, including uses Philips’ I•CODE read/write tags, tracks cars RFID can also protect consumers’ health by that animal – including vaccination records, will also work to ensure that customers pharmaceutical and livestock tracking, as well through numerous vehicle production stages, all ensuring the food they eat is high-quality. The genealogy and place of origin – can be stored understand the issues and benefits associated as in various transportation applications. One of the earliest adopters of RFID is the way through to final assembly. This function is livestock industry has experienced a number of on the chip and downloaded by vets, farmers with RFID and that system integrators and other German based Metro Group, the world’s fourth a significant landmark in RFID application, most problems in recent years with disease outbreaks, and officials alike. organizations understand how to best implement The company offers its RFID technology largest retailer with operations in wholesale, notably because of the use of both reusable and including foot and mouth and mad cow. As the technology to experience optimal effects as an open platform and is an active promoter of food, retailing, consumer electronics, DIY and disposable tags in the same installation. As a such, the farming industry has begun to invest The Philips system allows up to 200 and protect their customers’ and their own global standards to build the foundation for department stores. In addition to the use of result, fitment and distribution planning greatly private data. widespread adoption. With new applications in Philips RFID technology in their Future Store in improved and required business information was the consumer retail market on the horizon, Philips Rheinberg, Germany, also their subsidiary, received in a timelier manner by distribution Philips RFID products for supply chain has already built a complete catalog of RFID- Kaufhof Warenhaus AG, together with fashion yards. management and related applications: based chip solutions that spans the application brand Gerry Weber has recently completed the range of smart labels, contactless smart cards, first trials of RFID for individual item tracking. Similarly, the pharmaceutical industry Philips specific chip portfolio for smart car immobilizers and the corresponding reader relies on the integrity of many forms of data. From labels / tags and readers covers all relevant components. In the trial clothes carrying the Gerry initial drug trials to production and distribution, frequency bands including 125 KHz, 13.56 MHz, Weber label were delivered from the RFID’s ability to ensure the validity of data within UHF and 2.45 GHz. Major application areas for Philips is also working with privacy manufacturer to two outlets via Kaufhof’s the pharmaceutical industry is providing many ICODE, UCODE and HITAG ICs are supply chain organizations and government officials to ensure distribution centre. The aim was to improve the new opportunities to reduce costs while management, logistics and retail, livestock a responsible rollout of RFID in the retail interaction between Kaufhof’s suppliers and its improving both drug safety and the quality of tracking and car security systems. As a driver in environment. In addition to participating in logistics hub. RFID labels – based on Philips’ products. standardization issues, products meet industry dialogs on the topic of RFID and ICODE ICs – were attached to the clothes at the corresponding standards, including ISO 15693, consumer use, Philips has included a manufacturer and tracked to the point of sale at The high cost of many modern ISO 18000, ISO 11784/85 and ISO 14223/1 as well disablement feature in chips that enables the which time the labels were removed. pharmaceuticals makes these products a as upcoming products will meet the EPC deactivation of smart labels when it is desired. natural target for counterfeiters. Counterfeiters standard. Uwe Quiede, project manager, RFID, can supply the market with a substandard 8 9
  • 5. FOCUS – SOKYMAT SA Soktmat: +41 21908 0100 packaging material), prelams, wristbands, and chips, sizes and types of packaging that can be CCD labels (used mainly in DVD rental stock adapted to meet various types of requirements management). and to produce customized transponders. The Food and Animal division develops A state-of-the art tracking and sorting and produces a wide range of full-duplex (FDX) system using Sokymat’s Logi TAG family of RFID RFID transponders designed to identify individual transponders is being adopted across the animals. The product portfolio includes both laundry industry as the ideal solution to upgrade standard and customized transponders such as and gradually substitute Motorola’s process glass tags, disc tags and electronic units automation system. developed for identifying livestock, pets, fish and exotic animals. All these products comply with Until recently, it was not possible to the ISO standards defined for animal consider the application of RFID transponders on identification (ISO 11784/85) and have the ability to control the population of Pacific and Atlantic and within metal. Since 2001, Sokymat has to conform to any future legislation that might salmon, and zoos are using the tags to identify successfully worked together with its Japanese require the traceability of animals from “stall to their animals for internal management and partner Hanex Co., Ltd and has succeeded in steak”. exchange programs. The tags are also starting to making RFID technology work also in metallic SOKYMAT be used to prevent poaching and the environments. Another growth area for Sokymat is the exportation of endangered species and rare use of transponders to track fish and exotic breeds. Radio frequency identification (RFID) animals. Commercial salmon hatcheries, mainly technology applied to automotive tires: the key in Norway and Chile, use glass tags to collect The Industry & Logistics division offers an to the revolution in tire identification and supply data about breeding and growth patterns and extensive choice of transponders with different chain management. Sokymat was founded in 1964 in support which are logistics, access With the three business units access and Switzerland and in 1977, Åke control and animal identification security, food and animal, industry and logistics, Gustafson, co-inventor of the Tetra • 2003 – part of the Assa Abloy Group the company is present in all the major market Pack brick, bought the company, which focuses on current and emerging segments that express a strong interest in the which was manufacturing coils, micro identification solutions within the RFID benefits of RFID technology. By adding Cubit’s coils and the machines that produced and smart card markets. expertise in the area of 13.56 MHz RFID them. In the late ’80s, the company’s • 2004 – Sokymat, Metget and Cubit join transponders, Sokymat has acquired a business shifted from coils to forces under the name of Sokymat and competitive advantage on the side of transponders for animal identification. becomes one of the largest tag technology. Åke Gustafson invented the “direct producers in the world providing RFID bonding” technology, which solutions In addition, the company develops tags automated the assembly of a Sokymat has now a production for some unusual projects. For example, Sokymat transponder by soldering the copper capacity of 100 million. The company specializes worked with the U.S. Army to see if RFID tagged coil of the RFID antenna directly onto in RFID transponders and boasts expertise bees could detect landmines. And the company the pads of the silicon chip. This encompassing all areas of radio frequency supplied tags for Panasonic’s RFID-based enabled the company, which filed the identification, both in terms of frequencies personal inventory management solution for patent for the technology in 1991, to (125/134.2 kHz, 13.56 MHz and UHF) and in terms visually impaired people. The system consists of mass-produce cost-efficient of RFID system components (chips, tags, an RFID reader featuring an integrated voice transponders since the early ‘90s. antennae and readers). Thanks to its unique recorder and 50 differently shaped tags, know-how in packaging technology, the operating at a frequency of 125 KHz. The tags This was the start of a knew technology company is capable of designing and operate in virtually any environment, so they can and explains the very deep knowledge and manufacturing virtually any type of custom be used to identify bottled or canned goods, experience of the RFID world Sokymat has and transponder, perfectly suited to the specific frozen foods, medicines and clothes that can go the development of its own manufacturing lines operating environment and packaging material in washing machines. and patented assembly technologies that make requested by the customer - including metal. Sokymat transponders unique. Sokymat’s Access and Security division Sokymat, which employs 280 people develops and manufactures application-specific Milestone: worldwide, has both a research and transponders for access control, employee time development centre and manufacturing plants and attendance tracking, tickets for recreational • 1991 – first automatic production in Granges - Switzerland, Ronneby – Sweden and venues and public transits, and other security machine for transponders with patented Erfurt - Germany. In addition to its headquarters applications such as e-passports and direct bonding technology in Switzerland, Sokymat has offices in Australia, identification cards. Its product portfolio includes • 1992 – first generation of automotive France, Germany, Spain, Sweden, the United ISO cards (compliant with the ISO norm 7816-1, transponders for immobilisers States and the United Kingdom, and distributors type ID-I), clamshell cards, keyfobs, E-Units (the • 1998 – new structure with Business Unit to worldwide including in Brazil, Canada, Denmark, electronic units inside the laminated material – optimize market specific customer Italy, Japan, Singapore and South Africa. some suppliers buy the E-Units then add their own Part of this article first appeared in RFID Journal. 10 11
  • 6. IN CASE OF RFID: FOCUS – X-IDENT X-IDENT Company contact: Press contact: X-ident technology GmbH TEMA Technologie Marketing AG TECHNOLOGY Martin Vincenz Birgit Merx Kreuzauer Strasse 33 Theaterstraße 74 52355 Dueren 52062 Aachen Germany Germany Tel: +49 (0)2421 597-561 Tel: +49 (0)241 88970 -13 Fax: +49 (0)2421 597-327 Fax: +49 (0)241 88970 - 42 email: email: Most companies and organizations are Founded in 2000, Infineon Ident Solutions You-R® OPEN is a dedicated RFID Internet: Internet: aware that sooner or later they have to has grown to become one of the leading Operating System that links a company's face the integration of RFID technology suppliers of RFID solutions. Our expertise existing ERP landscape to the RFID- X-ident technology, supplier of X-IDENT TECHNOLOGY DEVELOPS ABOUT X-IDENT TECHNOLOGY (Radio Frequency IDentification) into their in this area has been proven through supported logistics system. You-R® OPEN intelligent tickets and labels, realised INNOVATIVE CARDS: X-ident technology GmbH belongs to business environment. Recent mandates successful RFID roll-outs in the textile, supports the entire RFID infrastructure – two projects that give an impression of 1,000,000 FLEXI PLASTIC CARDS FOR FRENCH SKI the Austrian Trierenberg Holding, one of the by major US and European retailers, the US high-tech industrial, automotive and from smart labels to readers, PCs and the variety of RFID solutions. RESORT world’s leading companies in producing paper Department of Defense and the FDA, fuel aerospace & defence industries. Our strong severs. This allows integrating RFID X-ident technology together with the for the cigarette industry. X-ident specializes in Italian system integrator Alfi, is equiping the laminating transponders in flexible paper and BEEF UP YOUR BUSINESS: the discussion about RFID being a technical team can draw on further RFID systems into a company's internal ERP technological revolution to innovate competences from a wide network of landscape using J2EE, Microsoft .net, http, Savoyens ski resort with a ticketing solution for film material which is marketed under the brand X-IDENT TECHNOLOGY WINS A CONTRACT FROM access control. More than one million tickets will name IQ-paper®. This includes self adhesive, BELL AG information landscapes and business wireless and software capabilities within C++, XML or PML programming. be produced, each with a security chip based electronic labels, tickets and tags for automatic X-ident technology GmbH has won a on HF technology from the French supplier, applications such as access control, item processes. However, as for every other Infineon. We are a major supplier into Furthermore it is possible to perform contract from Bell AG, one of the leading players Inside. Developed by X-ident technology, the management, automatic sorting, product revolution, it is essential to manage the public sector applications worldwide, and maintenance, diagnose faults and update in European meat industry. Deciding factors Flexi Plastic Card is the first card that meets the identification, process control and many more. risk that comes along with the transition. are an accepted security provider for the the software for the RFID hardware via a were X-ident’s experience and expertise, not demands on price, performance, security and RFID solutions have to link the real world US Department of Defense. remote connection. You-R® OPEN provides to the virtual representation in IT networks comprehensive tools and functions to only in electronics but also in paper and re-usability. This is why the French ski consortium X-ident technology offers the highest and systems. Due to the current RFID hype The Ident solutions team has the freedom develop, install, operate and maintain the adhesives. With this collective know-how, X-ident Espace Diamant, after critical examination of the quality standards, with every product the capabilities of this technology are to define solutions using the best and best fitting RFID infrastructure. was best able to meet Bell’s special requirement available products, chose to equip the affiliated undergoing a functional test. The company’s key often overestimated and cannot fulfil every most effective technology available on the that the labels be able to withstand very high resorts of Les Saises, Notre Dame de Bellecombe, to success is the core idea “solutions for systems”. expectation. Another aspect is the market. Being RFID vendor independent, Let us manage your and very low temperatures. Crest-Voland and Flumet with the powerful Flexi An experienced team of Radio Frequency permanent innovation cycle in the field of we can design tailor-made solutions and RFID infrastructure risk Plastic Card tickets. The impetus for the Identification (RFID) experts and specialists in the RFID and IT. provide full installation, operation and The success of RFID technology in The advantages for Bell: it is now possible development of the tickets can be traced back field of paper/film deliver conceptual ideas for logistics applications will depend on for Bell to record information such as date, batch to a new production process at X-ident. RFID solutions. For each segment, X-ident How to protect your infrastructure maintenance services worldwide. We its optimum integration – with all its number, production line etc. on goods arriving recommends partners: specialists for readers, from the slaughterhouse. Within the automatic The ticket will be given at the loan cost printers, system integration and software who investment long term? How to choose the partner with world leading large scale advantages and restrictions – into production process, this information can be used of ? 2,00. This amount is paid back after use and generate innovations based on identification right RFID technology and system to system integrators and enterprise existing logistics infrastructures. Our for controlling production and documentation. return of the ticket. The use of this handsfree card and information. X-ident has a current annual benefit from future innovations? Who will application software companies to create experience in the radio frequency Automatic operation, economy through is the only way to skiing within Espace Diamant production capacity of 160 million electronic be responsible when installed RFID best value for our customers. Our products reusability of the transport boxes without new resorts. For the future it is planned to expand the labels per year. systems do not perform like everyone and services bridge the technology gap protocols, IT and RFID logistics process labelling (saving of new information is possible) card’s functionality. promises? between innovative RFID technology manu management uniquely positions Infineon and complete traceability are the results of Further information is available at facturers and the large consultancies and as a single source provider of RFID system implementing RFID that secure a decisive Addressing the RFID system enterprise software companies. solutions. Our solutions are integration gap suitable for integration into a broad competitive advantage for Bell AG. Ident Solutions (RFID) at Infineon A Unique RFID IT landscape and are designed for Technologies, an established Top-5 System Integration Platform simple and trouble-free introduction of semiconductor supplier and worldwide You-R® OPEN is the unique RFID OPerating RFID technology. market leader in security chip card ENvironment and system products, focuses on successful RFID integration platform. It operates as a solutions including system integration, “translator” between the heterogeneous products and services in supply chain RFID components and complex IT land- management and lifecycle asset scapes, from SAP modules to proprietary management. software systems. Infineon Technologies AG, Ident Solutions (RFID) Address: P.O. Box 800949, 81609 Munich, Germany Tel: +49-89-234-81279, Fax: +49-89-234-81130 Email: Website: 12 13
