Implementing RFID at Hewlett Packard


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  • Implementing RFID at Hewlett Packard

    1. 1. Truth in Technology 2005 The HP Experience Guillaume Oget Solution Manager HP RFID program October 27th 2005
    2. 2. Industry’s Largest Supply Chain <ul><li>#1 in material spend – $40B </li></ul><ul><ul><li>Memory – #1 </li></ul></ul><ul><ul><li>Microprocessors (Intel & AMD) – #1 </li></ul></ul><ul><ul><li>Windows software (Microsoft) – #1 </li></ul></ul><ul><ul><li>Hard disk drives – #1 </li></ul></ul><ul><ul><li>Laser engines – #1 </li></ul></ul><ul><ul><li>Optical disk drives – #1 </li></ul></ul><ul><ul><li>Chipsets (Intel) – #1 </li></ul></ul><ul><ul><li>LCD panels and many more – #1 </li></ul></ul><ul><li>#1 in contract manufacturing/ ODM – spend ($5B) </li></ul><ul><li>#1 in electronics industry logistics procurement – $1.7B </li></ul><ul><li>1M service support parts per month </li></ul><ul><li>Every day HP delivers: </li></ul><ul><li>1.3 Million Inkjet cartridges </li></ul><ul><li>110,000 Printers </li></ul><ul><li>75,000 Personal systems </li></ul><ul><li>3,500 Servers </li></ul><ul><li>1B customers - 178 countries </li></ul><ul><li>21,000 patents </li></ul><ul><li>675 new products in FY03 </li></ul><ul><li>142,000 employees </li></ul>
    3. 3. A Brief History of RFID At HP <ul><li>2002 </li></ul><ul><ul><li>June – Printing group investigates possible new business using conductive inks </li></ul></ul><ul><ul><li>August - Supply Chain / Logistics Councils authorize RFID pilot </li></ul></ul><ul><ul><li>September - first proof of concept kicked off at Memphis printer facility </li></ul></ul><ul><ul><li>October –Phase I of Container Security Initiative with US Homeland Security </li></ul></ul><ul><li>2003 </li></ul><ul><ul><li>January - Chester, VA ( inkjet pens ) chosen as the next RFID pilot site </li></ul></ul><ul><ul><li>April - Memphis POC shows positive ROI, RFID Core Team launched </li></ul></ul><ul><ul><li>June - Wal*Mart issues first retailer request for tagged goods </li></ul></ul><ul><ul><li>July - HP launches NA Retail RFID program worldwide </li></ul></ul><ul><ul><li>September – engaged with Best Buy, HP investigates joining Auto-ID Center </li></ul></ul><ul><ul><li>October - HP launches Warrior program for US DOD requirements </li></ul></ul>
    4. 4. A Brief History of RFID At HP <ul><li>2004 </li></ul><ul><ul><li>February - HP joins EPC Global, Dick Lampman elected to Board of Governors </li></ul></ul><ul><ul><li>April - Memphis in production, HP shipping tagged goods to Wal*Mart </li></ul></ul><ul><ul><li>May - HP negotiating with China on RFID frequencies on EPC Global’s behalf </li></ul></ul><ul><ul><li>Assisted Singapore in testing to determine RFID frequencies </li></ul></ul><ul><ul><li>November - 21 RFID capable sites in Latin America, Mexico, USA and Asia </li></ul></ul><ul><ul><li>December - TUSC program launched </li></ul></ul><ul><li>2005 </li></ul><ul><ul><li>January - HP granted first temporary licenses to operate RFID UHF in China </li></ul></ul><ul><ul><li>January - all 26 tier 1 sites supplying Wal*Mart now live </li></ul></ul><ul><ul><li>March - first shipments to Target </li></ul></ul><ul><ul><li>April - now shipping 60+ SKU’s to Wal*Mart </li></ul></ul><ul><ul><li>April – working with Malaysia government to help determine frequencies </li></ul></ul>
    5. 5. RFID Business Objectives <ul><li>HP’s business objectives </li></ul><ul><li>create an agile data infrastructure accessible at any time </li></ul><ul><li>Get accurate distribution & sales information related to products </li></ul><ul><li>Product life cycle information from manufacture to retail channels </li></ul><ul><li>enable low touch processes & improvements on Supply Chain cost structures </li></ul><ul><li>increase material & finished goods velocity thru Supply Chain </li></ul><ul><li>quality tracking at key processes in manufacturing </li></ul><ul><li>reliable information capability for Reverse Distribution processes </li></ul><ul><li>faster shipping and receiving processes </li></ul>
