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  • 1.  
  • 2. Wal*Mart Case Study: RFID & Supply Chain Management
    • Angrish, Sangita
    • Chivukula, Venkata S.
    • DeWitt, Brendon
    • Patel, Raxesh
    • Shamsi, Shazeb
    • Yellapragada, Ramachandra
    TEAM MEMBERS
  • 3. Agenda
    • Introduction to RFID
    • Introduction to Supply Chain Management (SCM)
    • Introduction to Wal*Mart and its Business Processes
    • RFID in Wal*Mart
    • Current RFID Usage
    • Limitations and Challenges of RFID
    • Future of RFID
  • 4. Introduction
    • What is RFID ?
    • Why RFID over Bar-Code ?
    • RFID Working and Infrastructure
  • 5. What is RFID?
    • Electronic tagging technology that allows an object, place, or person to be automatically identified at a distance without a direct line-of-sight, using an electromagnetic challenge/response exchange.
  • 6. RFID
    • 40 years old technology
    • Why being Used NOW?
        • right time to use the technology
        • Benefits OUTWEIGH the Deployment Costs
  • 7. Why RFID over Barcode ?
    • Ability to read without line-of-sight
    • Serialized numbering scheme enables more powerful
        • Understanding
        • Diagnosing
        • Controlling of Supply Chain
    • Serial numbers provides individual entity tracking and much more detailed behavior of SCM than UPC or EAN used in Bar codes
    • No duplicate reading of the same tag – a possibility in Bar codes
    • More powerful sensor-network and monitoring-system than bar-code systems.
  • 8. RFID Components RFID Reader TAG Antenna Silicon Chip Substrate
  • 9. Working of RFID
    • Reader generate signals that are dual purpose: provide power for a tag, and create an interrogation signal.
    • Tag captures the energy from Reader and executes commands sent by the Reader
    • Tag sends back a signal containing a unique digital ID ( 96-bit serial number) that can be looked up in a database available to the reader to determine its identity, perhaps expressed as a name, manufacturer, SKU (stock keeping unit) number, and cost.
    • Tags are generally passive because they require no batteries or maintenance.
  • 10. RFID Infrastructure
    • Existing software systems
      • UNABLE to handle serial numbers
    • Solution – RFID Middleware
    • RFID Middleware : Layer between RFID readers and the application software
    • Consists of :
        • Lower level device and data management
        • Higher Interpretation level
    Device Management Data Management Context generation and Interpretation
  • 11. RFID Infrastructure (contd.)
    • Lower level devices such as motion sensors, programmable logic arrays and human interfaces fetch data and provides to Data management layer
    • Data management layer provides some functionality of filtering data due to intermittent appearances and disappearances
    • After the data management layer yields data, the Interpretation layer extracts inference from such data and forwards it to the applications that deploy RFID
  • 12. Up Next……
    • Introduction to RFID
    • Introduction to Supply Chain Management (SCM)
    • Introduction to Wal*Mart and its Business Processes
    • RFID in Wal*Mart
    • Current RFID Usage
    • Limitations and Challenges of RFID
    • Future of RFID
  • 13. Introduction to Supply Chain Management
    • Supply Chain Management
      • Coordination of a network of facilities and distribution options
      • Includes procurement, processing and distribution
    • Five core processes
      • Planning
      • Sourcing
      • Making
      • Delivering
      • Returning
    • Integration of these processes to maximize benefits
  • 14. Introduction to Supply Chain Management (contd.)
    • Three levels of supply chain management
      • Strategic – linked to corporate strategy
      • Tactical
      • Operational – involve day to day activities
  • 15. Introduction to Supply Chain Management (contd.)
    • Overall Goal
      • Optimize supply chains
      • Provide more accurate and time sensitive information
      • Maximize sales and profits
  • 16. Introduction to Supply Chain Management (contd.)