  • 7. CASE STUDY – METRO GROUP RFID INNOVATION CENTER Intel, SAP, IBM, and some 40 other collaborators solution elements, how the challenges were met, information, thus increasing staff productivity from the IT, consumer goods, and services and the actual impact of these solutions on and customer satisfaction. Staff use the PDAs to IN SHAPE industries1, METRO Group launched its Future customers and on competitiveness. access business intelligence, to check stock Store Initiative in September 2002. The project levels, to request item information, to trace goal was two-fold: first, to bring together the best goods receipt, to replenish goods directly on the BEHIND-THE-SCENES ELEMENTS: FOR THE of retail merchandising and retailing technology shelf, for price marking, to change messages on in support of each other; and second, to test the LOWERING OPERATING COSTS AND OPTIMIZING electronic advertising displays, and to manage new solutions in an actual retail environment. For INVENTORY customer requests. FUTURE OF the first time, the technologies which will shape Some elements of the METRO Group the retailing sector in the future would be Future Store Initiative are unseen by the Employee Portal: Staff members have in- combined and tested under real-world customer, and lower costs by increasing the store access to the ‘myMetro’ employee portal. RETAIL conditions. “Retailing is undergoing a efficiency of the delivery chain, from supplier to Based on SAP technology, the portal is accessed fundamental modernization process,” says Dr. warehouse to back-store to product shelf. using back-room information kiosks.3 This gives Gerd Wolfram, executive project manager of the employees ready access to company Future Store Initiative at METRO Group. “The Radio Frequency Identification (RFID): information, scheduling, notices, and training. METRO Group Future Store Initiative represents one of the core elements of the METRO Group the convergence of traditional retailing and Future Store Initiative is the extensive use of RFID. Tablet PCs: Fully functional, wireless- emerging technologies, as a strategic initiative. The RFID goods flow solution uses standards- enabled tablet PCs4 allow staff real-time access CHANGE ON THE HORIZON are demanding more and more information TAKING ACTION The objective is to advance innovation in based RFID tags as the next generation of to their applications throughout the selling floor. Retailers are increasingly aware that about the products and services that a retailer METRO Group is the largest retail group retailing on an international basis and to increase barcode technology. This provides visibility into Enabling staff to spend more time on the selling emerging technologies are offers – in all types of retail environments. At the in Germany and one of the largest retailer in the customer satisfaction.” By launching the inventory in the store and throughout the supply floor increases customer contact and customer indispensable in meeting the grocery store, customers want information about world. It operates 2370 stores in 28 countries Initiative, METRO Group took over a leadership chain. Product is RFID-tagged at the pallet and satisfaction. challenges facing them. Multiple new the origin of meat and fish products. At fast food across Europe and Asia, which generated more role for the entire retail sector. carton levels by suppliers, by distribution partners, technologies are poised to change locations, customers want information about the than €53 billion annual revenue in 2003. METRO or at METRO Group’s Essen Distribution Center. In-Store Wireless LAN: An in-store WLAN5 the industry significantly. Wireless nutritional content of various offerings. At Group wanted to explore how these emerging From there, all product movement is based on IEEE 802.11b enables all data technologies and the increasing electronics stores, customers want to know technologies might change retailing. The MULTIPLE OPPORTUNITIES, CLEAR automatically tracked by RFID scanning gates. communication for PDAs and Tablet PCs, as well power of low-cost platforms for in- details about compatibility, usage, and the company particularly wanted to explore wireless, GOALS Scanning takes place when product leaves the as numerous customer-facing devices, such as store and warehouse use will change features and functionality that a product offers. radio frequency identification (RFID), and rich With many new technologies distribution center, as it arrives at the delivery Personal Shopping Assistants, Information retailers’ business practices – and Emerging technologies hold a key part of the content delivery technologies. At the outset approaching market-readiness, METRO Group area of the Rheinberg store, whenever it leaves Terminals, and Electronic Advertising Displays. even business models. The promise of answer to these challenges. Which technologies METRO Group was determined to assess the wanted to explore a number of them in an or enters the back-store area, and on the shelf Over 120 in-store devices are connected via the these technologies is lower costs, to deploy, and how to deploy them cost- impact of these technologies on relationships integrated fashion. Before starting the design of itself. This allows instant inventory management WLAN. more efficient supply chains, and effectively, are the questions. with their customers and suppliers. Together with the Future Store Initiative, METRO Group throughout the supply chain. Using this solution enhanced shopper experiences. established a set of clear goals: greatly simplifies ordering, delivery, and Server Hardware: Application servers6 There is little disagreement about warehousing of merchandise. Realtime visibility are 2-way and 4-way systems based on Intel® whether the changes will occur, and a • Utilize technologies to enhance the of stock levels allows tighter management of the Xeon™ processors and Intel Xeon processors MP. wide variety of potential solutions are shopping experience and measurably supply chain by management, in-store staff, and The modular design of these servers allows coming into the market. But many increase customer satisfaction suppliers. Based on open standards, RFID systems flexible and cost effective scaling of the server questions remain about when and • Utilize technologies to lower selling and are integrated with many different IT infrastructure as requirements grow. how they should be implemented. operating costs applications. This allows METRO Group to Broad adoption of new technologies • Explore how wireless technology and optimize inventory management and greatly Content Bus: The Extra Future Store has by a retailer is a formidable RFID can increase competitiveness reduce lost sales due to out-of-stocks. 20 separate applications that use content, and undertaking that carries significant • Explore ways to bring richer information designers realized that managing complex risk. to shoppers in compelling forms Smart Shelves: RFID readers built into content over multiple devices and applications • Increase employee productivity display shelves allow automatic tracking of would be challenging. The team developed the But as margins continue to get thinner, Working with its key partners, METRO placement, removal, and misplacement. The so-called “Content Bus” based on PIRONET’s retailers are compelled to employ new Group was able, over a period of seven months, Smart Shelves are linked to the central RFID Pirobase* content management system. The technology solutions to reduce operating costs. to design and implement the first “store of the goods flow control system, and automatically content bus integrates structured and Retailers are under relentless pressure to future” at its Rheinberg, Germany “Extra” brand notify staff when product needs to be unstructured information, and constitutes a streamline processes, increase the effectiveness location. The Extra Future Store reopened in April replenished or refreshed. central information source for applications and of sales and marketing programs, and share 2003, and included multiple new elements. media output within the store. information in real time across store, channel, Though it works seamlessly now, getting these Employee Personal Digital Assistants and system boundaries. Managing inventory well technologies to work together effectively was (PDAs): Wireless PDAs2 allow staff to instantly is vital. Getting key products on the shelf and the challenge. The following sections discuss the connect to store systems to request and provide turning inventory at or above plan is what makes or breaks a retail operation. 1 For a complete list of participating companies, see 6 All application servers are HP Proliant* systems. 12 Intelligent scales supplied by Mettler Toledo; “Veggie Vision” developed by IBM. 7 Loyalty card solution developed by Loyalty Partner GmbH.. 2 Wireless PDAs are based on Hewlett Packard’s iPaq* and 13 For more details on the Intel technologies used, see the 8 Wincor Nixdorf developed the overall PSA solution, based Symbol’s PDT-8100 with Windows* PocketPC* 2002 operating Solution Blueprints at At the same time, competition and system. on Fujitsu-Siemens Stylistic* 4110 tablet PC powered by the Mobile Intel(r) Pentium(r) III Processor M. 14 For more information on Auto ID Infrastructure, see customer expectations are both increasing, 3 Employee portal kiosks supplied by IBM. 9 The shopper’s location in the store is determined by a 4 Tablet PCs supplied by Fujitsu-Siemens triangulation system that analyzes the PSA’s signal strength. 15 Extensive measurements of customer usage and motivating the search for creative solutions that satisfaction were performed by Boston Consulting Group. 5 In-store wireless network and access points supplied by 10 Information terminals solution supplied by IBM. Full results are available at deliver a better shopping experience. Customers Cisco. 11 Electronic shelf labels developed by NCR. 14 15
  • 8. CUSTOMER-FACING ELEMENTS: store9), and can search for in-store product Customers can also sample CD music tracks and HP, Procter & Gamble, Kraft Foods, Henkel, success depends on solid project management ENHANCING THE SHOPPER’S EXPERIENCE locations. The PSA can be personalized for the DVD video clips. Gillette, and Coca-Cola, among others. and just plain hard work,” notes Dieter Kilian, Attracting customers requires making shopper by use of the Smart Loyalty Card: the METRO Group Future Store Initiative Project the shopping experience convenient, engaging, shopper scans the card into the PSA, which then Electronic Shelf Labels: Shelves are fitted Manager for Intel. For example, one of the “use and customized. From the beginning, the design displays shopping lists pre-selected from the with centrally controlled electronic price labels,11 INTEL AND METRO GROUP FUTURE cases” (an envisioned activity) required that of the METRO Group Future Store Initiative was METRO Group web site, suggests items based on connected through a dedicated wireless STORE INITIATIVE: A PLAN AND AN when an employee updated a price using a approached from the consumer’s perspective. previous visits, and displays special offers based network to METRO Group’s central pricing ARCHITECTURE PDA, that price update would be reflected in the Their in-store experience is a composite of on the customer’s personal preferences. system. Price changes are automatically Intel and METRO Group had a POS system and on the in-store multimedia merchandise, display, displayed on the longstanding relationship, and had worked displays. Making that happen involved pricing, location, store shelves and in the together on enterprise solutions before. In the integrating with Oracle’s 9iRAC* database, with ambiance, access to POS system, making early stages of conception, METRO Group asked PIRONET’s Pirobase* Content Bus (to feed the information, exposure to pricing updates Intel to help create a plan for incorporating RFID multimedia displays), with NCR’s Electronic Shelf promotion, check out, instant and reliable. and WLAN technology into a future store Labels, and with IBM’s POS system. and knowledgeable and concept. Intel invested US$4 billion in R&D in helpful staff. Also, each Intelligent 2003, and actively drives transformative business The METRO Group Future Store Initiative shopper is unique, so any Scale: Customers processes and technologies in numerous industry is built, frontto-back, on hardware and software capability to tailor or tune weigh produce using sectors, including Retail. Under a 3-month products that are based on Intel architecture. these elements to the intelligent scale,12 contract, solution architects from Intel® Solution Intel architecture offers a standards-based individual shoppers will which automatically Services (a professional services organization building block approach, with high further enhance the recognizes the fruit or focused on architecture transitions) created a performance, low cost, standardized shopper’s experience. vegetable being common solutions framework, and documented components. This results in the greatest flexibility Many elements of the weighed and prints both store and supply chain solutions. This set the and very attractive price/performance. METRO Group Future an adhesive stage for METRO Group’s Future Store Initiative. Store Initiative are product/price label. Key elements based on Intel customerfacing, and The image Once the METRO Group Future Store architecture include:13 bear directly on the recognition system Initiative was launched in summer 2002, Intel was customer’s experience. uses color, size, and involved in the overall technology project • SAP application servers: 4-way rack- texture to identify the management. This included recruiting and mount Intel Xeon processor-based Smart Loyalty item. managing the technology partners; developing servers, 4-way Intel Xeon processor MP- Card: An intelligent detailed project plans and working packages; based servers, and 2-way Intel Xeon loyalty card7 allows the Self-Check- and defining milestones, deliverables, and processorbased blade servers. customer to begin out: Customers have project success metrics. Here, Intel’s broad • PDAs: Based on Intel Personal Internet shopping before they two options for network of relationships came into play. “We Client Architecture (Intel PCA) enter the store. Using a selfcheck- out. They have a unique, catalyzing role within the IT processors. unique number on their can use a self-service industry,” says Jon Stine, Intel’s Global Industry • PSAs: Based on the Mobile Intel personal card, a shopper lane, which utilizes a Manager, Retail-Consumer Packaged Goods, Pentium(r) III Processors – M. can use the METRO user-friendly “and our investments in the retail sector are • Content Bus servers: 2-way and 4-way Group web site to select touchscreen, a sizable. So our network of working relationships Intel Xeon processor-based servers. goods that they plan to scanner, and a with hardware, software, and services vendors • Electronic Shelf Label system servers: 2- purchase in-store. This payment terminal. focused on retail is very large.” way Intel Xeon processor-based servers. electronic shopping list is Or, if they have pre- • RFID readers: Based on Intel PCA linked to their card scanned their items Intel had deep relationships with many processors. number; when they scan using the PSA hardware and software vendors poised to take • Network: Based on Intel Internet their loyalty card into the Personal Shopping Electronic Advertising Displays: Multiple barcode reader, they can “pay in passing” by advantage of the advances in store, wireless, Exchange Architecture (Intel IXA) Assistant mounted on the shopping cart, the list is 19-inch displays are mounted above product using the PSA’s “check-out” function, which and RFID technologies. Intel alsohad relationships network processors. shown on-screen. For the customer this means areas, and offer extensive information and transfers data from the PSA to the payment with key stakeholders in numerousleading • Desktop clients: Based on Intel Pentium 4 that selecting items can be done at home, but promotion using video and animation. In the terminal. consumer packaged good (CPG) companies. processors. they still have the flexibility of browsing in-store. drug, detergent, and snack areas, 42” plasma Intel utilized this network to attract the right • Laptop clients: Based on Intel displays run promotional videos and product participants into the project. Key technology Centrino(tm) mobile technology. Personal Shopping Assistants (PSAs): demonstrations. All displays are connected to MEETING MAJOR CHALLENGES WITH providers are IBM, SAP, Microsoft, PIRONET, Cisco • Information kiosks: Based on Intel Touch-screen tablet PCs8 mounted on shopping the Content Bus through the WLAN. KEY PARTNERS Systems, NCR, Wincor Nixdorf, HP, Oracle, Philips, Pentium 4 processors. carts provide shopping lists downloaded from The METRO Group Future Store Initiative Symbol, Fujitsu Siemens, Intermec, Mettler Toledo, METRO Group’s web site, product descriptions Information Terminals: Customer is an initiative of companies from the retailing, multiQ, Online-Software, and others. Key CPG and pictures, pricing information, and store information kiosks10 are located throughout the consumer goods, and information technology companies include Procter & Gamble, Kraft SAP AND RFID: “IN THEORY, IT’S maps. The PSAs also have a built-in barcode store, and provide customers with a wealth of sectors. In all, more than 40 different companies Foods, Gillette, Coca-Cola, Johnson & Johnson, SIMPLE…“ scanner; if the shopper scans items as they are information. The terminals can display a layout of have participated in the Future Store Initiative, Nestlé, and Henkel. With such a large number of Conceptually, RFID is straightforward: a placed in the cart, the PSA displays a list of items the store and show the exact location of any including consumer packaged goods collaborators involved, tight integration of passive antenna attached to an item gives item in the cart and their total cost. The PSA displays product. Shoppers can get product information, manufacturers, consulting firms, integrators, project plans was crucial to success. data to another device. In a real-world retail special offers and advertising (which changes product reviews, overviews of similar and service providers, and software and hardware environment, the practical issues are numerous. depending on the shopper’s location in the alternative products, usage tips, and recipes. companies. These include Intel, IBM, SAP, Cisco, “With a project this complicated, With extensive expertise in enterprise 16 17
  • 9. applications, and long experience in retail a superior consumer experience and an used the technologies a minimum of Real-time visibility of stock levels allow tighter retail decisions (such as floor planning and shelf settings, SAP understood this coming into the enhanced supplier and employee experience.” one time. management of the supply chain by allocation) by providing real-time access to sales project. “In theory, RFID is simple,” says Thomas • The majority of them indicated that they management, in-store staff, and suppliers. The and inventory data. Riehmer, Strategic Support Manager for SAP’s Once the project was launched, IBM are "highly satisfied” with the store. labor cost of inventorytaking has been greatly Retail Group. “But not surprisingly, in real was responsible for overall systems integration for • Particularly the Self Check-out and the reduced. Stock-outs have been reduced, and Higher program productivity and applications, there are a number of issues that all hardware devices. All of the RFID components Personal Shopping Assistant are reordering can be automatic. Better inventory synergy: PSAs, multimedia displays, and must be managed.” SAP had been working on communicate through a single central hub, becoming more and more popular – management and better item identification information kiosks all promote cross-selling and pilot RFID deployments since 1999, and was one developed specifically for the Future Store with older customers as well. allow METRO Group to more effectively reduce up-selling, which increases revenue. Increased of the original members of the RFID Networking application. “This is an extremely flexible • Sales have increased considerably. shrinkage. The number of wrong deliveries (and business intelligence enables better product and Forum. For the METRO Group Future Store solution,” notes Bueker, “and this is the first time Increasing customer loyalty and the associated cost) ha been reduced. promotion decisions, as well as merchandising Initiative, SAP had responsibility for the overall that a complete network of this technology has increasing revenue per customer have always campaigns that are more effective and more RFID software architecture for inventory been integrated throughout one entire retail been key objectives for any retail operation,” Higher employee productivity and integrated. The introduction of new products management. store.” IBM’s integration expertise was key to says METRO Group’s Wolfram. “We are very better decisions: Putting the right information in and services has been streamlined. showing that RFID technologies have moved pleased with the impact of the solutions we’ve the hands of the customer (through PSAs, The first challenge was managing from the laboratory into reality, and can provide tested at the Extra Future Store.” multimedia displays, and information kiosks) frees Lower cost infrastructure: Basing the massive amounts of RFID data, not all of which is the cornerstone of an advanced inventory staff for other activities, including other METRO Group Future Store Initiative on the useful. “RFID data must be filtered to remove system supplying real-time information on store Greatly improved inventory customers. The PDAs and mobile PCs streamline standards-based building blocks of Intel both incorrect and repeated ‘reads’,” notes products and sales. IBM also provided the management: The RFID system can greatly in-store tasks, help sales representatives to architecture reduces total cost of ownership. Christian Koch, Director of Strategic Retail driver set and middleware are the foundation of customer information terminals, which integrate simplify ordering, delivery, warehousing, and respond to customer requests on the spot, and From PDAs to kiosks to mobile devices to PCs to Program at SAP. “Then it can be useful SAP’s new Auto ID Infrastructure application. 