    6. 6. RFID Strategies In Cohesion I N N O V A T I O N User Implement RFID into HP’s own operations Standards Leader Influence development & ratification of international standards Service Provider Consultancies & integration services to customers who wish to implement RFID Market Provider Provide HP’s customers with goods that are RFID enabled To be a credible integrator we must be able to show that we have done it to ourselves To be a successful user we must ensure standards are practical and beneficial To be a successful market provider we must be part of driving standards into the market To successfully influence standards we must be a visible and active part of the standards effort
    7. 7. RFID Council Sets Overall Company Strategy RFID Core Team 28 members from across HP Program Managers Program Teams Umbrella Program Structure RFID Program Director Manages overall “Umbrella” Program Proposes overall company strategy Drives internal implementations Main POC To External Bodies Facilitate and drive cross pollination across every part of the company We hate learning things twice ! Finance, Systems, Logistics, HR, PR, Procurement Program Management, Legal & Technical Support IPSG TSG CSG
    8. 8. I just know that RFID justification is in here somewhere….. RFID ROI
    9. 9. The Supply Chain Business Case <ul><li>Retaining your Customer </li></ul><ul><ul><li>Tagging goods that your Customer asks you to tag </li></ul></ul><ul><li>Improving Supply Chain Efficiency </li></ul><ul><ul><li>Do things at less cost by reducing labor involved </li></ul></ul><ul><ul><li>Increase Supply Chain velocity by taking less time to do the same work </li></ul></ul><ul><ul><li>Do things better by increasing first pass accuracy </li></ul></ul><ul><ul><li>Lessen Supply Chain risk by increased in transit accountability </li></ul></ul><ul><li>Improved Data Collection </li></ul><ul><ul><li>RFID reduces effort & cost to identify item </li></ul></ul><ul><ul><li>Which can make identification viable where it wasn’t before </li></ul></ul><ul><ul><li>And this can improve overall Supply Chain visibility </li></ul></ul><ul><ul><li>Which should reduce second guessing of events </li></ul></ul>
    10. 10. The Wal-Mart Requirement - Retaining Your Customer 1 EPC tag per carton – 100% read on conveyor 1 EPC tag per pallet – 100% read at Inbound dock Conveyor speed of up to 600 feet per minute 3 Texas Distribution Centers Commenced on schedule in January 2005 Today more than 60 tagged products are shipped to Wal*Mart from 26 sites globally and HP is piloting with many of the world’s largest retailers
    11. 11. Futian, Shenzen Mentor Media Scanners & Cameras
    12. 12. Retail IPG RFID Plan In transit Regional Distribution Walmart Walmart, Sam’s Club and Neighborhood Market Stores Product Completion Center Base Manufacturing Malaysia Flextronics Shanghai Calcomp Shenzhen Mentor Media Bangkok Venture Hong Kong Canon Tokyo Canon Canon China AiO & Personal Printers AiO & Personal Printers Scanners& Cameras AIO Toner Toner/ Personal Laserjet Personal LJ Memphis Flex Memphis Menlo Virginia Sonoco Walmart DC3 De-Soto, Texas Walmart DC1 Sanger, Texas Walmart DC2 Cleburn, Texas FGI Direct FGI Direct FGI Direct IDS Air Various Guadalajara Jabill InkJet Supplies Guadalajara Flex Tag Site Supply Site Delivery Site
    13. 13. HP RFID Geographic Scope RFID impacts businesses, operations and Customers in all Regions. Therefore program scope is global and pan HP in nature Commercial sites Retail sites 28 sites now RFID capable 10 more in progress