    • RFID and Supply Chain
      • Provide real time information
      • Better readings of customers and markets
      • Ability to provide right products at the right times
    • Deloitte & Touché benchmark initiative
      • Only 7% of companies managing supply chain effectively
      • These 7% are 73% more profitable than other companies
  • 17. Up Next……
    • Introduction to RFID
    • Introduction to Supply Chain Management (SCM)
    • Introduction to Wal*Mart and its Business Processes
    • RFID in Wal*Mart
    • Current RFID Usage
    • Limitations and Challenges of RFID
    • Future of RFID
  • 18. Wal-Mart Introduction and Business Processes
  • 19. Operations
    • Wal Mart Stores
      • Largest segment accounting to about 67.3% of 2005 fiscal sales
      • Super centers
      • Discount stores
      • Neighborhood Markets
    • SAM’s Club
      • Consists of membership warehouse clubs accounting to 13% of 2005 fiscal sales
    • Wal-Mart International
      • Accounted to 19.7% of 2005 sales
  • 20. Business Model of Wal*Mart
    • Market Strategy of Wal*Mart
      • Everyday Low prices (EDLP)
      • Employs both “Clicks & Bricks” and “Bricks & Mortar” strategy
    • Organizational Development
      • Specialty Division
      • Retail Division
    • Competitive Advantage
      • Price match guarantee
    • Market opportunity
      • B2B Single firm network
      • B2C E-Tailer Business Model
  • 21. Supply Chain Management at Wal*Mart
    • Procurement and Distribution
    • Logistics Management
    • Inventory Management
  • 22. Procurement and Distribution
    • Procurement
      • Procurement involves getting goods from different manufacturers
      • I nvolves reducing the purchasing costs as far as possible
      • Goods procured directly from the manufacturers, bypassing all intermediaries
  • 23. Procurement and Distribution
    • Distribution
      • Distribution centre is divided in different groups depending on the quantity of goods received
      • Goods to be used internally in US arrive in pallets & imported goods arrive in re-usable boxes .
      • Employees have access to the inventory levels of all the products
      • Employee makes two scans-
        • For identifying the pallet
        • For identifying the location from where the stock had to be picked up
      • Bar codes & RFID used to label different products, shelves & bins
      • The hand held computers guide employee to the location of the specific product.
        • The quantity of the product required from the center is entered in the hand held computer, which updates the information on the main central server.
        • computers enable packaging department to get accurate information such as storage, packaging & shipping,
          • Saves time in unnecessary paperwork.
          • Enables supervisors to monitor their employees closely
  • 24. Logistics Management
    • Involves managing transportation & delivery of products
    • More than 7000 company owned trucks services Distribution centers
    • This enables shipping of goods from distribution centers to the stores within 2 days and replenish the store shelves twice a week
    • “ Private Fleet Driver handbook” – tracking drivers activities
    • “ Cross Docking” – from Manufacturer to Customer
    • Cross Docking enabled “demand chain”
    • “ Demand chain” - C ustomers ‘pull’ the products instead of retailers having to “push” them
  • 25. Inventory Management
    • Wal*Mart set up its own satellite system in 1983
    • Reducing unproductive inventory as far as possible
    • Use of Bar-code & RFID technologies for easy packing and counting of the inventories, efficient picking and receiving & proper inventory control of the products
    • “ Massively Parallel Processor “ - enables easy tracking movement of goods & stock levels across all distribution centers and stores
    • Use of “Magic Wand” to keep track of inventory in stores
    • Use of sophisticated algorithm and technology infrastructure to forecast the quantities of each item to be delivered, based on inventories in the store and customer needs
    • Centralized inventory database
  • 26. Up Next……
    • Introduction to RFID
    • Introduction to Supply Chain Management (SCM)
    • Introduction to Wal*Mart and its Business Processes
    • RFID in Wal*Mart
    • Current RFID Usage
    • Limitations and Challenges of RFID
    • Future of RFID
  • 27. RFID in Wal*Mart
    • Initiated the plan to implement RFID in its supply chain in June 2003
    • Subsequently, reinforced the RFID standards and specifications in November 2003
  • 28. RFID in Wal*Mart
    • Specification of RFID Components
    • TAGS
    • EPC
    • Why RFID?
    • EFFICIENCY
    • WAL*MART SUPPLIERS
  • 29. Specification of RFID Components
    • EPC
    • Type of Chip
    • TAG
    • Distribution Centers to accept RFID tagged products
  • 30. Specification of RFID Components
    • EPC
      • 96 bit unique number to identify an item in the supply chain.
      • Global Trade Identification Number.
    • EPC data format on the chip is Class 1 Version 2 communication protocol.
    • Class 0: Factory programmable protocol
    • Class1: Provides the capability to write serial numbers on the chip
  • 31. Specification of RFID Components
    • TAGS
      • Operates in the UHF spectrum
          • 868 MHz to 956 MHz
      • Carries the 96-bit serial number
      • Is field programmable
        • Allows suppliers to write serial numbers to the tags while being applied to the products
  • 32. WHY RFID?
    • OBJECTIVE: To increase the efficiency of its supply chain.
    • It will
      • Enhance Transparency of supply chain
      • Help in minimizing cost and labor
      • Strengthen inventory control
  • 33. Efficiency
    • Wal*Mart aims to reduce the practice of manually placing the order
    • Has achieved 10% reduction in the case
    • Implementation of RFID tags in Wal*Mart’s inventory has helped boost sales by keeping shelves better stocked
    • Usage of RFID has reduced out-of-stock merchandise by 16% at the stores that have implemented RFID tags for more than a year.
