Pete Abell Senior Partner/Cofounder

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  • Recurring revenue business: Favored pricing for vertical market leaders Partnership with transportation/conveyance companies Leveraged network infrastructure among multiple customers Savi consolidates and manages all data (ASP) Flat-rate usage fee on a per container per day basis Significant infrastructure reuse as network grows Usage fee drops yearly Long-term contracts Credits for the numbers: 1. U.S. Companies spend 11.6% of revenue on supply chain : The Performance Measurement Group, LLC, A PRTM Company 2. Visibility Service Provider Opportunity : Value added x 50% trackable x 33% to visibility providers x 33% to network owner 3. Others sources : Carnegie Mellon and Stanford University
  • Pete Abell Senior Partner/Cofounder

    1. 2. Pete Abell Senior Partner/Cofounder The ePC Group, Ltd.
    2. 3. What’s in Store for Retail Technology The Retail Conference March 2004 Pete Abell Senior Partner ePC Group, Ltd
    3. 4. Agenda <ul><li>Retail Technology Trends </li></ul><ul><li>Data Standards </li></ul><ul><li>Collaboration Areas </li></ul><ul><li>Additional Technologies </li></ul><ul><li>EPC RFID </li></ul><ul><li>Business Issues </li></ul><ul><li>Supply Chain Benefits </li></ul>
    4. 5. Retail Technology Trends <ul><li>Standards </li></ul><ul><ul><li>Wal*Mart </li></ul></ul><ul><ul><li>GCI </li></ul></ul><ul><li>Other Industries/Regulators </li></ul><ul><ul><li>Payment </li></ul></ul><ul><ul><li>Homeland Security etc. </li></ul></ul><ul><li>Wireless </li></ul><ul><li>Store Level vs HQ </li></ul>
    5. 6. Data Standards <ul><li>Data standards will impact entire infrastructure : </li></ul><ul><li>EPC- visibility throughout supply chain </li></ul><ul><ul><li>Stores - Limited </li></ul></ul><ul><ul><li>Home - On Horizon </li></ul></ul><ul><li>Sunrise 2005 </li></ul><ul><li>Data Synchronization </li></ul>
    6. 7. Payment Methods <ul><li>Smart Card Convergence : </li></ul><ul><li>Application Slots - Enable cross-company loyalty programs </li></ul><ul><li>Wireless Options - Major trend in drive-through usage . </li></ul><ul><ul><li>Needed for Web-order/store pickup. </li></ul></ul><ul><li>Biometrics- Decrease fraud </li></ul><ul><ul><li>Fingerprint and other biometrics consumers </li></ul></ul><ul><ul><li>Employee and supplier verification </li></ul></ul>
    7. 8. Transportation Management <ul><li>Web-based real-time transportation management </li></ul><ul><li>Transportation optimization visibility across the entire supply chain. </li></ul><ul><li>Technology is available now. </li></ul>
    8. 9. Supplier Collaboration <ul><li>Collaboration with suppliers enables lowest cost of goods. </li></ul><ul><li>PTX , CTX or ? : </li></ul><ul><ul><ul><ul><li>Private Trading Exchange </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Wal-Mart using Verticalnet/Retaillink </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Target using Yantra </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Consortium Trading Exchanges - i.e. GNX, WWRE, Transora </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Extranet- One way to suppliers </li></ul></ul></ul></ul>
    9. 10. Vertical Partnerships <ul><li>Retailer/Manufacturer or Complementary Retailers </li></ul><ul><ul><li>Partner to Broaden Reach to Consumer </li></ul></ul><ul><li>Hypothetical Examples: </li></ul><ul><ul><li>Return Block Buster videos to any Walgreens location </li></ul></ul><ul><ul><li>Amazon.com order delivered to Sears stores for pick up </li></ul></ul>
    10. 11. Workforce Management <ul><li>Employee Information Portal </li></ul><ul><ul><li>Integrate information for closed-loop workflow </li></ul></ul><ul><ul><li>Single, role based interface for the store and field personnel. </li></ul></ul><ul><li>Clientelling Devices </li></ul><ul><ul><li>Combo PDA/Cell phone or special purpose PDAs </li></ul></ul><ul><ul><li>Retail employees sell to consumers on store floor. </li></ul></ul>
    11. 12. Advanced Retail Planning & Optimization: <ul><ul><li>Forecast-based financial/assortment plans, </li></ul></ul><ul><ul><li>Attribute affinities between old and new items </li></ul></ul><ul><ul><li>Local Market Assortments </li></ul></ul><ul><ul><li>Multiple Consumer Channels (e.g. Maytag –Retailer Sales + Service site) </li></ul></ul><ul><ul><li>Integration of Advertising, Marketing and Promotions (AMP) </li></ul></ul><ul><ul><li>Retail Revenue Management </li></ul></ul>
    12. 13. Brand Asset Management <ul><li>Content </li></ul><ul><li>Digital Assets </li></ul><ul><li>Product Content Management </li></ul><ul><li>Specification Management </li></ul>