    14. 14. First site to go live in volume in August 2004 We are also working with our large Retailers to synchronize pilot efforts The Memphis Pilot Tagging pallets & cases with EPC Class 1 915Mhz tags Began shipping tagged cases and pallets with full system integration to WalMart April 2004
    15. 15. Refining Existing Processes – Integrating with RFID He is scanning every printer engine to capture the serial number And he is applying a barcode label by hand
    16. 16. Refining Existing Processes – Integrating with RFID RFID capable printer Integrated RFID tag Integrated RFID tag
    17. 17. Refining Existing Processes – Prior to RFID <ul><li>Forklift selects full pallet for shipment, picks the pallet from storage, then takes it to a shipping dock </li></ul><ul><li>Tells warehouse staff that pallet is ready </li></ul><ul><li>Warehouse staff then scan pallet contents </li></ul><ul><li>WMS system confirms pallet to order and prints shipping label </li></ul><ul><li>Operator retrieves address labels and apply to pallets </li></ul><ul><li>They then call forklift to load truck </li></ul><ul><li>Creates “idle” time between processes </li></ul>
    18. 18. Refining Existing Processes – With RFID <ul><li>Forklift selects full pallet for shipment, picks the pallet from storage </li></ul><ul><li>Forklift approaches ship preparation tunnel, photoeye triggers process </li></ul><ul><li>Antenna reads pallet tag and case tags on the pallet </li></ul><ul><li>System identifies pallet and prints shipping label and tag </li></ul><ul><li>Label ready by the time that forklift reaches end of tunnel </li></ul><ul><li>Pallet taken directly to outbound staging </li></ul><ul><li>Idle time eliminated completely </li></ul>
    19. 19. Refining Existing Processes – With RFID <ul><li>Before RFID: </li></ul><ul><li>Operator bar code scans part number and serial numbers on each individual box </li></ul><ul><li>WMS system verifies product and quantity </li></ul><ul><li>Pallet is then shrink wrapped </li></ul><ul><li>With RFID: </li></ul><ul><li>Pallet rotates on shrink wrap machine while antennas read case EPC’s from each box </li></ul><ul><li>WMS verifies product and quantity </li></ul><ul><li>Results: </li></ul><ul><li>Eliminates manual scan step </li></ul><ul><li>Reduces cycle time incorporating scanning with wrapping operation </li></ul>
    20. 20. Receives inkjet cartridges in bulk & packages them for different markets Starting at pallet and case level outbound, will then “walk” back up the process chain to Receiving Includes systems changes to Shop Floor Control, PLC’s & WMS Chester Plant Pilot
    21. 21. Receives components and raw material, manufactures printers then ships finished goods to Latin America Region Starting at manufacturing, will then “walk” down the process chain to Shipping Sao Paolo Printer Plant Tags carry quality & control data thru the process with the unit as it is built as well as EPC Code
    22. 22. Pilot Horizontal & Vertical Scope Shaping SN creation assy line functional test / audit bulk pack CIMATION (log test) Pass/Fail Bulk Info BaaN completion pallet assy audit invoice generation BaaN raw material flow tracking stiletto product born pass/fail log pallet tracking pass/fail log invoicing data FGI backflush product log pallet tracking Pilot Operational Areas Affected warehousing pass/fail log SAO PAULO Brazil Chester Va, USA
    23. 23. RFID – PILOT SCOPE <ul><li>Tag placing (bottom case) Read: </li></ul><ul><li>Material Q.A. </li></ul><ul><li>ERP Transfer WH to WIP </li></ul><ul><li>Log: </li></ul><ul><li>SN </li></ul><ul><li>Test pass/fail </li></ul><ul><li>Audit </li></ul><ul><li>Back flush on ERP system </li></ul><ul><li>Read: Mfg pass/fail Log: </li></ul><ul><li>Product option </li></ul><ul><li>Localization Stations (5) </li></ul><ul><li>Back flush on ERP </li></ul>Read: submit product information to Baan (Flex) for invoicing processes. HP SAP will depend on DS project implementation
    24. 24. Further potential RFID efficiencies