14 multiple applications to serve different placement of merchandise. Because the allow staff to spend more time on the selling floor. servers, Intel architecture-based products information.” SAP built the filtering logic into the The third challenge was creating the application departments, and the innovative “Veggie location of all products is known, the state of The Electronic Shelf Labels reduce the need for provide flexibility while maintaining enterprise- RFID reader drivers. Then the “clean” RFID data that would interpret the activity in the supply Vision,” which powers the intelligent scales in the inventory is known instantly, reliably, and at all staff to manage pricing updates manually. The class reliability and performance. Reducing the can be interpreted into business logic form. chain. SAP designed the supply chain event produce department. times. The location of any item anywhere in the real time inventory system enables better cost of IT solutions allows more solutions that add management application, which provides retail value chain can be known immediately. business intelligence, and allows faster, smarter business value to be deployed. The second challenge was integrating tracking, tracing, and analysis of system events. It the RFID feeds into middleware and the then delivers this business intelligence using user- HAPPIER CUSTOMERS, HIGHER SALES, enterprise inventory application. “You want the specific portals for management, in-store staff, LOWER COSTS RFID architecture and the enterprise applications and vendors. Since the Future Store Initiative was to be integrated in such a way that the back- deployed at METRO Group’s existing Extra store end business logic has a ‘long arm’ reach into in Rheinberg, new technology solutions have the RFID devices,” explains Riehmer. “For IBM AND RETAIL: BUSINESS PROCESS yielded positive, measurable results. Richer example, if an unexpected shipment arrives at AND INTEGRATION EXPERTISE customer experience: It is reasonable to assume the loading dock, the staff on the dock need to IBM has deep experience in systems that giving shoppers greater convenience, more know in real time that it’s not expected. That’s integration in the retail industry – making useful information, and more interaction would only possible if the inventory logic reaches a long complex sets of applications and devices work yield higher satisfaction, but the proof is in way towards the reader device on the loading together. IBM also has a 20-year relationship with measured results. The reactions and satisfaction dock.” This is accomplished by middleware that METRO Group. “IBM and METRO Group shared a of shoppers have been carefully measured15: connects every device, provides device common vision,” says Dr. Bernd Bueker, Retail management, and generates preprocessed Partner in IBM Business Consulting Services. “We • The number of customers has FOR MORE INFORMATION For information on SAP’s other activities BEYOND TECHNOLOGY PROMISE TO data to be handed off to the supply chain event wanted to create a consumer-driven significantly increased. Overview information and detailed and offerings in the retail sector, contact PRACTICAL POSSIBILITIES system and other enterprise applications. This environment for the store, focused on delivering • At least one-third of the customers have information about solution components within Thomas Rhiehmer at In its Future Store Initiative, METRO Group the Extra Future Store are available at, or see made a decision to pioneer promising in-store SIDEBAR – LESSONS LEARNED complicated. Having clearly defined goals will Work with technology partners who can technologies, on a comprehensive scale and in Build an RFID strategy now. RFID is help keep the complexity from growing, and deliver. In many instances, METRO Group faced a real-world environment. They started with clearly on its way to broad usage. If retailers do keep the integration team focused on the right the kind of significant technical challenges that Detailed Solution Blueprints for RFID For information on IBM’s other activities clearly stated business goals, and worked with not build a strategy now, they will be late in RFID activities. In order to determine if the goals are are inherent in first-use deployments. Working and Rich Content Delivery in retail settings and offerings in the retail sector, contact Bernd key partners that they knew could deliver. The deployment. “Even if it’s preliminary and is not being met, a retailer must define the success with partners that had deep technical expertise (based on the METRO Group Future Store Bueker at or see value of the technologies available today has followed by a pilot, it’s imperative that retailers metrics up front in the planning stage. and significant retail sector experience was key Initiative experience) are available at been proven by METRO Group’s experience begin thinking now about how wireless and RFID to solving these challenges successfully and since the store opened: new customers, will impact their business,” says Intel’s Kilian. This Expect new technologies to change quickly. Solid project management is essential. Wireless connectivity and some increased customer satisfaction and loyalty, strategy should comprehend current RFID existing business processes. For example, using For information on Intel’s other features may require you to purchase or higher sales per customer, lower operating costs, standardization, capabilities, and limitations. RFID tags on cartons caused METRO Group to Utilize the expertise that already exists. activities and offerings in the retail sector, download additional software, services or and increased business intelligence. From the have to change the methods by which they Many of the METRO Group Future Store Initiative contact your Intel representative or see external hardware. Availability of public beginning, efforts were designed to be scalable Base wireless and RFID plans on loaded pallets in the distribution center. On the partners developed proven solutions through wireless LAN access points limited. System within the METRO Group system, and plans are in succinct business objectives and set explicit selling floor, staff had to learn to access the Future Store Initiative experience. They also performance, battery life, wireless place now to roll out certain technologies of the goals. Convincing your retail organization to information from the merchandise formed key relationships with each other, For more information on Intel Solution performance and functionality will vary METRO Group Future Store Initiative in other invest significant resources in new solutions will management system directly at the shelf using resulting in synergies that will benefit many Services, Intel’s worldwide professional services depending on your specific hardware and METRO Group stores. require a solid business case with clearly mobile devices. To the extent possible, retailers. To tak advantage of work already organization, see software configurations. See defined benefits. Integrating wireless and RFID anticipate these process impacts. done, see the section, “For More Information.” for solutions into existing business processes will be more information. 18 19
  • 10. FOCUS – TOSHIBA TEC TOSHIBA TEC ANNOUNCES RFID AS ONE slowed down. In terms of product pricing and This catalog was presented to products as disposable plate, packaging and labeling RFID is already cost-effective, because approximately 20 Metro suppliers in the spring of hygiene products and decoration articles. the smart label can also be used simultaneously 2004, with the objective of realizing the usage of OF THE as an anti-theft device. The advantages and the RFID technology in the field of palette labeling in In close cooperation with the higher usage in material flow monitoring from the logistics area. The requirements catalog developers at TOSHIBA TEC in Krefeld, the production through warehouse administration, includes, amongst other things, the realization of firmware of the B-SX4 series label printer which IMPORTANT shipping and goods delivery and final sales are DESADV/NVE as information types in EDI. The was to be used was changed at short notice. In beyond any doubt. realization on the supplier side was to be the process, the data is integrated into the completed as fast as possible. storage area of the chip using a simple barcode STEPS IN NEW As a research and development command, in accordance with the EPC 1.19 platform for technical and process Thanks to the fact that the company standard. This means that expensive software MODERN developments, the initiative set itself the had already examined RFID technology in updating is not required, since existing shipping objective of defining unified standards and to depth, PAPSTAR was one of the very first unit numbers can be used as required. Together thus advance the international modernizing companies that were able to satisfy the Metro with the label manufacturing company X-Ident, TECHNOLOGY process in the retail trade. This is also true for the requirements in a short time. The company, from Dueren, the RFID tags were optimized to efficient use of RFID technology. Here, the which was founded in 1979 and has its meet the Metro requirements. At the test run in initiative developed a requirements catalog headquarters in Kall in the Eiffel region, is today October last year, PAPSTAR was already able to which is valid for Metro. one of the largest suppliers in Germany for the present the new technology and was the first The close links to the parent company The Metro Group Future Store Initiative is should be achieved. TOSHIBA releases an enormous a cooperative project between the Metro Group technological potential, which and SAP, Intel, IBM and other companies from For the Metro the introduction of RFID is a TOSHIBA TEC consistently includes in the fields of information technology and the decisive initial step towards exactly monitoring the further development of new consumer goods industry. As a research and and controlling the path of the goods along the products. The objective is to provide development platform for technical and process entire process chain, right into the warehousing trade partners with those products developments, the initiative has set itself the goal of the market or department store. This is true of and solutions which the modern retail of defining unified standards and thus advancing all warehousing for Metro, along with the branch trade requires to implement new the modernization process in the retail trade. In stores of the sales outlets Metro Cash & Carry, technologies into existing this way, the Metro Group FSI wants to play an Real and Kaufhof. organizational structures. The active role in shaping the retail trade of the partnership within the framework of future, developing today the correct solutions for RFID usage within the framework of the the Metro Group Future Store Initiative the challenges of tomorrow. In the process, the Metro Group Future Store Initiative is a major is a consistent step forwards for Metro Group FSI is a pilot project for the entire media theme currently, since the introduction of TOSHIBA TEC in the important process retail trade. In cooperation with reputable RFID technology opens completely new of advancing and actively designing partners the initiative is testing the perspectives for the retail trade. In future, RFID will the modernization process in the retail implementation and the collaboration of not only be used in addition to barcodes, but will trade. So TOSHIBA TEC is Silver Partner different technologies under realistic conditions. open up new fields of application which are of Metro Group Future store initiative In this way advantages for the customers, the simply not available to the barcode. The from now on. retail trade and the consumer goods industry progress of RFID technology can no longer be 20 21
  • 11. FOCUS – AVERY DENNISON Metro supplier to deliver in accordance with the Triflex horizon: We, Avery Dennison, leverage our core Metro specifications whilst taking into account competencies in high-volume, roll-to-roll manufacturing, the layout in accordance with the CCG pressure-sensitive materials science and RF antenna guidelines for EAN-128 transport labels. The design – the future is now. implementation took place without any complications and the PAPSTAR product range has since been fitted with the required RFID chips. The particularly easy programming of transponders by means of a standard barcode command is one of the outstanding features. This THE FUTURE IS facilitates the integration into existing software infrastructures. One absolutely new feature is the ‘head-up’ function: when an RFID transponder is NOW - THE being written, the print head is raised above the chip. In this way the transponder is in no danger of being damaged. DIMENSIONS OF In the project, PAPSTAR uses printers from TOSHIBA TEC, because these printers offer many THE RFID advantages. The B-SX series printers from TOSHIBA TEC are high performance industrial printers of the latest generation, characterized by high REVOLUTION power and reliability. They are fast, easy-to-use, compatible and convincing through a multitude of further functions such as internet capability, email, FTP and XML. Additionally, they are also fitted with barcode interpreters (BCI). The BCI function permits the operator to use competitor printers without the need for software For Metro, the introduction of RFID is a of competence at TOSHIBA TEC in terms of the adjustment. decisive step towards exactly monitoring and usage of modern information technology. controlling the path of the goods along the Thanks to close cooperation with TOSHIBA TEC, In addition, the B-SX4 and B-SX5 series entire process chain and right into the the Papstar company was the very first supplier printers are, unlike competitor’s printers, flexibly warehousing of the market or store in focus. This to the Metro to satisfy completely the HF or VHF compatible. Another decisive is valid for all Metro warehousing and that of the requirements of the Metro Group Future Store advantage of the TOSHIBA TEC B-SX4 printer is subsidiary stores Metro Cash & Carry, Real and Initiative with regard to the delivery of goods the new development of the ‘head-up’ function, Kaufhof. within the logistics system. whereby the print head is lifted over the chip to protect the sensitive smart labels. This also The successful introduction of the Metro The barriers to RFID are falling. and more accurately without having to locate a the future roll-out of RFID throughout the protects the print head. This represents an Group Future Store Initiative requirements not Retailers are deploying RFID barcode to scan. The RFID label consists of an manufacturer’s customer base. absolutely new feature from TOSHIBA TEC. only demonstrates once again the high degree technology in their supply chains and inlay with an antenna and a microchip inserted asking their suppliers to do so as well. into a traditional label construction, and The future is beginning to appear over Industry consortiums are defining communicates via radio frequency rather than the horizon of day-to-day reality as the number TOSHIBA TEC Europe has earned a Maintaining this philosophy TOSHIBA TOSHIBA TEC Corporation has a global standards and protocols to ensure optical scanning. RFID readers obtain of retailer pilots and trials continues to grow. The reputation as a leading manufacturer of retail TEC are producing products and solutions to turnover of 300+ billion yen through 72 offices, compatibility and limit adoption costs. information at key points in the supply chain by METRO Group in Germany, the world’s third and industrial information systems through allow the seamless integration of RFID employing over 13,000 people. Avery Dennison is at the forefront of activating the label through its antenna. An largest retailer, launched the first phase of their product development that aims to anticipate technologies into its current and future systems. the industry, devising new Electronic Product Code (EPC) is often stored on roll-out in November 2004. The declared aim of and uncover potential customer needs, The first step in this area is the launch of an Contact Data: manufacturing processes and RFID an RFID label. This is a unique number that can the RFID implementation is to localize the resulting in products that provide real value and upgrade kit for the new B-SX barcode printers. TOSHIBA TEC Europe Retail Information Systems N.V./S.A. label designs that will not only enable be thought of as a UPC combined with a serial logistical unit and the trading unit within the benefits to the user. This flexible approach will allow the products Remko Smaak the market to produce the high number. supply chain by automatically verifying incoming supplied now to follow the trends and European Sales Manager Identification & Printing Division volume required an affordable cost, and outgoing goods at distribution centers and As a total solution provider, TOSHIBA innovations in this developing field. Celideestraat 33 Rue de la Célidée but also ensure label success in a In addition to merely complying with the store’s warehouse and showroom and TEC Europe offers a complete package from 1080 Brussels variety of environments. retailer requirements, some manufacturers are automatically updating the inventory consulting and system design to system A member of the TOSHIBA TEC Belgium opting to implement RFID voluntarily for their own accordingly. In phase one, defined Metro installation, operation and maintenance of Corporation, TOSHIBA TEC Europe has financial Phone: +32 (0)2 410 21 00 More and more major retailers around internal benefit. These benefits include increasing suppliers are required to deliver pallets labeled electronic point of sale systems, electronic cash stability from one of the world’s leading Fax: +32 (0)2 410 79 87 the world are adopting RFID and asking their revenue by reducing out-of-stocks (“is it in the with an 869-MHz UHF tag, as per EPCglobal registers, electronic scales, barcode printers, technology companies, while still retaining the E-mail: suppliers to ship RFID-labeled cartons and pallets back room or is it on the store shelf?”), creating a standard class 1, bearing an EPC code to identify dot matrix printers, peripherals and software high levels of customer service and efficiency to enhance supply chain efficiency. Users will be competitive advantage by superior supply chain the pallet and its contents. By the end of this information systems. usually associated with smaller organisations. able to find, track, secure and count items faster management, generating a knowledge base for year, a larger number of suppliers, the so-called 22 23
  • 12. Top 100, are required to tag both pallets and Label performance is a complex issue SMART LABELS FROM SMART PEOPLE cartons delivered to Metro with UHF labels. In and difficult to predict; labels which function In response to this exciting opportunity 2006, the third phase will again step up the perfectly well when they are initially applied can and to ensure that we are well positioned to quantities needed considerably when sub- become unreadable due to the environment in support all the key players in this new market, carton tagging is required of each of the major which they have been operating. Avery Avery Dennison RFID has been established as a suppliers. Another project currently underway Dennison was able to design an RFID label robust new, separate division of Avery Dennison, which will bring new dimensions to the RFID enough for tough environments, improving the dedicated to offer a market-based portfolio of market was launched by the US retail giant Wal- read rate to a level approaching 100% while high-quality, high-yield, best-in-class RFID media. Mart in January 2005. Here, the first suppliers leaving the system and microchip unchanged. Our products will include 100 % good inlays and delivering to one regional distribution center are The most fundamental measure of RFID label labels with a focus on EPC retail carton and required to UHF tag either the pallet or the carton performance is the ability to read it at the pallet applications and a secondary and further expansion is planned throughout the necessary distance under a given set of concentration on item-level pharmaceutical year. These are just two of many pilots and trials circumstances. Several key factors impact read applications. We support these by leveraging our Avery Dennison is taking part in; projects that will distance: core competencies in high-volume, roll-to-roll drive the development of the market in 2005. In manufacturing, pressure-sensitive materials addition, companies like the French retailer science and RF antenna design. We also work Carrefour, Tesco in the UK, Target and Albertson ORIENTATION closely with our global Roll Materials sister division in the USA have all announced their intention to The likelihood of the RFID label who are already hard at work developing assess the potential of RFID. transmitting to the reader’s antenna is increased optimized pressure-sensitive label stocks that will if the label is readable from any angle. This also maximize the RF performance of our products. As the market for RFID grows, the Description: High-quality, 100 % read rate, best-in-class avoids potential logistical costs, e.g. requiring a bottleneck will not be chip supply - adequate media – Avery Dennison delivers innovative tag design for specific label placement on cartons. Whereas • We offer our RFID media products silicon foundry capacity already exists to satisfy ultimate reliability, Triflex many current RFID labels have blind spots in their through established, expert label potential RFID demands. The bottleneck will radiation patterns, Avery Dennison’s proprietary converters. However, to ensure that we rather be in RFID label assembly. A revolution in and communicate with the label, and hardware 3-dimensional antenna technology eliminates deliver robust RFID solutions, tuned to the the manufacturing technology for inlays is and software must be