  • 34. RFID COST
    • Cost Benefit Analysis
    • Initial Research indicated cost of RFID tag was above $1 .
    • At present, TAG costs about 30 cents
    • Cost will drop to less than 5 cents, if deployed on a large scale
    • Analysts suggest that the tag should be approx. 1 cent for small ticket items
  • 35. Wal*Mart Suppliers
    • 130 major suppliers ship merchandise to Wal*Mart distribution centers with about 5.4 million tags
    • By 2006, Wal*Mart aims to mandate RFID implementation for all its suppliers
  • 36. Wal*Mart Suppliers
    • Major Suppliers:
      • Gillette
      • Hewlett-Packard
      • Johnson & Johnson
      • Kimberly Clark
      • Kraft Foods
      • Nestle
      • Proctor and Gamble
  • 37. Wal*Mart Suppliers
    • Kimberly-Clark
      • Manufacturer of paper goods products
        • Eg: Kleenex, Huggies
      • Tagged Scott paper Towels shipment with RFID tags
      • First supplier to use RFID – April 2004
  • 38. Up Next……
    • Introduction to RFID
    • Introduction to Supply Chain Management (SCM)
    • Introduction to Wal*Mart and its Business Processes
    • RFID in Wal*Mart
    • Current RFID Usage
    • Limitations and Challenges of RFID
    • Future of RFID
  • 39. Successful Implementation of RFID
    • Harvard Research suggests a seven step model for successful implementation of RFID.
  • 40. Seven Step Model
    • Understand our visibility requirements
    • Query other end users about recommendations for trials
    • Move into the action phase in a real-world setting in a pilot/trial mode
    • Evaluate technical performance
    • Consider the economic benefits
    • Understand the impact
    • Decide whether or not to move forward with a larger scale implementation
  • 41. Major Companies implementing RFID technology
    • Volkswagen
    • Gillette
    • Tesco supermarket tries out smart tagging
    • Sun Microsystems sets up RFID test centre in Scotland
    • I.B.M. Expands Efforts to Promote Radio Tags to Track Goods
    • Texas Instruments
  • 42. Up Next……
    • Introduction to RFID
    • Introduction to Supply Chain Management (SCM)
    • Introduction to Wal*Mart and its Business Processes
    • RFID in Wal*Mart
    • Current RFID Usage
    • Limitations and Challenges of RFID
    • Future of RFID
  • 43. Limitations of RFID
    • Why the implementation of a 40 year old technology is taking so long?
    • As pointed out earlier, benefits are gradually outweighing the deployment costs
    • Limitations and challenges: Barriers to Quick Deployment
  • 44. Limitations and Challenges of RFID (contd.)
    • Global standards
      • Variety of RFID standards and technologies
    • Technology problems
      • Read-range distances not sufficient to allow for consumer surveillance
      • Defective and poorly performing RFID tags
      • Damaged RFID tags
    • Data management
      • Lack of development of right information management tools
    • Cost
      • Tags, Tag Readers, Databases
  • 45. Limitations and Challenges of RFID (contd.)
    • Industry Standards
      • Privacy advocates are insisting the companies to state their intended use of the technology due to lack of industry standards
    • Privacy and civil liberties
      • RFID tags can be embedded into/onto objects and documents without the knowledge of the individual
    • Complex programming
    • Potential job losses
  • 46. RFID Practices that Should be Prohibited
    • Merchants must not force their customers into accepting RFID tags in the products they buy.
    • RFID must not be used to track individuals absent informed and written consent of the data subject – directly or indirectly.
  • 47. Up Next……
    • Introduction to RFID
    • Introduction to Supply Chain Management (SCM)
    • Introduction to Wal*Mart and its Business Processes
    • RFID in Wal*Mart
    • Current RFID Usage
    • Limitations and Challenges of RFID
    • Future of RFID
  • 48. Future of RFID
  • 49. Future of RFID
    • For Retailers ??
      • The technology will bring a revolution.
      • It will be widely used in retail and consumer goods, automotive, healthcare, military, postal department and other scientific uses.
    • For Customers??
      • If the consumers think the technology is too complex, confusing or threat to their privacy…
    • Will the technology survive?
  • 50. Key Factors for RFID
    • Setting up more standards in the industry
    • Bringing down the cost of RFID
    • Level of understanding and experience
  • 51. Demonstration Of Wal*Mart SCM Manufacturer Wal*mart Warehouse Wal*Mart Store
  • 52. Movie Time http://www.future-store.org/servlet/PB/- s/1rop28q1ikm3s91d05t0h15w06yt14q0kbq/menu/1004023_l2/index.html
  • 53. THANK YOU Questions & Suggestions?

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