    25. 25. He is scanning every printer engine to capture the serial number And he is applying a barcode label by hand If every incoming engine was tagged, then serial number could be captured automatically. Label could then be printed and applied automatically further down the conveyor
    26. 26. Component Verification <ul><li>Every item that goes into the box is scanned by hand </li></ul><ul><li>Usually under a scanner positioned over the work station </li></ul><ul><li>If every item was tagged then the items would simply be put in the box </li></ul><ul><li>With an automatic verification of all contents against SKU prior to pack out </li></ul><ul><li>A classic example of speeding up the line </li></ul>
    27. 27. He is scanning one product barcode to ensure the right product is picked Correct pick will be verified on his on board screen If items were tagged then no scan would be necessary. Product would be verified as forklift approaches pallet and failing a warning of incorrect product, driver spends all of his time and effort in moving the product on to the next process Everything stops for this process
    28. 28. Mixed Pallets <ul><li>Less than full pallet quantity </li></ul><ul><li>One or more products </li></ul><ul><li>Can only be barcode scanned by un-stacking pallet </li></ul><ul><li>RFID wouldn’t require this </li></ul>
    29. 29. Mixed pallet consolidation areas could be built here With readers attached to building infrastructure With minimum pallet movement after content verification to wrap station
    30. 30. Outbound Staging Pallet staged for loading – pallet label / tag visible Barcode scanned to confirm staging location
    31. 31. Pallet staged for loading Barcode scanned to confirm which dock door pallet went out of
    32. 32. Reader would be positioned at dock door Reader suspended above temporary staging lane
    33. 33. It Couldn’t Be Done Before RFID <ul><li>Proof Of Delivery is an essential part of trading between the shipper and the Customer </li></ul><ul><li>Today that process lives or dies at just one point in the process – the Receiving Dock </li></ul><ul><li>If this goes wrong, then an expensive and time consuming reconciliation process is launched </li></ul><ul><li>Our research shows that it needn’t have about 80% of the time </li></ul><ul><li>It also impacts supplier / Customer relationships </li></ul><ul><li>RFID can help us avoid much of this pain </li></ul>
    34. 34. Tracking Item Movement Previously restricted to Receiving Dock Delivery can now be “proved” at many points in the process
    35. 35. Sample Product Flow Analysis
    36. 36. Potential Technology Direction <ul><li>Readers </li></ul><ul><ul><li>Drive at least 32 antenna </li></ul></ul><ul><ul><li>Power Over Ethernet ( POE ) </li></ul></ul><ul><ul><li>Peer to peer communication </li></ul></ul><ul><ul><li>DSP at antenna then fiber or Ethernet to controller </li></ul></ul><ul><li>Tags </li></ul><ul><ul><li>< US$0.5 </li></ul></ul><ul><ul><li>Peer to peer communication ( tags inside pallet talk to those on outside ) </li></ul></ul><ul><ul><li>Active pallet tag to manage item tags </li></ul></ul><ul><li>Software </li></ul><ul><ul><li>Migrate middleware/reader control functionality to reader </li></ul></ul>
    37. 37. HP’s RFID Profile <ul><li>We are a technology company with a long solid reputation for innovation </li></ul><ul><li>Our hardware and software offerings range from handhelds to the world’s most powerful clusters </li></ul><ul><li>We ship products to all of the world’s major retailers </li></ul><ul><li>Deep experience in Consulting & Integration services </li></ul><ul><li>HP’s Supply Chain is one of the largest in the world </li></ul><ul><li>We are implementing RFID in our own manufacturing & distribution operations </li></ul><ul><li>This combination of characteristics has enabled us to make considerable progress on our path to RFID </li></ul>
    38. 38. Q & A