present and used to these blind spots. needs of the marketplace, we maintain necessary to deliver the “billions” capacity that interpret the data and enable communication close working relationships with all will soon be needed. The historical method of with other IT systems and/or people. members of the labeling value chain. RFID label assembly will not be able to meet the PRODUCT ENVIRONMENT • Avery Dennison is a global Fortune 500 emerging demand. Avery Dennison is • RFID labels (include a chip that is RFID labels must be compatible with the company, headquartered in Pasadena, developing a unique manufacturing process for attached to an antenna) products onto which they are applied. Metal, California; with operations throughout efficient, high-capacity label assembly. It is • Printers/programmers (to program the liquid and other carton contents can detune Europe, the Americas and the Asia- based on our experience and expertise in label chip and/or print the label) typical RFID labels. Avery Dennison has devised Pacific region. materials and web-based, roll-to-roll • Readers proprietary auto-compensating technology to • We are specialized in technologies that manufacturing, as well as on our heavy • Warehouse management system and address this problem as well. help businesses and consumers gather, technology investment in RFID inlay assembly. middleware manage and distribute information. Overall, the industry is working to meet the • Interface to ERP system • We have been a pioneer in pressure- demands, but supplies are likely to be tight for • A business process and operating SIZE OF THE ANTENNA sensitive technology ever since Stan some time to come. environment that enables and makes The antenna size impacts the read Avery invented the self-adhesive label in RFID label: an inlay with an antenna and a microchip use of the added information the RFID range significantly; when all other aspects are 1935. inserted into a traditional label construction, communicates But it is not only a matter of increasing label provides. constant, the smaller the antenna, the shorter • We have a track record of making via radio frequency. the production capacity for tags; standards the read range. That said, some packaging billions of high-quality, high- governing the technologies and protocols used The label must work in the in-house requires a smaller label and therefore a smaller performance labels for a variety of need to converge, a process which is already system and in the systems of the trading partners. antenna. electronics, industrial, automotive and bureau solutions for in-house RFID solutions partner in the METRO Group underway with EPCglobal defining the EPC code Label selection usually starts with deciding on a retail applications. labeling applications. Future Store Initiative and Innovation at 96 bits. New legislation covering frequencies particular frequency and protocol. Subject to Note that a smaller RFID label is not • We offer high-volume roll-form RFID • We are an approved carton-label Center. and power levels is also helping to establish this, the selected RFID label must minimize cost necessarily less expensive. The chip, not the label inlays and labels, as well as service provider for Wal-Mart and an RFID technical standards for compatible RFID systems. while offering a good performance margin. The size, is the major cost driver. All the RFID suppliers involved are integrating the two dominant factors in determining an RFID new-generation standards into their label’s performance are the chip used, and the Author’s Biography: Stan’s background is in semiconductors and electronics Avery Dennison components. End-users who were reluctant to design and construction of the antenna. RFID LABEL DURABILITY manufacturing, in functions ranging from engineering to RFID Division Europe invest in proprietary systems can now feel Because chip compliance and capabilities vary, Labels have to withstand different levels Stan Drobac marketing and business unit management. Before joining confident investing their budget in a lasting those implementing RFID should seek label of physical abuse, depending on where and Vice President of RFID Applications Avery Dennison, Stan was Vice President, Sales and Miesbacher Str. 5 technology. suppliers that are able to work effectively with a how they are applied. It is important to Avery Dennison Inc., Pasadena, CA Marketing, for Alien Technology in Morgan Hill, California. 83626 Oberlaindern / Valley variety of technologies. With new chip understand the environments that the label will Prior to that, he served in key marketing, technical and Germany introductions expected, RFID label users should see – and to work with RFID label vendors who Stan joined Avery Dennison as Vice President, RFID operational roles at Flextronics; nCHIP, Inc.; Advanced MAKE THE RFID SYSTEM WORK align with producers with strong in-house understand the traditional failure modes of labels Applications in October 2002. He is responsible for RFID Micro Devices; and Fairchild Semiconductor. He holds a +49 (0)8024 / 641 – 0 A functioning RFID system requires full antenna/tag design teams that can keep up as well as the added complexities associated product development, applications engineering, sales and BS in electrical engineering from MIT and an MBA from +49 (0)8024 / 6411-302 system compatibility. A printer/programmer must with industry developments. with the inclusion of RFID technology into the marketing. Harvard. import data to the label. A reader must detect label. 24 25
  • 13. FOCUS – DATAMAX RFID & BAR customers and your vendors, and RFID can help you streamline that interface. CODING: But have you reviewed your work-in- process or manufacturing floor processes? If you are required to implement RFID in your customer- WHERE IS THE facing applications, then streamlining backwards into your operations can provide you a more favorable cost-justification. Are you a JUSTIFICATION build-to-order facility? Why not use RFID tags on the manufacturing line to ensure that the FOR RFID? product is actually being built to order and allow customers to track it as it is being built? That information can be stored in a database accessed via an RFID chip on a bin that follows the item from cradle through to shipping. When the product is packaged, the bin is scanned and the RFID label generated for the packaging The best-case scenario for complementary based on current and expected Bar codes continue to have relevance material is cross-linked to that item’s entry in your requirement, you are most likely going to have to Advanced Shipping Notice (ASN) to ensure that implementing RFID technology costs, benefits, and expected uses. Bar coding is today and into the foreseeable future. Bar master product database. implement elements of an EPCglobal RFID the correct products were shipped and to requires the capability to control an excellent technology for tracking products or codes and RFID can work together to identify system. RFID technology can have many identify their proper location within the receiving many variables, both logistically and processes that don’t require individual and products or processes at a level of detail different performance capabilities. It is facility, distribution center or retail outlet. from an expectations perspective. unique item numbers, have a low relative value, appropriate for the characteristics of that important that the technology chosen is the most This can be a challenge, but RFID has or for items that can be easily scanned during product packaging level or process importance. appropriate version for the application. Most likely, the solution that is most the capability to create substantial the tracking process. RFID, on the other hand, is Whereas RFID can provide intricate detail about appropriate for your application or uses will be a benefits, including reduced costs and very appropriate for identifying products or a product or process, there are costs associated RFID can and should be exploited in combination of uses within several different time associated with tracking processes that need individual unique with that capability. Many times, the cost is too areas where the technology can assist in application areas. Trust Datamax to assist you particular products or processes. The identification, have a relatively high value, or high for the product or process to be identified reducing costs, errors, reliance on human through this process. Datamax specializes in the best-case RFID implementation require unmanned tracking capabilities. Your and the justification is not within reach. For these processes or a combination of all of those. design, manufacture, and marketing of products scenario is not developed in a supply chain management processes will applications, bar coding will continue to remain Multiple re-entry of information can be for bar code and RFID labeling including thermal vacuum, it depends on the type of certainly benefit from being able to uniquely the preferred technology. Bar code will also automated using RFID tags and an appropriate demand printers, label, ticket and tag materials, infrastructure either already in place identify a pallet, especially in this day and age of continue expansion into industries outside portal infrastructure. Review all paper based and thermal transfer ribbons. Headquartered in or that can be built to accommodate mixed pallets and LTL (Less Than Truckload) “normal” bar coding applications, including In order to create the necessary cost business processes to determine if there are Orlando, FL., Datamax has sales representative the technology. shipments. Streamlining the receiving process hospitals, law offices, banks, and nurseries. This justification internally, the implementation opportunities to incorporate RFID technology. offices throughout the United States, Singapore, can help remove many costs from the supply expansion will lead the way for more process must be phased sensibly. It will be Paper based processes don’t have to be China and the United Kingdom, as well as label This includes not only hardware, but also chain associated with labor, stocking, and sophisticated technologies such as RFID to important to understand all aspects of the eradicated, although electronic initiation can converting and preprinting facilities in Robinson, software or middleware to actually process the inaccurate data entry. Also, if your product relies penetrate these industries at a point far in the project, even if that project has a limited scope. begin to lead your company down that path. IL. Datamax markets its products exclusively data collected from the RFID application. Over on a brand name to maintain its value, the ability future. To incorporate RFID means to disrupt many Also, review human initiated business processes through a network of resellers in more than 100 the next few years, you can expect substantial to uniquely identify every unit with minimal different processes and establish new ones. for the same purpose. For example, every bar countries worldwide. improvements in the performance of many of invasiveness on the product or consumers must To create the cost justification that will Remember that the door nobody ever uses code scan on the receiving dock might be a the elements of an RFID tracking system, but not be very attractive to you. support RFID, you must be able to analyze a actually gets used quite a bit. As a bit of advice, human initiated process. Automating this process the type of improvements that would require situation and identify when conditions are prime establish spending thresholds, spending without provides for a beneficial by-product. As changing the laws of physics! The main question for implementing RFID technology. This requires cost controls is foolish. A pilot program with your products are automatically scanned upon facing many executives today is whether RFID substantial and objective analysis and the ability suppliers is one of the greatest learning receipt, the system generates a cross-docking technology can assist them in their operations in to undertake this process might seem like a opportunities that your company can undertake. report telling the receiving employee where Sarah Schabacker its current state. The answer to this question is a luxury. But, reviewing one’s processes should be The benefits from implementing RFID technology each item should go next to maximize products’ Datamax Corporation moving target and depends greatly on many an ongoing undertaking to ensure that your might be initially driven more by business process time in the distribution center. Business Development Manager factors including the price of RFID technology, organization is always as efficient as it can be. change than the technology itself. RFID will not and the expectations that the user has for the You probably have an idea where costs are solve process discipline failures, but it can To achieve the maximum benefits out of Sarah Schabacker has been working on developing new technology in a given application. accumulating within your facility. They are in certainly help highlight them. implementing an RFID technology, markets and technologies for the Auto-ID industry for 5 areas such as receiving where you are paying a manufacturers, logistics providers, distributors, years. Prior to her work with Datamax, Sarah worked Many stories in the press over the past lot of people to sort and scan each item that Remember that RFID does not equal and retailers must work together to share with Central Florida Innovation Corporation, an year(s) have latched on to the idea of RFID as a enters your space, inventory management, EPC and vice versa. It is easy to get caught up in information. Without this collaboration, any incubator established to promote high-tech businesses tracking tool and have declared the death of where you are paying more people to keep tabs this misconception but the fact is there are many individual company will be limited in the in Central Florida. Her work there included research to the bar code. To suggest that RFID will replace on your current state of goods in-house, and RFID technologies that exist today outside the potential benefits to be gained from using RFID support RFID and Real Time Locating Systems. Sarah bar codes is an aggressive and unrealistic shipping where mistakes can account for up to realm of EPCglobal. In most instances, these technology. Manufacturers will apply RFID tags began her career with Datamax in 2000 where she stance. It is not a good enough reason to cite 5% of your bottom line annually. These technologies will provide greater return on your to outer packaging and use that data to build currently manages several product lines and vertical historical adoption of bar codes as the only applications are ideal for implementing RFID, investment because they are more stable than pallets. This data should be sent via the logistics market development activities. Sarah graduated from justification as to why RFID will not replace the especially in a compliance environment. These the EPCglobal technologies. However, if your provider to the retailer or distributor so that Rollins College Crummer Graduate School of Business bar code. In fact, the two technologies are very are the applications that interface with your RFID implementation is a compliance incoming goods can be cross-checked via the with an MBA in 2000. 28 29
  • 14. FOCUS – PAXAR CORPORATION FOCUS `– CISCO SYSTEMS CISCO SYSTEMS - MAXIMISING THE THE CISCO SOLUTION: THE RFID-READY The Benefits of the Cisco RFID-Ready SUPPLY CHAIN WITH RFID READY NETWORK Network NETWORKS Cisco’s RFID-Ready Network is a tightly- A successful supply chain is driven by the Companies are finding that to achieve integrated wired and wireless network with the free flow of real-time information. By tracking the IMPLEMENTING long-term value, they need to unify their supply ability to classify ePC traffic to prioritize it status, location, movement, amount, and chains into a global, end-to-end supply chain, anywhere in the network. Cisco’s resilient and inventory of products, companies are able to from the factory floor to the store shelf. Offering robust networks support using and directing RFID maximize their sales opportunities and sustain RFID FOR end-to-end product visibility, RFID technology is information across the enterprise. By making such business growth. Cisco’s RFID-Ready Networks poised to revolutionize the supply-chain industry, information available throughout the support the power and agility of organizations significantly reducing costs and helping to organization, Cisco facilitates the complete seeking to add these capabilities to improve BUSINESS enable differentiation. However, companies supply chain that is proving so valuable to their ability to compete. adding RFID capabilities must also anticipate retailers, government, and industry. Based on new challenges in integrating this new data Cisco networks, companies are able to respond CONTINUITY collection technology into their current more quickly, track assets more accurately, environments: improve adaptability, and create a highly effective, sustainable end-to-end supply chain Network Availability and Scalability: The based on RFID technology. RFID system must have the infrastructure, including switching and data storage, to handle Rather than offering RFID technologies the new reader and software devices as well as as an isolated system, Cisco networks simplify their incremental traffic on the network. Growing implementation by adding RFID information as RFID builds on Cisco’s Intelligent amounts of critical item-level data will generate another data type to its already powerful Information Network in the same way as other thousands and, over time, millions of pieces of networks. Based on these proven network- network applications or data types such as voice information in the system, to be accessed, centric systems, inventory information is shared and video. The Intelligent Information Network is prioritized, and managed. among suppliers, partners, distribution centers, therefore critical to a successful RFID James Browning, Group Managing standards to ensure their supply chains are RFID The buck however does not stop there! and logistics. Cisco provides the expertise, implementation that is secure, manageable, Director of Paxar UK, a global leader capable. The industry needs to be prepared for What customers really require is an after-service, Additional subscribers: Users throughout experience, and a complete set of resources flexible, and scaleable. Cisco’s RFID-Ready in the identification and tracking of this change and now is the time that companies providing solid and accurate advice, 24 hours a the supply chain will need to access RFID needed to respond to today’s retail RFID Network will benefit multiple industries—including consumer products worldwide, need to start looking to the future. The day – addressing all RFID needs. The Technology information, including manufacturers, transport networking requirements. Users also take retail, manufacturing, government, defence, addresses the need for businesses to integration of RFID however is showing signs of Investment Protection Programme, does exactly and logistics partners, warehouses, distribution advantage of Cisco’s complete data, voice, and healthcare—around the world. adopt RFID into their supply chains improving, with the matter moving swiftly from this by meeting suppliers’ needs to implement centers, and internal personnel. and wireless capabilities over the same IP ahead of new compliance regulations the bottom of many boardroom agendas, to the RFID quickly and effectively, as well as comply network. Companies require RFID-ready solutions that will come into effect from January top. The bottom line remains however that a with stringent requirements to provide shipments Secure interoperability: Not only must that work transparently with existing 2005. large proportion of businesses feel daunted by with RFID encoded labels. Furthermore, the RFID tags transmit across vendors and partners, Network Availability and Scalability: infrastructures, can be implemented quickly and the thought of a new technology, and there is a Industry’s first ever express Service Bureau, the but data must be in common formats. RFID data Basing your RFID implementation on Cisco’s fully with the least business disruption, and will scale Over the last few years, Radio clear need in Industry to educate and guide the Monarch® Q-Service™, enables suppliers to must be secured across servers and networks to scalable, EPC-compatible open architecture with supply chain requirements over time. More Frequency Identification (“RFID”) has grown from retail industry through these difficult times. global retailers needing RFID shipping and pallet protect confidential information such as new allows large-scale implementations to grow to fit than 80% of