    13. 14. EPC RFID Mega-Transformational Impact <ul><li>Early Signs of Rapid Adoption $1T in sales </li></ul><ul><ul><li>Marks & Spencer, Wal-Mart, DOD, Tesco , Metro, Target , Albertsons, etc . </li></ul></ul><ul><ul><li>More Retailers to come this year </li></ul></ul><ul><ul><li>Supply Chain - First </li></ul></ul><ul><ul><li>Large and Small Suppliers </li></ul></ul><ul><ul><li>Supermarkets/FMCG – Must Keep Supply Chain Costs Within Shooting Distance of Wal-Mart </li></ul></ul><ul><li>Scratching the Surface of RFID’s Potential </li></ul>
    14. 15. Retail Industry Perspective <ul><ul><li>Watching Closely </li></ul></ul><ul><ul><li>Negative to Change </li></ul></ul><ul><ul><li>Unaware of Realities </li></ul></ul><ul><li>Regulatory Bodies Pushing Adoption </li></ul><ul><ul><li>Homeland Security - 2003 </li></ul></ul><ul><ul><li>FDA Counterfeit Drugs - 2004 </li></ul></ul><ul><ul><li>BioTerrorism Preparedness Act - 2002 </li></ul></ul><ul><ul><li>COOL </li></ul></ul><ul><ul><li>EU Food Act </li></ul></ul>
    15. 16. 150+ RFID Projects (ePC Group Tracking) <ul><li>Marks & Spencer – All Fresh Food Trays </li></ul><ul><ul><li>230 Suppliers 10% increase productivity- No cost increase </li></ul></ul><ul><li>Goldwin Sportswear – Grey Market Reduction – 2% of sales </li></ul><ul><li>Findus – Temperature Sensing Frozen Meat/Chicken/Fish 2 Weeks extra Shelf Life </li></ul><ul><li>EU - Tesco, Metro, Sainsbury, Woolworths, Waitrose, Carrefour, DHL, Nokia, Argos, etc. </li></ul><ul><li>US – Wal-Mart, Home Depot, CVS, Target, AHOLD, Gillette, Kimberly Clark, P&G, UniLever, etc. </li></ul>
    16. 17. RFID Themes <ul><li>Bulk Read, No Line of Sight, Space, Time and Status </li></ul><ul><li>Multiple Industries Beyond Retail/CPG </li></ul><ul><ul><li>DOD, DHL, Payment Systems </li></ul></ul><ul><li>Faster Adoption Item Level </li></ul><ul><ul><li>Homeland Security </li></ul></ul><ul><ul><li>Bio Terrorism Act </li></ul></ul><ul><ul><li>FDA Guidelines on Drugs </li></ul></ul><ul><ul><li>High Value Business Cases </li></ul></ul><ul><li>Understand the Technology Choice </li></ul><ul><li>Benefits and Savings Counterbalance Costs </li></ul>
    17. 18. EPC RFID <ul><li>A Short Primer on RFID </li></ul>
    18. 19. EPC RFID Definitions <ul><li>EPC - Electronic Product Code </li></ul><ul><ul><li>96 Bits + (128 R/W) </li></ul></ul><ul><ul><li>AI + GTIN + Serial Number + Addtl. User defined data </li></ul></ul><ul><li>RFID - Radio Frequency Identification </li></ul><ul><ul><li>The Technology </li></ul></ul><ul><ul><li>Frequencies </li></ul></ul><ul><ul><li>Range </li></ul></ul>
    19. 20. Source Marking Technology
    20. 21. DC/Truck/Store/Home Technology
    21. 22. Apply the Right Technology to the Conveyance Layer 5: Movement Vehicle Layer 4: Container Layer 3: Unit Load Layer 2: Transport Unit Layer 1: Packaging Layer 0: Item Active RFID Satellite Passive RFID
    22. 23. Level of Automation Device Cost ($) Real-time locating sys. (RTLS) $20-100 Two-way active RFID – GTAG $5-$25 Active beacon RFID $1.25-$5.00 Short range passive RFID $.15-.50 Other Satellite GPS - $75-300 Very short range passive RFID $.02-.06 (EAS) Bar code - $.001 Semi-Active RFID $.50-5.00 Costs and Types of RFID Manual entry
    23. 24. Which offers a large opportunity for value-added solutions 1. Carnegie Mellon, Stanford University, AMR Research $180 B – $300 B Cost of Waste $3 Trillion Total Annual Global Supply Chain Spending 6-10% Estimated Loss and Waste Due to Poor Supply Chain Visibility Per Year 1 Worldwide
    24. 25. Standards Bodies <ul><li>Global Standards designed EAN.UCC- EPCglobal </li></ul><ul><li>Continued Research - Auto-ID Labs - US, UK, Australia, Switzerland, Japan, China </li></ul><ul><li>ISO and ANSI </li></ul>
    25. 26. Bar Code Differences <ul><li>No line-of-sight required </li></ul><ul><li>100-1,000 Tags per Sec Read Rate </li></ul><ul><li>Passive & active chips </li></ul><ul><li>Read only or read/write (with ‘locked’ sections) </li></ul><ul><li>Long & short range </li></ul><ul><li>Carrier for sensing devices </li></ul>
    26. 27. Estimated Total Costs - Supply Chain Today <ul><li>Warehouse incl. HW/SW/Integration - $1-2M </li></ul><ul><li>Per Store (50K sq. ft coverage) $100K </li></ul><ul><li>HQ Systems $10-40M </li></ul><ul><li>Annual Tag costs $.15-.90 per tagged item (Supplier/Private Label) </li></ul>
    27. 28. Recommendations <ul><li>Remember “The Graduate” - Buy Plastic </li></ul><ul><li>Establish Global RFID Policy </li></ul><ul><li>Use Professional RF Engineers to assess problems and suggest solutions </li></ul><ul><li>Do not do this just for Wal*Mart </li></ul><ul><li>Make it work within your own 4 walls </li></ul><ul><li>Look at your own Supply Chain for savings </li></ul><ul><li>Establish behavior change leadership </li></ul><ul><li>“RFID vendors want to ship silicon not solve your problem” - John Greaves </li></ul>
    28. 29. [email_address]

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