Asaduzzaman - UTILIZING RFID FOR SUPPLY CHAIN BUSINESS ...

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Asaduzzaman - UTILIZING RFID FOR SUPPLY CHAIN BUSINESS ...

  1. 1. Authors Asaduzzaman Md. Saifuddin Khalid (Presenter) Prof. Dr. M. Abdus Sobhan Independent University, Bangladesh (IUB) September 11, 2009
  2. 2. <ul><ul><ul><li>RFID </li></ul></ul></ul><ul><ul><ul><li>Apparel Industry of Bangladesh </li></ul></ul></ul><ul><ul><ul><li>Motivation </li></ul></ul></ul><ul><ul><ul><li>Scope of Research </li></ul></ul></ul><ul><ul><ul><li>Review of Literature </li></ul></ul></ul><ul><ul><ul><li>Methodology </li></ul></ul></ul><ul><ul><ul><li>Objectives </li></ul></ul></ul><ul><ul><ul><li>Hypothesis Development </li></ul></ul></ul><ul><ul><ul><li>The Model for Case study </li></ul></ul></ul><ul><ul><ul><li>Manufacturing Process of Posh Apparel </li></ul></ul></ul>
  3. 3. <ul><ul><ul><li>RFID and its scope of saving for Knit Apparel Manufacturing Supply Chain </li></ul></ul></ul><ul><ul><ul><li>Data Flow architecture and Servers for RFID implementation </li></ul></ul></ul><ul><ul><ul><li>Application Interface </li></ul></ul></ul><ul><ul><ul><li>RIFD based manufacturing supply chain process </li></ul></ul></ul><ul><ul><ul><li>Total Cost of Ownership </li></ul></ul></ul><ul><ul><ul><li>Return on Investment (ROI) </li></ul></ul></ul><ul><ul><ul><li>Results of Case Study </li></ul></ul></ul><ul><ul><ul><li>Discussions </li></ul></ul></ul><ul><ul><ul><li>Conclusion </li></ul></ul></ul>Cont’d
  4. 4. <ul><li>“ A key to automating everything” </li></ul><ul><ul><ul><li>Invented in 1948 by Harry Stockman </li></ul></ul></ul><ul><ul><ul><li>Initial application was in World War II by US army </li></ul></ul></ul><ul><ul><ul><li>Came into commercial use in 1990s </li></ul></ul></ul><ul><li>Basically RFID system composed of a tag containing a chip, a reader, its antennas and a computer. </li></ul><ul><li>RFID tags and readers have to be tuned to the same frequency to communicate . </li></ul>
  5. 5. <ul><li>Entered the export market of apparels in 1978 </li></ul><ul><li>Currently 2.9 percent share of Global apparel market </li></ul><ul><ul><ul><li>sixth largest exporting country in the USA </li></ul></ul></ul><ul><ul><ul><li>fifth largest exporting country in the EU </li></ul></ul></ul><ul><li>Contribution to country’s economy. </li></ul><ul><ul><ul><li>76% of the country’s total exports </li></ul></ul></ul><ul><ul><ul><li>4.5 million employments </li></ul></ul></ul><ul><ul><ul><li>10.5% of the country’s GDP </li></ul></ul></ul><ul><ul><ul><li>40% of its manufacturing output </li></ul></ul></ul><ul><li>Earning US $14.11 billion in export revenues </li></ul><ul><li>Registered a growth of 15.87 percent compared to last year </li></ul><ul><li>Targeted growth $16 billion by this year & $25 billion by 2012 </li></ul>
  6. 6. <ul><li>RFID provides </li></ul><ul><ul><ul><li>persistent, real-time identification with less human intervention </li></ul></ul></ul><ul><ul><ul><li>more frequent data collection </li></ul></ul></ul><ul><ul><ul><li>greater information capture </li></ul></ul></ul><ul><li>RFID solution can generate an additional </li></ul><ul><ul><ul><li>2 to 7 per cent increase in revenue </li></ul></ul></ul><ul><ul><ul><li>improve handling productivity by 20 to 30 percent </li></ul></ul></ul><ul><ul><ul><li>reduce operating expenses by 2 to 5 per cent </li></ul></ul></ul><ul><ul><ul><li>reduce days in inventory by 1 to 2 percent </li></ul></ul></ul><ul><li>RFID can take apparel manufacturing supply chain process and the industry to the next level. </li></ul><ul><li>Hard economic times encourages companies to spend on acquiring the latest supply-chain technology for competitive age </li></ul>
  7. 7. <ul><li>Emphasized on following fields relevant to research topics. </li></ul><ul><ul><ul><li>RFID </li></ul></ul></ul><ul><ul><ul><li>Supply Chain of Apparel Manufacture process </li></ul></ul></ul><ul><ul><ul><li>Infrastructure for Business Information System </li></ul></ul></ul><ul><li>Research highlights business benefit of RFID especially for Apparel Manufacturing Supply Chain. </li></ul><ul><li>Supply chain with RFID technology can be considered as global network of integrated hubs of suppliers and clients that create, track and deliver RFID tagged finished products manufactured from raw materials and semi-finished parts to multiple destinations from multiple supply sources. </li></ul>
  8. 8. <ul><li>Literature Review was conducted on outcome of various researched on followings: </li></ul><ul><ul><ul><li>RFID in Apparel Manufacturing </li></ul></ul></ul><ul><ul><ul><li>RFID Implementation and its ROI </li></ul></ul></ul>