the world’s Internet traffic already a luxury to a pure necessity for businesses labels to take fast delivery of these labels, product launches and financial information. the need of the organization. travels over Cisco equipment. Cisco’s RFID- worldwide. With the ability to read product RFID technology is only as beneficial to programmed with unique RFID data and printed Ready Networks are built upon the company’s details at different points in the supply chain and the client, as the provider of that technology. with barcode and human readable data. Maximizing analysis: RFID information Additional subscribers: The RFID-Ready 20 years of success in the technology industry. produce the information which can be used to Ultimately customers want a reliable and up-to- offers new opportunities to analyze and Network’s power and scalability also enables Grounded in our proven intelligent networks, the ensure that the right goods are delivered to the date piece of technology, a thorough The current changes in the RFID industry maximize customer information, as well as the complete access to RFID information across the RFID-Ready Network extends the power of Cisco right store at the right time, RFID enables retailers understanding on how to use it, and access to a means that retailers and suppliers need to flow of products throughout the supply chain. supply chain, accommodating changes in networks into the new RFID data type. The and their suppliers to reach 100% stock 24hr support service. change the way they work. Both retailers and RFID systems must be able to utilize existing customers, partners, products, and contracts. company’s unique history can also help accuracy, which in turn enables the distribution suppliers, and the companies who offer RFID systems and analytical software to optimize this companies reap the benefits of combining chain to maximise its efficiency. A comprehensive range of possible RFID solutions need to work together to ensure the information. Secure interoperability: Cisco self- advanced technologies such as IP solutions are available in today’s market to the transition is as easy and as successful as possible. defending networks provide encryption communications, wireless, and other The enhanced opportunities that can be prospective buyer. From the new breed RFID Companies are anxious to leverage technology that enables complete security on applications into today’s RFID requirements. afforded from RFID range from the ability to micro chip tags, for item level garment tagging, existing network assets, lower costs, and minimize wired and wireless networks. Services include capture data accurately, track items through through to the latest NVE-2-EPC Starter Kit, which Paxar Corporation (NYSE: PXR) is a global leader in the disruption to their business during total interoperability, confidentiality, integrity, the entire supply chain, maximise logistics and enables suppliers quick and effective RFID pallet identification and tracking of consumer products implementation of the RFID capabilities. They authentication services, non-repudiation Cisco Systems warehouse management, through to security labelling. Paxar’s innovative RFID garment worldwide. Paxar® products are used the world over also want to preserve bandwidth by keeping capabilities, and high availability. 200, Longwater Avenue and anti-theft and counterfeit. The breadth of labelling solution highlights the move from by leading apparel brands. Monarch® brand products decisions close to the edge, an especially vital Green Park solutions RFID can offer businesses highlights why boardroom brainstorming to working reality - are used by 90% of the top 100 U.S. retailers and their concern given the potential for staggering Maximizing analysis: Cisco’s standards-based Reading it is one of the fastest emerging technologies of allowing for tagging and tracking of individual supply chain partners to identify, track, and price all amounts of ePC-related traffic on the network. architecture supports and automates real-time data RG2 6GB auto-identification in the world. garments, for purposes of supply chain efficiency varieties of consumer goods. Paxar is a member of By 2010, reader populations may exceed 75 availability between RFID tags, readers, middleware, Telephone +44 (0) 208 824 3128 and in-store availability. EPCglobal, the agency managing the emerging million (Frost & Sullivan), meaning that the ability and systems including customer systems, analytic Email: From January this year, retailers and their standards for RFID. Paxar is a member of EPCglobal, to manage RFID devices will be critical. software, and inventory and warehouse management Andy Lee suppliers will face stringent industry compliance the agency managing the emerging standards for RFID. systems to shorten data analysis timelines. RFID Marketing Manager, EMEA 30 31
  • 15. CASE STUDY – ACCENTURE Following the objectives and basic require automation to achieve the desired • INCREASING PRODUCT SECURITY AND approach defined by Release 1, Group 1, this benefits from this technology. CONSUMER SAFETY – second group implemented the technology and The system provided individual unit worked through predefined business scenarios There are many issues yet to be serialization that has the ability to enable track- across 9 locations. addressed and much more work remains before and-trace functionality that could help prevent this technology and the resulting business counterfeit product from entering the supply From May through December 2004, applications are scaleable and ready for chain. nearly 2,900 units of tagged product flowed industry-wide adoption. through the supply chain. This initiative was a • INCREASING EFFICIENCY OF RETURNS “proof of concept” of RFID/EPC technology in • SATISFYING INCREASED REGULATORY AND RECALLS – the pharmaceutical distribution channel, and REQUIREMENTS – Since detailed information such as lot seen as potentially the first step towards broader The system effectively tracked selected number, expiration date, and transaction adoption of RFID/EPC across the value chain. This pharmaceutical products from the date/time/location is available for each report summarizes the findings of the manufacturer’s distribution facilities through the individual EPC, the project showed that the effort organizations involved in Release 1, Group 1 and supply chain to the point of dispensing, thereby to identify product location when processing Release 1, Group 2. helping to show their location in the distribution recalls and returns could potentially become less JUMPSTARTING THE channel and electronically capturing all complicated and labor intensive. KEY FINDINGS necessary “pedigree” information. However, the At a fundamental level, the project technology employed must improve significantly • INCREASING LABOR PRODUCTIVITY – PHARMA SUPPLY CHAIN achieved its objectives of demonstrating and the intra-industry information systems must When conducting activities that RFID/EPC’s potential to address industry needs as be built before this requirement can be satisfied. currently require bar-code scanning of each described below. In assessing the outcomes, individual item (such as shipping, receiving, or however, it is critical to once again note that this • SATISFYING INCREASED TRADE CHANNEL cycle counting), the project demonstrated the project was a proof of concept. REQUIREMENTS – potential of RFID/EPC to increase labor The project demonstrated the ability to productivity by allowing multiple items to be It was conducted in a very controlled manually tag pharmaceutical units and cases for scanned at one time. 1. MANAGEMENT OVERVIEW From October 2003 through September environment with a limited scope. As would be selected products to enable track-and-trace A group of companies across the 2004, the project team designed, tested, expected with a project of this nature, it included capabilities in a manner similar to those required Furthermore, since shipping and pharmaceutical supply chain came implemented, and verified a complete supply many manual processes that ultimately will in emerging retailer mandates. receiving would be more accurate, the together in 2003 to explore the use of chain solution. The principal objectives were to radio frequency identification (RFID) assess whether RFID/EPC could be used to help and Electronic Product Code (EPC) create a safe and secure supply chain, Retail technology—a pioneering effort in streamline reverse logistics, and increase the Pharmacy terms of its practical scope and accuracy and efficiency of distribution and industry breadth.1 This working group pharmacy operations. A scenario-based included the pharmaceutical approach was used to validate the solution, new manufacturers Abbott Laboratories, processes, and benefits against the related Wholesale Wholesale Retail Barr Laboratories, Johnson & Johnson, business issues. Regional Forward Distribution Pfizer, and Procter & Gamble; Distribution Distribution Center pharmaceutical wholesalers Cardinal In an eight-week test, preceded by an Center Center Retail Health and McKesson Corp.; retail eight-month design period, the 9 participant pharmacies CVS Pharmacy and Rite companies selected 10 products for the project, Pharmacy Aid; and industry trade associations working through 16 business scenarios in 15 including the Healthcare Distribution project locations. Nearly 13,500 units of real Management Association (HDMA) product were tagged, shipped, received, Manufaturer and National Association of Chain handled, tracked, and traced through the Drug Stores (NACDS).2 Accenture project’s system,providing the project with first- Retail served as program manager for the hand experience in working with tags and EPC Pharmacy group. reader technologies. As this group, known as “Release 1, Group 1,” progressed in their efforts, Together, the participants wanted to a new group of leaders in the pharmaceutical Wholesaler Retail assess the business value of emerging RFID/EPC supply chain formed a second collaborative Distribution technologies, standards, and processes, and to group, known as “Release 1, Group 2.” This Center work toward establishing an industry operating second working group included the Retail model that addressed pharmaceutical industry pharmaceutical manufacturers Merck, Novartis, Pharmacy business issues. The technology’s use had Sanofi-Synthelabo, and Wyeth; a gathered momentum and uptake in other pharmaceutical wholesaler Cardinal Health; and industries. The project team sought practical retail pharmacies CVS/Pharmacy and experience with RFID/EPC to explore its potential Walgreens. within the pharmaceutical space. 3 The above trademarks are used with permission. Figure 1. Defined Product Flow Path 32 33
  • 16. administrative effort to follow up on SIDE BAR 1: connected in a dynamic, automated supply RFID/EPC OVERVIEW shipment/receipt discrepancies may be chain that joins businesses and consumers reduced. It should be noted, however, that tag together in a mutually beneficial relationship. readability and reliability must improve significantly before this process is scaleable. RFID BAR CODING AND RFID/EPC There may be an incremental increase in the Radio Frequency Identification Bar coding is a line-of-sight labor effort required as a result of changing technology (RFID) is an advanced method to technology, meaning that each individual item systems and processes during the initial adoption collect product, event, and/or transaction has to be handled to scan the bar code with a of RFID/EPC data quickly and easily. Items to be tracked reader. In addition to being labor intensiveand are tagged with a small chip and antenna. time consuming, this method has potential for • INCREASING ORDER ACCURACY – When the tag is in close proximity of a reader, it error in reading the same unit twice or missing a RFID/EPC technologies can provide receives a lowpowered radio signal and unit because it is done at the item level, not the validation of shipment and arrival at different interacts with a reader exchanging serial number level. RFID tags enable points in the supply chain, thereby reducing identification data and other information. automatic, non-line-of-sight identification, over- or short-shipments of product, and Once data is received by the reader, it can be reducing the possibility of errors and the labor increasing customer satisfaction. sent to a computer for processing. necessary to achieve the same results. Although the EPC numbering standard The final sections of this executive EPC uniquely identifies products, its implementation that had been pre-approved for the clear base. 4. TECHNICAL DESIGN The team advocated a buy (versus summary further discuss this project’s findings. The Electronic Product Code™(EPC) is will evolve over time with applications driven by Matrics (who made the tags) and CCL (who The goal of the project was to determine build) approach, and sought components They also outline the considerable challenges an identification scheme for universally market and consumer demand. Therefore, bar converted the tags into the two-ply labels) were if RFID/EPC technology could enable and aligned with emerging EPCglobal standards and ahead that will require a concerted effort by the identifying physical objects via RFID tags and codes and RFID tags will coexist for some time able to use an adhesive that was appropriate for improve areas where key business issues exist. It which would allow flexibility for expansion during industry and regulatory bodies alike to work other means.4 EPC technology allows everyday to come. the RFID tag and that would have sufficient tack did not set out to prove that the project’s future releases. The architecture also needed to through. objects to be uniquely identified and to attach to the base film. technical solution was an exact right fit for each provide a secure channel for data collection, company’s specific situation. The technical distribution, and storage. Manhattan Associates’ 3. TAG DESIGN • REMOVABLE TAGS AND ADHESIVES – • DESIGN AND PLACEMENT – infrastructure spanned 15 organizations that solution was selected since it provided the 2. PROJECT APPROACH The original design called for a plain The project involved tagging trade Though tags needed to be small, they collected, analyzed, and acted on data required functional capabilities along with a The project focused on assessing the tag—chip, antenna, and plain inlay with an EPC packages containing real product. Pharmacists also had to be highly visible. Manufacturers generated by EPC movements. The architecture bundled RFID middleware capability. As ability of RFID and EPC applications to improve number printed on the front label—which would typically remove the product from these wanted to ensure the tags were removed from utilized a distributed network of readers and discussed earlier, Matrics tags were selected. specific work processes—what the project team support business processes in lieu of bar codes packages and dispense the medication to their products prior to dispensing to consumers. servers composed of four primary components: Consequently, this factor drove the reader called business scenarios. These scenarios and enable unit-level serialization. The tag patients in vials. 5 Even though it was not Retailers were similarly keen to avoid consumer selection decision. It should be noted that addressed four key categories: EPC needed to be small enough to be placed on expected such products would ever be concerns. The tag label was designed using a • The RFID reader and antenna provided vendors selected for this implementation were Management, Safe and Secure Supply Chain, pharmaceutical packaging without covering dispensed in the original trade package, to bright orange color to ensure visibility for the input for the entire system. This selected based on the specific functional Streamlined Reverse Logistics, and Accurate any existing labeling, it needed to be a UHF tag avoid consumer concerns the group worked pharmacists. component collected tag data from requirements outlined by the project team. No Operational Efficiencies. (Sidebar 2 shows a which is conducive to processes focused on toward making tags removable to reduce the products and cases. Readers and particular preference or vendor qualification complete list of the16 scenarios.) Release 1, shipping and receiving, and it needed to comply chances that tagged product would end up in a • TAG LABEL DESIGN – antennas were located at each node in beyond the scope of this project is indicated or Group 1 selected 10 products and 15 distribution, with EPCglobal Class 0 standards. The 1.2” x 1.4” consumer’s hands. At the same time, the team The project team went through several the supply chain. implied. wholesale, and retail locations; Release 1, Group tags selected from Matrics met these needed to find an adhesive that would allow the iterations on the information printed on the tag • The local manager temporarily stored 2 selected 9 products and 9 distribution, requirements. They came with factory- tags to stay on during handling through the label. This was as a result of the group’s desire to reader tag data, acted as the reader Figure 3 shows the primary components wholesale and retail locations for the project. programmed EPC numbers with a known set of supply chain and avoid potential negative align with the public policy guidelines controller, and formatted EPC data so in the project environment and where they fit test numbers provided by Matrics to serve as a interactions with packaging or drug composition. established by EPCglobal and the fact that the that it could be sent to the central into the infrastructure. In order to quickly and cost-effectively control (manufacturerspecific “real” EPC specific approach for implementing the manager. Each company had a local plan and execute this project and avoid any numbers were not obtained from EPCglobal). A group of specialists in labeling and guidelines was still evolving. (Many of the manager that could control many business interruption, a separate, standalone quality assurance designed an innovative two- guidelines had originally been developed within readers. 5. WORKING WITH KEY parallel process and system were created with As the project team worked through the ply “coupon-style” tag. A clear base layer the context of consumer packaged goods, • The central manager was where the GOVERNING BODIES no modifications to packaging or production design with the participants’ packaging, remains on the product for its lifetime, but the which were not appropriate for pharmaceutical bulk of the functional logic resided and Given that RFID/EPC is very new to the processes and no integration with existing regulatory, and quality assurance experts — actual RFID tag, while adhering during the products.) Dialogue between the project team, where tag data was permanently pharmaceutical space, it was important to information technology (IT) systems. There was no along with EPCglobal and the FDA — a number course of normal handling, can still be peeled EPCglobal, and the FDA resulted in the final tag stored. The central manager was hosted understand the direction and policies of key attempt to validate the system according to FDA of issues arose that provoked the need for off. With the two-ply “peel label” solution, label design that included wording (“Inventory in an Accenture data center, which public policymakers such as the FDA , EPCglobal electronic records regulations. changes and additional features: manufacturers were able to use an adhesive control tag. Tag may be removed”), a human- included the capability to centrally , and DEA to make the project’s activities readable EPC number, and the EPCglobal logo. monitor the local managers. effective. • A PC with a Web browser was used to After the project was completed, the access th application on the local and FDA tags were removed from the products, and the central managers, and control the From the project’s outset, participants products were put back into inventory for normal readers. sought guidance by the FDA on certain distribution. regulatory issues such as labeling, electronic 1 For an overview of RFID/EPC, see Sidebar 1. pack and another was packaged in a carton, both were finalize such a capability. designed to be consumer dispensable. 2 The FDA and EPCglobal representatives also attended key 9 The table in sidebar 5 documents challenges encountered meetings at the Steering Committee level. 6 Only solid dosage form products were subjected to this by Release 1, Group 1 and resolutions adopted by Release testing and were used in the project. 8 9 1, Group 2. 3 See Sidebar 3 for the industry context for RFID/EPC. 7 See Sidebar 2 for a complete listing of the scenarios. 10 The table in Sidebar 4 documents the range of potential 4 EPC Tag Data Standards, Version 1.1 Rev. 1.24 issues to widespread adoption of RFID/EPC. 8 Discussions with regulatory bodies would be required to 5 There were two exceptions: one product was in a blister 34 35
  • 17. LOCAL CENTRAL visual and verbal characteristics, so that they MANAGER MANAGER were appropriate for pharmaceutical products. As the industry moves forward with RFID, EPCglobal’s focus and standards will expand Reader Business Control Logic Commands & Alerts and mature to help make RFID projects in the pharmaceutical space more effective. DRUG ENFORCEMENT AGENCY (DEA) EPC EPC Tag Event Data Data The participating companies determined that it would be advisable to inform the DEA of the project due to the incorporation Tag Antenna Reader of controlled substances into the project scope. The companies wanted to ensure that there were no additional DEA requirements for completing transactions with controlled substances. The project completed all necessary DEA forms as normal during verification, but there RFID Activity Console RFID Activity Console was no additional involvement from the DEA. Integration Platform Integration Platform Warehouse Management 6. SPECIAL PROJECT DECISIONS INFERENCES REGARDING CASE INTEGRITY Trading Partner Management Due to the inherent physics limitations of Figure 3. Conceptual Vendor/Product Fit UHF radio waves and their inability to penetrate certain materials (e.g., liquids and metals), initial tests indicated that not all units within a case SIDE BAR 2: PROJECT records, and the effect of the electromagnetic could be consistently read by a reader. An energy associated with RFID on product quality. valid case or unit EPC tags important component in the project was the BUSINESS SCENARIOS Regarding labeling and electronic records, the • Product Theft 1 – Identification of decision to make inferences about case integrity FDA decided to exercise “enforcement missing or stolen product based on and authenticity. That is, even if only a portion of discretion” as applied to this specific project. Shipping and Receiving Summary the individual units within a case were read, all EPC MANAGEMENT Reporting the units could be inferred to be within the case However, the FDA did request that • Commission – (1) Manual update with • Product Theft 2 – Automatic alert of by their association with the case tag. manufacturers share the results of any product product description, lot number, and missing case or unit EPC resulting from Depending on future business requirements and quality testing they conducted that investigated expiration date (i.e., pedigree product theft occurrence on inbound shipment processes, inference logic may be whether there were any effects of information); (2) manual initialization of STREAMLINED REVERSE LOGISTICS unacceptable. Alternate approaches involving electromagnetic energy on drug efficacy, link between unit EPC and case EPC • Product Expiration Management 1 – customized packaging/reader antennas, the potency, and strength. The pharmaceutical 6 • Decommission 1 – Automatic Identification of short-dated, recalled, use of high-frequency tags, and adjustments to manufacturers developed and executed a decommission of a unit EPC or case or expired product via Inventory processes–as well as matured solutions–may testing protocol for the products and technology EPC after a designated time period of Management Reporting need to be leveraged to make unit-level tags involved in this initiative, which was shared with inactivity in “suspense” status • Product Expiration Management 2– trackable nearly 100% of the time. the pharmaceutical industry. Once the analysis • Decommission 2 – Manual Identification of short- was complete, the results were shared with the decommission of case or unit EPC tags dated/expired/recalled product on LIMITATIONS TO DATA VISIBILITY FDA. As initially expected, based on the SAFE AND SECURE SUPPLY CHAIN receipt All participants in the project have major measurements taken, no adverse effects were • Regulatory Compliance – Tracking • Expired/Recalled Product Return – concerns with the potential to allow competitors found on the products that were tested, and the product through the supply chain to Short-dated, expired, or recalled to gain visibility into confidential company data team moved forward using live product during create a pedigree product return managed through such as inventory levels, shipping/receiving The team conducted aconference room pilot tosimulate a real-life supplychain - from manufacturer to wholesaler to retailer. this project. Testing proved a valuable exercise, • Counterfeit Compliance 1– return of EPC tags schedules, and prices. The project reinforced the since it provided factual data on the effects of Identification of counterfeit product • Product Recall Management – need to establish sound, principle-based data- become more restrictive. users’ identity and their possession of the electromagnetic energy on product quality. based on Product Authenticity Manufacturers’ ability to alert supply sharing work processes. For purposes of this proof appropriate tag information. Reporting chain partners who have received of concept, the intent was to work with each 2. Authorization rules were kept simple. EPCGLOBAL • Counterfeit Compliance 2 – Automatic product being recalled, and organization to create a simple solution that The processing logic behind data In addition to setting industry-driven alert of counterfeit product based on summarize the distribution history of the demonstrated the project’s ability to restrict access and visibility was such that there was no 7. VERIFYING THE SOLUTION standards for EPC, EPCglobal is also providing invalid case or unit EPC tags recalled product via Product History confidential data. The final data visibility scheme confusion among users as to why an Working through the various business guidelines on the visual appearance of tags and • Counterfeit Compliance 3 – Automatic Reporting was developed using three guiding principles: organization’s visibility was enabled or restricted. scenarios the team has established, and going communications for consumer awareness. EPC alert of counterfeit product following ACCURATE OPERATIONAL EFFICIENCIES live with the selected RFID technology to standards have evolved based on requirements the reuse of EPC tags after a period of • Shipping Operations – Outbound order 1. Visibility was favored over restricted 3. The solution demonstrated the ability to execute them, comprised a stage of work called driven b industries such as consumer products inactivity or no reads shipping accuracy verification access. keep sensitive data confidential. Verification. Prior to Verification, the Release 1, and retail. To complete this project, the team • Logistical Error – Identification of a • Receiving Operations – Inbound order It was understood that in potential future The project exhibited the ability to Group 1 team conducted a conference room coordinated with EPCglobal to adjust the tag’s supply chain logistical error based on receiving accuracy verification releases, data access and visibility would likely restrict access to certain data based on the pilot from April through May 2004, to simulate a 36 37
  • 18. SIDE BAR 3: INDUSTRY SIDE BAR 3: previous sales and product information mandated that its Class controlled demonstrated again the ability of this project to own. The traditional learning curve is shown in affect the efficacy, potency, and dating back to the drug manufacturer. pharmaceutical products suppliers use RFID use RFID/EPC technology to execute Figure 1.9a. strength of this project’s solid-dosage CONTEXT – THE • Under Georgia’s “Credit for Returned tags bearing EPCs at the unit level by June 2004. pharmaceutical industry scenarios at 9 locations products. GROWTH OF RFID/EPC Expired Drugs” regulations, all The U.S. Department of Defense for its part will for 9 different products. The project team set out • Contributed research and developed wholesale drug distributors must make require all of its suppliers to put RFID tags on their to track 9 products through 9 locations. 10. KEY CONCLUSIONS – workable solutions on tag frequency, adequate provisions for the return of shipping pallets and cases being delivered to RELEASE 1, GROUP 1 label color, size, wording, and location For some time, the consumer products, expired prescription drugs for up to six the department’s depots by January 2005. Nearly 32 participant company The project helped establish key facets on packages that could represent retail, and transportation industries had taken months after the labeled expiration personnel gained experience in working with the of an industry operating model. By creating a going-in positions for the industry. the lead in researching and applying RFID date for prompt credit or replacement BUILDING SAFE AND SECURE SUPPLY CHAINS scenarios during Verification. proof of concept that engaged major sectors of technologies for widespread use. A (to be received within 60 days). These As noted in a recent NACDS report, the the supply chain, participants gained insight into The project allowed participants to comprehensive study of RFID’s potential to regulations place the financial burden World Health Organization estimates that 5-8 As with Release 1, Group 1, the what processes an supporting systems need to rapidly learn and create innovative responses to enhance pharmaceutical product of expired product entirely on the percent of drugs worldwide are counterfeit— application tracked tag readability statistics be in place to construct an industry operating significant project issues. The project team manufacturing, distribution, and retail wholesale drug distributors. meaning such drugs could represent from $7 during Release 1, Group 2 Verification. The model. The safety and security of the supply addressed and resolved several critical practical operations was a logical extension of those billion to $26 billion of the $327 billion global project team was able to read 99% of the case chain was a critical focus of the project. The new matters in this first broad application of RFID/EPC. efforts. Some specific regulatory mandates Industry and military initiatives have also market. The FDA’s current anti-counterfeiting tags. In addition, when units were inside a case, operating model will ultimately require unit-level unveiled in 200 created a sense of urgency for propelled the reality of widespread RFID usage. taskforce is investigating methods to secure the the team was able to read 85.1% of the unit tags. serialization of products which could enable FOR EXAMPLE: exploring RFID in order for companies to Wal-Mart’s RFID mandate has been widely pharmaceutical supply chain by examining The read rate was lower than what was systematic detection of counterfeit product if it • Numerous obstacles on EPC tags were comply. Two notable mandates were: credited with a general acceleration of the new technologies that utilize RFID. It has stated experienced in Release 1, Group 1, and can be enters the supply chain, a previously unavailable overcome to prove that pharmaceutical technology throughout the United States. By that it should be feasible to use RFID to track all attributed to packaging of the cases (i.e. greater capability. In addition, the project: products can be tagged at the unit level. The • The Florida Pharmaceutical “Pedigree 2005, the retailer’s top 100 suppliers must have drugs at the unit level in 2007. Other healthcare number of units in the case, some packaging project team showed that human readable Papers” requirements mandate that RFID identification tags on shipping crates and organizations are either advocating RFID or are materials contain foil). Once verification was • Assessed the potential for RFID/EPC to numbers can go on tags and be used as a histories be maintained that identify pallets. In addition, Wal-Mart has also predicting its inevitability. complete, 99.9% of returned tags were electronically address important method of redundancy in case the tag is not functioning. regulatory mandates such as the Florida functioning. It established an innovative two-ply Pedigree Requirements. This technology tag system that worked well and satisfied the real-life supply chain from manufacturer to 8. VERIFICATION RESULTS technology and how it worked, read rates Second, similar to other implementations offers the potential to eliminate the needs of manufacturers for adhering to the wholesaler to retailer. This involved testing the RELEASE 1, GROUP 1 improved. In addition, personnel found that of new processes and/or technologies, the need for a paper-based pedigree bottle during normal handling, but that could system, training users, and creating a demo of The project was intended to assess the success in read rates was often related to 1) time Jumpstart participants have demonstrated system, which is labor intensive and also be removed to reduce the chances of tags the new environment to show interested parties feasibility of leveraging RFID/EPC technology in and diligence spent trying to read (e.g., holding progression through the stages of a traditional unreliable. 8 getting into the hands of consumers. outside the project. A conference room pilot was an end-to-end supply chain context. The the units/cases to reorient the tag in relation to Learning Curve. • Helped to establish business rules and not completed for Release 1, Group 2 due to Verification stage of the project showed positive the antenna), and 2) the number of antennas processes to facilitate returns, and • The project arrived at some tentative limited changes in scope; however several movement in that direction in two ways. implemented. Companies that participated in both designed a recall process that may solutions to address data visibility and security—a modifications were made to the solution as a Release 1, Group 1 and Release 1, Group 2, provide a more efficient manner to practical start in surfacing and exploring an issue result of the learnings identified during Release 1, First, the Verification stage Second, the Verification stage exhibited the ability to adapt to the new execute this process using RFID/EPC that will likely be a key adoption hurdle for Group 1 were fixed by installing software patches demonstrated that the RFID/EPC tags and demonstrated the ability of this project to use technology. The individuals conducting the work technology. RFID/EPC in the industry. The selected created by Manhattan. These modifications readers were largely successful in and of RFID/EPC technology to execute 16 for Release 1, Group 2 found they were more • Developed and executed testing technology suite was completely appropriate were tested prior to implementing into the themselves as mechanisms for tracking and pharmaceutical industry scenarios at all 15 comfortable with processes and that they were protocols that provided data indicating and workable for the parameters of this project. Release 1, Group 2 environment. tracing product. The project team set out to locations for all 10 products— a major able to resolve issues more quickly and on their that electromagnetic energy did not track 10 “real” products (not just empty bottles) undertaking.7 The project’s system and processes The primary objective was to focus on ADDITIONAL FINAL PREPARATIONS INCLUDED: through 15 locations. The manufacturers were were able to simulate in a live environment a assessing business value, not on perfecting the • Supply Chain Analysis – required to verify the readability of the tags range of conditions in the supply chain. Nearly 30 technology. Furthermore, the project team Documenting how and when product before applying them to the products. Then they participant personnel gained experience in needed to choose components that fell within would move through the supply chain. To the were able to commission individual EPC numbers working with the 16 scenarios, which allowed the agreed-upon time and budgetary limits of extent possible, the team wanted to test each for specific product units and cases. them to see how RFID/EPC can surface this project. The team selected commercially scenario for each product at each location. information about “suspicious” or irregular available solutions and implemented them so Doing so required the team to conduct a supply The common hardware components shipments such as potentially counterfeit or that business scenarios could be run and chain analysis that laid out step-by-step volume selected for the project were quite reliable. Solid- stolen products. By having continual real-time experiences gained with reasonable flows describing what, how, and when nine dose packaging (bottles) as well as blister access to pedigree information on specific units, effectiveness. It was understood that the solution participant companies’ locations would be packaging could be read and tracked. In this they were provided with much-improved visibility would not be optimized for each location. For shipping to each other. limited proof of concept, the system was able to into where product was at all times and could example, the single antenna used in the project dramatically increase the visibility of the project’s query the system to track down missing product. was chosen for its simplicity and ease of use. • Exception Processing – selected products as they moved through the Naturally, in a scaled-up version of the project, In order to make the scenarios as supply chain. The application tracked tag there would be multiple antennas throughout realistic as possible (and to demonstrate how readability statistics during Verification. The 9. VERIFICATION RESULTS – the facilities and dramatically enhanced RFID might enable the handling of them), the project team was able to read 98.6% of the case RELEASE 1, GROUP 2 capabilities (e.g., multidirectional reading). team planned into Verification a number of tags. In addition, when units were inside a case, The Verification stage of the second exception simulations and forced these the team was able to read 96.8% of the unit tags. group showed positive movement in assessing It should be noted that the level of exceptions to occur. The five “exception groups” Once Verification was complete, 99.9% of the feasibility of leveraging RFID/EPC technology complexity to do a “simple proof of concept” were theft, counterfeit/diverted, logistical error, returned tags were functioning. As the project in two ways. was greater than anticipated given all the expired, and recall. progressed, and as personnel at various different participant companies involved. Such locations became more comfortable with the First, the Verification stage complexity is likely to grow much above what 38 39