  9. 9. <ul><ul><ul><li>Primary objective is to forge a link between the technology and the application scenarios by using the technology to support business processes in business and industrial environments. </li></ul></ul></ul><ul><ul><ul><li>To establish financial feasibility and benefit of adopting RFID and it’s facilitating IT infrastructure in Apparel Manufacturing Supply Chain Business process. </li></ul></ul></ul><ul><ul><ul><li>To encourage enterprises for adopting IT and RFID by projecting business case and help them to give away fear of Information Technology. </li></ul></ul></ul><ul><ul><ul><li>To achieve its worthiness by providing supply chain visibility to Apparel Buyer, Supplier and Manufacturer . </li></ul></ul></ul>
  10. 10. <ul><li>Hypothesis 1 : </li></ul><ul><ul><ul><li>RFID with IT will increase transparency between parties involve with Apparel Manufacture and Exporters </li></ul></ul></ul><ul><li>Hypothesis 2: </li></ul><ul><ul><ul><li>RFID will reduce workload for management team, increase purchase order from buyer by ensuring clear view of Supply Chain and Manufacturing pipe line </li></ul></ul></ul><ul><li>Assumptions: </li></ul><ul><ul><ul><li>Manufacturing processes are optimized and have sufficient manpower to adopt RFID and Application </li></ul></ul></ul><ul><ul><ul><li>Business value is counted by time for information flow and financial cost associated with adaptation of RFID </li></ul></ul></ul>
  11. 11. <ul><li>Posh Apparel situated at 897-898 Mohakhali, Dhaka </li></ul><ul><ul><ul><li>Export oriented garment factory </li></ul></ul></ul><ul><ul><ul><li>Marketing office in Dhaka and Toronto, Canada. </li></ul></ul></ul><ul><ul><ul><li>Production capacity of 50,000,000 dozen of T-Shirt per year </li></ul></ul></ul>
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  14. 14. Cont’d
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  17. 17. Cont’d
  18. 18. Cont’d
  19. 19. Cont’d
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  21. 21. Cont’d
  22. 22. <ul><li>Grand Total for Capital Investment </li></ul><ul><ul><ul><li>RFID Device……………………………………………………….2,852,500 </li></ul></ul></ul><ul><ul><ul><li>Server…………………………………………………………………1,375,000 </li></ul></ul></ul><ul><ul><ul><li>Software…………………………………………………………….1,000,000 </li></ul></ul></ul><ul><ul><ul><li>Manpower Training..........................................160,000 </li></ul></ul></ul><ul><ul><ul><li>One time setup cost for connectivity……………………278,000 </li></ul></ul></ul><ul><li>Grand Total for Capital Investment……5,665,500 </li></ul><ul><li>(Taka Fifty Six Lacs Sixty Five Thousand and Five Hundred) Only </li></ul>
  23. 23. Calculation of ROI In this case to calculate ROI, it is found: Gain from Investment = Taka. 3,888,150,000 Cost of Investment = Taka. 5,665,500 ROI = ( 3,888,150,000-5,665,500)/5,665,500 ROI = 685.29 Financial figure for cost savings are self-explanatory Additionally Posh will save 49 (Forty Nine) days lead time for data update
  24. 24. <ul><li>Return on Investment (ROI) </li></ul><ul><ul><ul><li>ROI ratio of 685.29 in first year </li></ul></ul></ul><ul><ul><ul><li>Pilferage reduced to .124% from 7.53 %. </li></ul></ul></ul><ul><ul><ul><li>Database will be updated 49 days earlier compare to previous </li></ul></ul></ul><ul><ul><ul><li>Transparency among all parties involved. </li></ul></ul></ul><ul><ul><ul><li>RFID for apparel manufacturing supply chain process is a worthwhile project for Apparel industry. </li></ul></ul></ul>
  25. 25. Technical experts have to come forward to adopt RFID, prioritizing the most contributing sector of industry. Manufacturing process of Apparel industry is a well-practiced process, the research did focused mostly on IT infrastructure issues of implementing RFID in its process. Solution will ensure Transparency among all parties involved. A Return On Investment (ROI) ratio of 685.29 is achieved by showing optimum production capacity utilization of Posh Apparel. RFID for apparel manufacturing supply chain process is a motivating solution for Apparel industry.
  26. 26. <ul><li>Study demonstrates: </li></ul><ul><ul><ul><li>RFID in key sector of business and industry may derive extraordinary scope for business growth </li></ul></ul></ul><ul><ul><ul><li>Scope of work for talented technical expert of the nation. </li></ul></ul></ul><ul><li>The research can be motivating to </li></ul><ul><ul><ul><li>increase scope for Information Technology deployment </li></ul></ul></ul><ul><ul><ul><li>ensure business growth for Apparel Industry </li></ul></ul></ul><ul><ul><ul><li>increase scope of employment for Technical experts and work force </li></ul></ul></ul><ul><li>A win-win situation for the entrepreneur and technical experts resulting economic growth for the nation. </li></ul><ul><li>An excellent candidates to save money with RFID. </li></ul>

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