  • 19. SIDE BAR 4: CHALLENGES TO INDUSTRY ADOPTION applications must be able to recover from human error. For example, the commissioning activity is a manual process in which the application builds product data in real time. In POTENTIAL ISSUES FOR KEY PROJECT CHARACTERISTICS the instance that incorrect information is WIDESPREAD ADOPTION associated with a product and a product is improperly commissioned, the application must What would be the development time and The solution operated with a centralized system allow the user to recover from the error. investment implications of creating a and a single instance for all companies. decentralized, heterogeneous environment? Tags were placed on packages manually, on How could tags either become integral to 12. THE FUTURE OF LEVERAGING the exterior, at the manufacturers’ distribution packaging or at least be applied sites. automatically? To the extent possible, the team wanted to test each scenario for each product at each location. A product was chosen that was packed RFID/EPC ACROSS THE PHARMACEUTICAL in cases of 48 cartons where each carton INDUSTRY What would be the development time and There was no integration of systems; this system investment implications of integrating RFID was present in this simple test environment as approach. For example, the project team contained foil packs. In addition, cases of Full-scale implementation on an was a standalone, parallel system that required technology and applications with core duplicate data entry. integration requirements grow. The project identified and brought to the attention of product with 72 bottle units packed in three industry-wide basis will be more complex than transaction and other legacy systems? underscored the importance of meeting EPCglobal and the FDA the need for standards layers and 96 bottle units packed in two layers many believe, requiring more time than What would be the process for sorting through infrastructure prerequisites to prepare for and business practices relating to the use of were used. The group found that tag read rates anticipated to refine issues unique to the There was “full” visibility of information (or more and managing restrictions on visibility—and visibility than would probably be permitted industry-wide adoption of RFID/EPC. RFID/EPC technologies that address the unique were slow with these package configurations. pharmaceutical industry. Requirements for how would those outcomes impact the value outside the project). of RFID/EP? needs of the pharmaceutical industry. The There is a potential need to adjust packaging systems and packaging-especially in addressing There are immediate measures that presence of an independent, trusted third party configurations based on the longer read rates data sharing and consumer concerns-in this The team made inferences regarding case What steps would be needed to achieve close manufacturers, wholesalers, and retailers can was also essential to keeping the group on a and greater number of inferences made with highly regulated environment will present greater integrity. to 100% readability at the unit level? take as preconditions for being effective with single path—facilitating collaboration, these types of packaging. Therefore, a one size costs and efforts than those of other industries. How could separate components of the supply RFID/EPC technologies. For example, the completing the project in accordance with the fits all tag infrastructure is not sufficient moving Other key conclusions about RFID/EPC's future chain be addressed that do not provide The project focused on a subset of processes broader lessons and issues on this project can be agreed-upon timeline, and coordinating forward. include the following: benefits to all supply chain segments — e.g., that when improved by the use of RFID/EPC pharmaceutical retail operations and addressed through smaller scale initiatives within external communications about the project. The would provide varying amounts of benefits to warehouse management — without each segment of the supply chain. the four walls of organizations looking to coordination from a technical perspective was When both tagged and untagged THE TECHNOLOGY MUST CONTINUE TO EVOLVE undercutting the learning and value of having an end-to-end supply chain involved? implement RFID/EPC. also important. Many different organizations and products are contained in the same shipment, FOR AN EFFECTIVE FULL-SCALE INDUSTRY individuals (data center administrators, VPN there is a need to adjust data collection and IMPLEMENTATION. What would be the process for obtaining The system was not validated. Implementing RFID/EPC technology engineers, facility engineers, network specialists, inventory management processes. Using normal RFID technology is improving every day. validation? affects many disciplines within an organization, security specialists, etc.) needed to be modes of shipping showed the intricacies Hearing recent feedback about practical What about pallets, interpacks, and totes? and companies must work on integrating their orchestrated and move in concert to complete involved with shipping tagged and untagged applications of the technology, hardware and Only cases and units were tagged at the What about co-packers or repackaging efforts internally. Implementing RFID/EPC the design, deployment, and support activities. product in one shipment. There is a substantial software vendors are responding appropriately manufacturer. occurring at locations other than manufacturers? technologies in any company requires close amount of time spent searching for tagged and quickly. An example of an issue being coordination and involvement across the product in a shipment that contains mostly addressed by vendors is tag quality. At each step What about liquids and biologics with “difficult” Solid dosage products with easy handling organization— representatives from information 11. KEY CONCLUSIONS – untagged product. of the process of converting tags into labels, a requirements were selected. handling characteristics (e.g., refrigeration requirements? technology, quality assurance, regulatory affairs, RELEASE 1, GROUP 2 sizeable percentage was not useable due to public relations, packaging, and operations for RECONFIRMED FINDINGS FROM RELEASE 1, KEY FINDINGS SPECIFIC TO RELEASE 1, GROUP 2 problems with the tags, labels, or printing. The What happens when “real” EPC numbers are EPC test numbers were used. manufacturing, distribution, and stores. One GROUP 1 Case level tagging allows for rate of defective finished tag labels used? specific example was the need to address public As with Release 1, Group 1, the Release identification of the cases from the manufacturer (approximately 20%) would not be acceptable How would multiple antennas placed in ideal perceptions about the industry’s goals in 1, Group 2 project achieved its objectives of to the wholesaler. Guidelines from the FDA outside this project's limited scope. locations (some of which may already have exploring RFID/EPC. Reassuring consumers will be demonstrating RFID/EPC's potential to address stating that all cases and pallets must be tagged A single antenna was used in a secluded area little space, or environments with physically of the distribution center. challenging conditions such as susceptibility a major task that many functional groups will the pharmaceutical industry in the areas of by 2007 and retailer mandates for case and Tag manufacturing and converting to extreme temperatures, shock, dirt, and need to address. satisfying increased regulatory requirements, pallet tagging were the impetus for this group to processes will need to improve significantly to damage) be effectively installed? satisfying increased trade channel requirements, demonstrate the value of case level tagging. provide tags with defect rates at least as low as How would a centralized management A collaborative, cross-supply-chain increasing product security and consumer When units within a case are untagged, product other packaging components that The project operated in a virtual team structure work, when a larger team and more environment, with a central coordinating group approach proved effective in pooling resources safety, increasing efficiency of returns and visibility ends when the case is broken, thus the pharmaceutical manufacturers currently use. complex activities would need to occur locally working with local contacts at each company. at each company? and sharing development assets in order to gain recalls, increasing labor productivity, and value of tagging at the case level exists only at The technology will also need to advance such benefits. increasing order accuracy.9 The project nodes in the supply chain that ship and receive that tags will function effectively with liquids, Reasonably easy control of consumer issues objectives were met under the premise that cases. Tagging cases may offer inventory control biologics, and cold chain products, among could be achieved by manually removing tags What issues would be involved in mass tagging? from packages. It is unlikely that any single member of inference logic was acceptable during shipping and returns management benefits at these others, as well as in mixed-tote shipments. Finally, the group could have gone as far as it did, or at and receiving. Additional RF testing was locations, but electronic pedigree information tag costs need to decrease significantly. Given its narrow scope, the project played a What effort would be involved in educating the level of cost, without the collective beneficial in demonstrating that there are no can not be generated for product tagged at the very limited role in educating consumers about consumers about RFID/EPC’s benefits and RFID/EPC. dispelling misconceptions? knowledge, experience, assets, and learning of adverse effects found on the products that were case level. Additional technology issues that must the others. No single firm could test the RFID/EPC tested. This additional testing proved to be a be addressed include: technology and duplicate the interaction of the valuable exercise to provide additional As additional companies and products How can other segments of the entire supply chain. Manufacturers, wholesalers, reassurance to the public and FDA alike. were incorporated into the project, different • In order to support the type of pharmaceutical value chain (biotechs, The project included large companies from hospitals, clinics, independent pharmacies, and retailers worked well together to address Package composition and tag orientation (i.e. perspectives, limitations and considerations for distributed network that an RFID three segments of the pharmaceutical supply mass merchants, secondary wholesalers, etc.) chain — manufacturers, wholesalers, industry issues. The collective voice and placement of tag on units and how tagged units the future were generated. The group implementation requires, updates will be included to broaden industry adoption to and chain drug retailers. achieve greater benefits? How can small collaboration of the supply chain participants are packed in the case) do have an effect on discovered that until existing processes and need to be made at all locations to businesses be involved? were among the advantages to this group tag readability. systems are fully integrated, current RFID support communications to new RFID 40 41
  • 20. data exchange partners. Release 1, Group 2 Verification, experience in working with RFID/EPC in the SIDEBAR 5: RELEASE 1, GROUP 1 CHALLENGES AND RELEASE 1, GROUP 2 RESOLUTIONS/IMPACT • The testing of hardware after individual cases were read for up to 10 pharmaceutical industry has grown deployment is critical to ensuring that minutes and then inference logic was tremendously; but they need to keep learning. both networks and hardware are used for all remaining unread units. In configured properly. This can be a time- the instance where all the units in the The project was highly valuable in how it BUSINESS PROCESS RESOLUTIONS FOR RELEASE 1, consuming activity that needs to be case were read, the read times tended surfaced issues that the team either did not CHALLENGES/ISSUES FOR RELEASE IMPACTS TO RELEASE 1, GROUP 2 GROUP 2 taken into account when multiple to be between 1 and 5 minutes per contemplate going in or did not believe would 1, GROUP 1 organizations are all trying to coordinate case. present difficulties. The highly regulated nature of and move to the same schedule. • Printing human-readable EPC numbers the industry and consumer concerns drove many • There is limited tag real estate on virtually on RFID tags is valuable because it of these. For example, time-consuming issues Tagged inventory was mixed with regular all pharmaceutical products which provides an acceptable method for were encountered around tag size, wording, inventory. makes external tag placement difficult. redundancy in the situation where a tag acceptable adhesives, and location, to name a • Only one case label was placed on the case/tote and it was difficult to distin-guish Each company was encouraged to bring No cases of product were mixed with regular Even if the tag is incorporated into the stops working and a method to find a few. Working through these issues has provided for the project. multiple participants to training and to inventory. All tagged cases and units were label/packaging, limited labeling space specified unit without a reader if valuable insight. • Only a limited number of operations communicate the project broadly. received per the verification schedule. needs to be considered when required. personnel were aware of the activity, so if they were not involved, the product was not determining what additional EPC- • An RFID-based production system will Other issues, however, will require kept separate. related information (EPC number, notice have to be individually designed and additional study. For example, it will be critical to for consumer, etc.) will be printed on the tuned per company to account for determine how to devise scaleable solutions that label. packaging characteristics of products, address data security and visibility. So will • The expectation is that when reading a isolation of RF in read field, and local solidifying the steps to obtain validation for Tag production processes were updated to reduce the likelihood of this error occurring single case of product, 100% of the units network considerations. Consideration systems and processes, as well as approaching One roll of tags was discovered to have human- again. In addition, Accenture verified the tags All tags sent to manufacturers were 100% will be able to be read within the case. will have to be given to how RFID the significant effort to integrate RFID/EPC readable EPC numbers that differed from the prior to shipping to ensure the humanreadable readable and there were no errors encountered numbers on the chips. EPC numbers on the tags matched those on the with EPC number not matching those on screen. However, major changes to product hardware interacts with other devices. technology with core transaction systems.10 chip and that the EPC numbers were not handling processes may be required to • HF and UHF technologies should be truncated. position cases so they can be scanned further investigated; specifically under The industry needs to continue to one at a time in order to read 100% of all adverse conditions and to optimize the actively engage with Federal/state regulatory For Release 1, Group 1, training was conducted The training for Release 1, Group 2 was the units in the case. Even then, tag strengths of each frequency considering agencies, standards-setting organizations, and Completing training prior to verification did limit two months prior to Verification, a long gap delivered two weeks prior to the start of the number of support calls. orientation within packaging affects product/packaging form factor industry trade associations to gain involvement in between training and the proof of concept. Verification. readability. Packaging configurations (liquids/metals) at the same time as forthcoming releases of this project. and materials may have to be changed process requirements (long Support needs to be available at all times. Release 1, Group 2 built the Verification The verification schedule followed the normal to enable RFID readability. Depending distance/granular location). Creating reasonable consistency of Distribution operations hours start and end early. schedule based on frequency of orders and shipping days and procedures for each In addition, there are specific days when orders on the content of the product and the • The volume of data collected will be standards globally should be a key goal. It will understanding of DC operating hours. company. are placed at the facilities. packaging format it still may not be significant. Processes must be in place to also be critical to mutually establish timetables possible to read each individual unit in a filter and appropriately leverage the that reflect the state and effectiveness of case, which means inference logic may data that RFID can provide. RFID/EPC technology and associated processes, Users were unclear of what reason code to use Reason codes were addressed during the All reason codes were entered successfully in when decommissioning. training. Release 1, Group 2. be appropriate at some points in the and the pharmaceutical industry's experience in supply chain. In some instances during The participants' understanding and leveraging them. There were communication breakdowns With the new process, we were able to identify between ordering personnel at some of the A step to e-mail as well as fax the order was quickly when an order was not received and shipping locations and their counterparts at the included into the Verification process. ensure that the orders were sent. receiving locations. Due to the nature of the solution there was some The users experienced slow read times during network latency. Release 1, Group 2 tuned the Two antennas were shipped to locations scanning. Frequent manipulation of the hardware and evaluated the feasibility of shipping or receiving cases. This did assist the orientation of the tags to the antennae was deploying an additional antenna to Release 1, group in reading units. required. Group 2 sites shipping or receiving cases to improve performance. The serialization of product requires that an order be fulfilled with the specific expected Shipments were sent successfully in Release 1, This point was addressed during training. case of product instead of any case of that Group 2. product. Accenture conducted a round of testing prior to the start of Verification to ensure that all the appropriate URLs were available for each Missing URL of navigation page, WM page, and All URLS were available for use for each company. Also at training, the trainer TPM page. company. demonstrated how to log into the system through the navigation page, WM page, and TPM page. 42 43
  • 21. FOCUS – SAP HOW TO GAIN THE BEST BENEFITS FROM YOUR RFID IMPLEMENTATION Dr. C. Leßmöllmann, SAP AG The RFID hype is rapidly turning to THE “TOP DOWN APPROACH“ implementation step, integration with other reality in 2005. Given the existing costs Driven through the approach of multiple systems is not required. AII then just captures and on tags and reader infrastructure, “RFID middleware” providers, many companies tracks the RFID data without connecting to the companies have to carefully consider are starting to utilize RFID technology through relevant business process. In subsequent how the use of electronic tags can what we call the “Bottom-Up-Approach”. Data implementation phases, the connection to achieve the maximum benefit. Many capture takes place first, and then the existing systems can be established and different types of implementations are middleware tries to find out what this scan is integration levels can be chosen. in progress right now and companies about and intends to aggregate the data and have to stay updated on the best update the relevant decision and reporting INTEGRATION WITH WAREHOUSE MANAGEMENT practices and achievable benefits in systems such as supply chain management or Inside the four walls, implementations of implementations in different industries ERP Systems. This requires a lot of parallel checks RFID – for example, warehouse management – and supply chain processes to attain and business logic in the middleware systems, remain challenging. Right now, RFID technology success. One general rule is clear to which might be different to the rules and checks does not offer many advantages over barcode everyone: The more integrated you in the decision support systems. In addition, the for use in a warehouse environment. Bulk reads of run RFID activities with your SAP business process does not have the chance to RFID cases on pallets or within bins still do not operations, the higher the benefits will do something different than before, because an achieve six sigma accuracy. Usable forklift be in your operation. Detailed RFID operator will get aggregated data updates at readers are still a rarity. Conveyor scanners data has to be visible for your times that cannot be foreseen. This limits the require orientation of the goods as well as decision-making systems. benefits of this technology. barcode readers. SAP SOLUTIONS FOR RFID Therefore, SAP recommends driving RFID SAP has 2 solutions for RFID on the implementations using a more integrated market: approach, which gives the decision systems the chance to utilize the granularity of RFID data in • RFID enabled Supply Chain Execution, the best possible way. The system that is in (please see ZipFile16524, Photo Nr. charge of the business process decides what 11233) supporting the fast movement of granularity of data it expects and generates so goods through the supply chain and called “expected” events, which will be utilizing SAP Event Management as EPC checked against reality through the RFID reads. Information and tracking system, SAP This is what we call the “Top-Down Approach”. Auto-ID Infrastructure (AII) as RFID data capture application and RFID adapters AUTO-ID INFRASTRUCTURE STANDALONE Most implementations focus on for mySAP ERP. IMPLEMENTATIONS packaging and RFID application operations. • RFID enabled Mobile Asset Even though the business benefit of RFID These operations are supported by SAP as are Management, (please see jpg called can be higher through a higher level of loading operations at the dock. “mobileasset.jpg”) supporting the integration, many companies are simply maintenance of machines and searching for ways of doing this integration in a Some companies have successfully equipment using the offline capabilities step-by-step approach. SAP supports these implemented RFID as a system to track the of SAP Mobile Infrastructure in implementation needs through the capability of position and movements of the forklift. Through combination with RFID tags implementing Auto-ID Infrastructure in this this information – in combination with the Other process support for RFID stepwise approach, starting with a standalone knowledge which task or transfer the forklift is operations is currently under development. scenario. This means that, in the first performing – the tasks are confirmed 44 45
  • 22. SAP AND RFID: “IN THEORY, IT’S automatically and the position of the goods is as to where the goods are at what point in time. COLLABORATIVE BENEFITS tracked in the background. With this method of This can subsequently reduce shrinkage, Done correctly, RFID provides value SIMPLE…” implementation you do not need tags on the counterfeiting and damage to the goods. opportunities in collaborative processes such as goods, just RFID tags on the floor and storage Companies can also adjust the total number of difference handling, in-store visibility, active in- bins, which provide all benefits of hands-free tags they will need, by deciding where to apply store-out-of-stock reduction, shrinkage operation on forklifts. Of course, picking the tags – on container / pallet / case or item reduction, deduction management, return operations of single cases or goods still can level. Also, the multiple use of RFID tags in management, counterfeit reduction and cause picking content errors, but most of the combination with returnable packaging responsive replenishment. As these processes benefits of this technology can be achieved materials offer benefits: usually are not yet established in companies and Conceptually, RFID is straightforward: architecture for inventory management. dock need to know in real time that it’s not through this method of implementation. require the establishment of partnerships a passive antenna attached to an expected. That’s only possible if the inventory • Position of the tags on containers or between manufacturers, retailers, suppliers, item gives item data to another The first challenge was managing logic reaches a longway towards the reader UTILIZING BENEFITS IN ASSET TRACKING pallets can be standardized wholesalers and logistics service providers, the device. In a real-world retail massive amounts of RFID data, not all of which device on the loading dock.” This is A high benefit potential in the use of • Better protection against moisture, dust, implementation of these processes will be found environment, the practical issues are is useful. “RFID data must be filtered to remove accomplished by middleware that connects RFID technology is achieved through asset damage, etc., is possible at the bottom of the list of implementation numerous. With extensive expertise in both incorrect and repeated ‘reads’,” notes every device, provides device management, tracking. Of course the following rule applies: • Higher read performance of tags activities with RFID. Nevertheless, these processes enterprise applications, and long Christian Koch, Director of Strategic Retail and generates preprocessed data to be “The higher the value of goods, the higher the • Reduced tag costs through multiple use offer the highest potential benefit and will give experience in retail settings, SAP Programs at SAP. “Then it can be useful handed off to the supply chain event system benefit from applying the RFID label”. of same tag and saving application innovative companies the chance to move understood this coming into the information.” SAP built the filtering logic into the and other enterprise applications. This driver set costs at new packages ahead and put some distance between project. “In theory, RFID is simple,” RFID reader drivers. Then the “clean” RFID data and middleware are the foundation of SAP’s Benefits result from a better knowledge • Reduced returnable packaging themselves and their competitors. says Thomas Riehmer, Strategic can be interpreted into business logic form. new Auto ID Infrastructure application. material costs through better inventory Support Manager for SAP’s Retail visibility Group. “But not surprisingly, in real The second challenge was integrating The third challenge was creating the applications, there are a number of the RFID feeds into middleware and the application that would interpret the activity in Through a better visibility in asset issues that must be managed.” enterprise inventory application. “You want the the supply chain. SAP designed the supply tracking, companies also have an active RFID architecture and the enterprise chain event management application, which capability to reduce transport insurance costs. SAP had been working on pilot RFID applications to be integrated in such a way that provides tracking, tracing, and analysis of Last but not least, asset tracking is highly relevant deployments since 1999, and was one of the the back-end business logic has a ‘long arm’ system events. It then delivers this business for spare parts and service parts, as their original members of the RFID Networking Forum. reach into the RFID devices,” explains Riehmer. intelligence using user-specific portals for utilization and maintenance history is important For the METRO Group Future Store Initiative, SAP “For example, if an unexpected shipment management, in-store staff, and vendors. for maintenance decisions. had responsibility for the overall RFID software arrives at the loading dock, the staff on the 46 47
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  • 24. HOW WE ARE FOCUS – UNISYS HELPING Out perform the competition, to take 100 metres. Direct lines of sight are not • Regulatory and ‘big buyer’ compliance advantage of sudden market shifts and necessary. The date-time stamp and the RFID • Emerging technology opportunities, as well as protecting your tag identification number for each tag detected • Shareholder value imperative TRANSFORM customers, brand and bottom line against from each worldwide location are transmitted to counterfeiting and theft, and speeding a central server. The central server synthesizes The need for track and trace visibility has shipments through ports and other points of entry these reports from around the world into a never been more urgent. Big buyers and PERFORMANCE tracking report available via the Internet / regulators require it. Demanding and informed Track and secure your in-transit goods Intranet. As a result, shipment receivers, carriers customers expect it. The global economy with real-time access to the location and and vendors can obtain the worldwide status of depends on it. Intense competition and cost BY DEPLOYING condition of every shipment, including details like a specific shipment. Reports and queries can be pressures threaten companies that can’t quantities, sizes, temperature and exposure to tailored to meet specific information achieve it. heat or sunlight requirements of different departments, RFID executives or partners. Managing complex logistics and We are helping our clients uptake RFID transportation supply chains is hugely based business solutions to directly address WHY IS RFID IMPORTANT? challenging, not least since it entails optimising labour, productivity and inventory improvement Competitive forces such as performance across a multinational network of opportunities in the supply chain, asset globalisation, outsourcing, enhanced security partner organisations, suppliers, logistics management and security areas. concerns and the continuous drive to improve companies and customers. Organisations rely on These are just some of the benefits efficiency are creating an imperative for track & a range of information systems to monitor supply that RFID can deliver now. THE BASICS - HOW RFID WORKS trace to manage extended supply chains. chain events, to automate key supply processes, To track assets, shipments and products, Organisations are addressing the following and to accelerate speed to market. Logistics Reduce supply chain operating and RFID equipment is placed at selected locations dimensions: providers are finding that RFID enables them to processing costs by up to 20%, while improving along the supply chain. As an ‘RFID tagged’ track their customer’s goods, assets and even customer service at the same time shipment moves through the supply chain • Globalisation and increased complexity people throughout the global supply chain. They network, devices called interrogators or tag • Cost efficiency and effectiveness are also striving to integrate their systems with Monitor the location of orders and readers detect the presence of the tags at these • Outsourcing suppliers and customers to reduce costs and condition of key equipment and resources within selected points. The readers use radio frequency • Security streamline purchase and payment processes. the manufacturing plant, distribution centre and waves to read each tag, from a distance up to • Price commoditisation But along with these opportunities, logistics throughout the supply chain at all times Department of Defense Asset Visibility Provide real-time insight into the location and condition of materials and finished products as they move across the supply chain – from foreign points of origin to corporate and Worlds largest global RFID managed service for the US Army by Unisys domestic customers RFID in the Consumer Products Supply Chain Active Tags Fixed Reader T3 To T2 SmartChain Site Server T1 Sign Post 123KHz Range : 433.92MHz Range: 0 – 6m 0 – 100m Figure 1 Figure 2 50 51
  • 25. provider companies face many challenges in We have led more than a dozen RFID scaled easily, with minimal disruptions of current Services that help you define clear STRATEGIC ASSET AND PERSONNEL MANAGEMENT “The Unisys solution will allow us to meet optimising performance and managing risk implementations and pilots in consumer operations business priorities and means of defining value A solution that enables the emerging government standards and across the global supply chain. electronics, apparel, retail, food and beverage, from RFID technology through intensive management of people, assets and equipment regulations for security, while also providing airlines, banking and government. In summary our services to drive business workshops or a more in-depth value assessment involved in a variety of operations management business benefits such as lower inventory, WHAT IS OUR EXPERIENCE? value through a range from strategy and project. environments ranging from construction, oil and reduced wait times, higher service levels and As independent consultants and solution We are leading four projects designed business case through solution implementation gas to enterprise property management. Of improved risk management.” – Gary Stopka, implementers, Unisys leverages in-house to create traffic efficiency and “zero-gap” and business change to running systems to VALIDATE THE VALUE high value to organsisations that need to Vice President, Sara Lee Coffee & Tea expertise and vendor partnerships to provide the container security at U.S. ports, as part of the U.S. deliver benefits. Furthermore, we can even offer Services that help validate the impact of maintain a productive asset base and/or Foodservice. entire range of business and technical services to Transport Security Administration’s Operation our ES7000 server machines (with the lowest total RFID technology through proof of concept pilots provide a safe and secure working environment. clients seeking to achieve world-class supply Safe Commerce program. <Insert Figure 2> cost of ownership on the market) to provide the tailored to your specific processes and operating chain management. All our consultants have bandwidth and processing power. characteristics WHAT IS OUR APPROACH? extensive practical experience implementing Our presence in the global Whether your supply chain challenge is solutions within specific sectors and the unique transportation marketplace, where our solutions UNISYS RFID SOLUTIONS REALISE THE VALUE responding to regulatory or ‘big buyer’ operational or technical challenges presented ‘lift’ 30% of the worlds cargo and passengers, has With Unisys RFID solutions, organisations Services that help you realise the value mandates, tracking customer orders, managing by each business environment. placed us centre stage in advising and building in both the private and public sector can drive of RFID technology through strategy assets and inventory or scheduling fleet RFID networks that our clients use to deliver time greater performance and increased shareholder development, solution implementation and operations, Unisys can show you how to use RFID Here are some the areas we are critical services to their customers value through enhanced visibility and security. change management services technology to operate more effectively. We currently active designing, piloting and RFID solutions are designed to maintain visibility clearly define value propositions and develop deploying effective -based networks: As a founding member of EPCglobal, we at every step along the value chain, from foreign ANTI-COUNTERFEIT (GUARDIAN) strategies and solutions based on your unique are well versed in the business case analysis and points of origin to domestic store shelves. A A solution that tracks products through needs and objectives. Since 1994, we have served as the prime value targeting across all elements of the supply combination of RFID tags and readers provide all nodes of a supply chain by building a custody integrator and provider of managed services for chain, CRM and enterprise asset management. real-time location and condition data as raw of ownership from factory to consumer; a so We leverage Unisys’s unique 3D Visible the world’s largest RFID enabled network, materials, finished goods and people move on called ‘e-pedigree’ (using Electronic Product Enterprise (VE) methodology to underpin the operated by the U.S. Department of Defense, We operate Centres of Excellence in the land, at sea or in the air, as well as at border Codes) written directly to RFID tags. Of high workshop delivery and deliver the required securing more than 25,000 containers of food, U.K. and in North America, for accelerated crossings, manufacturing plants and distribution value to organizations that need to protect outputs. 3D-VE reveals the interactions and hard- Callum Moy blood, medications and ordnance per day in development of strategies and business cases. centers. Our RFID solutions include the following: products and brands against the threat of to-see relationships through business simulation Unisys more than 50 countries, under very demanding Plus, our ‘jump start’ program, based on radio counterfeit intrusion (e.g. pharma, clothing, hi- modeling; from strategy to hardware Practice Director of Supply conditions. beacons, can be implemented quickly and DEFINE THE VALUE tech). infrastructure. Chain Management Impact of RFID on Supply Chain Management 4SIGHT Our team is with you through the entire Callum Moy was appointed Practice Director of Supply A solution that provides 24*7 visibility of process of incorporating both tried and tested Chain Management (SCM) in the Enterprise global shipments using RFID technology to and innovative solutions into your company’s RFID enables higher performance across key process attributes. Transformation Services Division of Unisys in 2002. In provide more timely, accurate and granular operations. We can manage all aspects of your this position he is responsible for leading SCM client shipment status information. Of high value to requirements; including consulting, software services and change programmes across the entire organsisations that need to know the status of development, systems integration, operations field of SCM. He has special responsibility for RFID shipments and want to use enhanced visibility to and training. It can start with our assistance to Services in the UK and Europe. Callum contributes better manage supply and demand (e.g. define the value, business priorities and strategy. widely across the business media from trade floating inventory), customer service and cost As appropriate, we then begin to develop a Raw publications to national radio. Assets Storage Wholesalers Customers control. tailored solution to meet your needs. Material Department of Defense Asset Visibility High Worlds largest global RFID managed service for the US Army by Unisys Low Labour Product Inventory Labour Product Inventory Labour Product Inventory Intensive Visibility Cover Intensive Visibility Cover Intensive Visibility Cover Figure 4 Figure 3 Process Attributes 52 53
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  • 27. FOCUS – SIEMENS BUSINESS SERCICES of goods – from monitoring of incoming goods, to stock-taking, to merchandise security, to cash registration in various outlets. The end result is significant. Kaufhof Warenhaus is able to accelerate its process for incoming goods minimizing transport “losses” and thus increase work efficiency, achieve added-value, cost advantage, quality assurance and high-level customer satisfaction. Moreover, the company’s image as an innovative retailer is enhanced. During the test phase of Kaufhof Warenhaus’ RFID project, Siemens Business Services was engaged to provide consulting on the process level and technical requirements. The IT service provider was also involved in designing and building the solution, managing the project and partner as well as providing evaluation and profitability analysis. Siemens Business Services is optimistic about the future of RFID. The company has shown its commitment in the technology by becoming a member of METRO Group Future Store Initiative which vendors involved in RFID RFID AT conduct test on new technologies and ideas in practical applications and develop them further SIEMENS with the long-term goal of developing RFID standards for the retail trade. Siemens Business Services has also invested in two centers for RFID: BUSINESS the RFID research lab in Munich in cooperation with Intel and the Fraunhofer Institute’s RFID center in Magdeburg. SERVICES At the joint Siemens Business Services- Intel center, experts from Intel and Siemens Business Services are using comprehensive case studies from various sectors of industry to show how RFID accelerates logistics processes and lowers costs. At the center, interested parties RFID, or Radio Frequency deploying RFID beyond assets tracking and in a more time to spend with the patients and less on can examine and try out various RFID reader Identification, is a hot topic in the different environment is the use of the administration. devices in combination with powerful Intel® industry today. A technology technology with human beings. At Jacobi Itanium® 2 servers. The software used comprises introduced commercially back in the Medical Center in New York, Siemens Business There are numerous benefits one could the SAP modules mySAP SCM, mySAP CRM, SAP 1980s, RFID has been put into spotlight Services is helping the hospital to run a pilot derive from RFID implementation: reduction of Mobile Asset Management and, as the once again in the 21st century. project on RFID where hospital patients are fitted administrative errors without human intervention, integration platform, SAP NetWeaver. with a wristband with an RFID chip that contains synchronization of flow of goods across supply Siemens Business Services which is a their name, birth date, gender, and medical chain, increased productivity, improved global The center is one of the first RFID process consultant and solution provider for RFID record number. These are linked to hospital visibility and real-time collaboration and laboratories worldwide to carry out integration has implemented more than a dozen RFID network that connects patient record to labs, communication across supply chain, use of real- on the basis of the SAP NetWeaver platform, projects for diverse organizations including those billing and pharmacy. Doctor and nurses in the time data and authentication, cost and time which also incorporates mobile devices. for patent management in law firms, paint shop hospital are equipped with a tablet PC with RFID savings, gained competitive advantage as well for aircraft industry, vehicle location system for reader and with a Wi-Fi connection to access as increased customer satisfaction, just to name RFID is an exciting technology. It saves BMW and warehousing and distribution for Otto- the network. a few. time, money, and resources. Commitment in RFID Versand, a mail-order company. These push by vendors like Siemens Business Services successful projects truly demonstrate the With the implementation, caregivers’ In Germany, for example, Kaufhof signifies the potential growth of the technology in unlimited usage of RFID application in different administrative tasks are simpler and less Warenhaus AG, one of Europe’s leading the IT space. With the eventual adoption and industries. paperworks are required. Furthermore, they do department stores, is piloting RFID to speed up its market acceptance of RFID standard worldwide, not need to return to a nurse’s workstation to logistic processes. With the deployment of RFID, the future of RFID technology definitely looks To further illustrate the possibility of enter information. It also gives the caregivers the retailer is able to streamline its management bright. 56 57