Copenhagen Business School: Container Centralen - Open Innovation Case


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From a lecture at CBS. The CC-project is presented as a case on open innovation. CC delivers an open RFID solution to the European hortucultural industry and by providing the basic infrastructure, a significant number of innovations have been seen across the sector. The solution covers 80.000 users in 22 countries.

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  • CC logos: CC officesRed dots: CC depots
  • Copenhagen Business School: Container Centralen - Open Innovation Case

    1. 1. 1 © 2011 IBM Corporation
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    4. 4. © 2011 IBM Corporation
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    6. 6. Billion6 Source: Cisco IoT 2011 infographic
    7. 7. IBM Global Business Services340.282.366.920.938.463.463.374.607.431.768.211.4567 © 2011 IBM
    8. 8. We are moving into a new scenario where the needs toconnect the physical and digital worlds are exponentiallyincreasing “ ”INSTRUMENTED INTERCONNECTED INTELLIGENTObjects gets sensoring abiliy, technology Objects are interconnected by networks building Ccompetitive power comes from the ability tocontrols awareness of objects Internet of Things analyse and understand network of things
    9. 9. We are ushering in a new wave of innovation Age 6th Wave Age of IT & of Oil, Cars Telecom Age and Mass of Steel, Production 5th Wave Electricity and Heavy Engineering 4th Wave SmarterInnovation Age 3rd Wave of Steam and Railways Products The Industrial Revolution 2nd Wave  Instrumented, interc 1st Wave onnected, and intelligent  Building blocks for a smarter planet  Sustainability 1770 1830 1875 1920 1970 2010 *Source: “Next Generation Green: Tomorrow’s Innovation Green Business Leaders”, Business Week, Feb 4, 2008
    10. 10. The ”Internet of things” is one of the most significant opportunitiesfor business transformation ever, and is relevant for all indstriesSOLUTION EXAMPLES Pharmaceuticals Retail Transportation Food Manufacturing Healthcare Construction • Prevent product • Optimise storage • Process • Provide visibility • Manufactoring • Control and • Improve logistics counterfeiting and inventory improvements due on food history control processes visibility of processes processes to increased logistics • Ensure full • Controlled • Quality control • Improve in- visibility processes traceability in • Improve store transports process quality • Optimise use of product process • Route optimisation • Locate eqipment control • Quality control raw materials deliverables in hospitals • Build additional • Temperature • Construction site • Process • Provide customer • Partner integration customer services controlled • Clinical sensoring security and optimisation services via item based on item transports solutions access control • Regulatory control level identification level identification • Control of farming • Equipment • Distance medicine • Tool-tagging to • Manifacturing process • Real-time location • Product anti- tracking and optimise use and optimisation services to • Patient control and counterfeit control • Regulatory control prevent theft improve visibility services • Item level insight initiatives • RFID baggage • Illness • Integrate physical • Improve work • Integrate analysis • Supply chain tracking identification site with 3D environment and and lab equipment optimisation construction • Geo-location of • Consumer security • Sueveillance model transport items information services • Improve • Security construction process10
    11. 11. IBM Sensor Solutions Tag Antenna Reader © 2009 IBM Corporation
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    14. 14. The Flower Container is the de facto standard for transports offlowers and potplants across Europe  Started in 1976, the Container Centralen system was created due to demand for a returnable transport item solution  Based on and exchange and balancing system leading to increased efficiency and lower number of items needed  3,5 million containers in use, 22M shelves  100.000 users across 22 countries in Europe and nearby, e.g. growers, auctions, transporters, wholesalers, retailers14 © 2011 IBM Corporation
    15. 15. CC provides an european pool system optimising resources acrossthe green sector supply chain  The CC Pool System is in principle based on one-for-one exchange  Empty units are exchanged for full units and vice versa One full unit = one empty unit  Reduced number of transportation units in the entire supply chain  Higher efficiency – lower costs © 2011 IBM Corporation
    16. 16. CC is operating in Europe and US 10 offices and 60 depots in Europe © 2011 IBM Corporation
    17. 17. Container Centralen provides several products using same businessmodel © 2011 IBM Corporation
    18. 18. From 2004 and onwards, an industry group have been focusing onintroduction of RFID in the Green Sector • Closing of the pool – a fair system with no free-riders • Protection of the common industry’ investment (+250 MEUR) • Improved quality of the pool • Cost reduction on Pool Fee • Less sorting of low-quality containers • CC is offering the RFID and Collection Service to retailers • Common European solution for the industry • With a closed pool we can start product development, e.g. shelves, wheels etc. • Opportunity for Track/Trace as next step18 © 2011 IBM Corporation
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    20. 20. The problem: Containers are being counterfeited leading to severeproblems for all involved supply chain partners – from grower toretailer• Containers are counterfeited • Low quality clones causes • Container Centralen by 3rd party severe problems in supply responsible for repair &• Assumed 10%, i.e. 350.000 chain maintenance, but counterfeits units • Primary: Large robots in does not have associated auction houses, transport contracts• Counterfeit operation very fast, competent and until now chain, loss of products un-stoppable20 © 2011 IBM Corporation
    21. 21. However, hardware hackers being one problem, ContainerCentralen was faced by a bunch of other issues in regards toimplementation  To ensure full trust in the supply chain, it is needed to equip 25.000 customers with advanced RFID-equipment  To build a business case for the full industry  The solution needed to be rather open, while maintaining a high level of security  The solution should enforce a high level of security in all levels of the supply chain – in an industry not having a tradition for IT- systems  A very sad history of previous anti-counterfeiting organisations  …how to change behaviours at 100.000 users across 22 countries and very diverse cultures21 © 2011 IBM Corporation
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    23. 23. TECHNICAL CHALLENGE: APPROACH:Make impossible to clone, copy,break and use as widespread • Tag all containers with securelogistics solution at the same tag to count and authenticatetime. Also support use in very • Implement CC RFID inhousedemanding industrial heavy solutionmetal extreeme and high- • Extend to supply chainhumidity environments. partners, e.g. Growers, auction houses, transporters, exporters, retail • Prepare for future track & trace solution across the Green Sector © 2011 IBM Corporation
    24. 24. The overall purpose of the RFID solution is to addres a set ofbusiness problems – but also to initiate a larger vision of improvedefficiency and collaboration in the Green Sector THE CHALLENGE Containers are being counterfeited Increased cost to handle repair Lower quality containers leading to and injected into supply chain and maintenance handling problems in Green Sector THE PROCESS Deliver framework to allow Engage stakeholders in Green Spread solution to partners to partners to build own applications Sector to participate enable authentication using CC authentication THE LONG-TERM VISION Extend solution to handle track & Enable infrastructure to allow for trace cross-partner integration24 © 2011 IBM Corporation
    25. 25. The core of the solution provides a mechanism to ensure full trust among partners in the Green Sector supply chain  Authenticate equipment to build trust and ensure genuine equipment in all handover- situations in the supply chain  Deliver solutions and software components to allow for Green Sector partners getting easy access to use of RTI authentication  It is assumed that 25.000 users will require RFID-equipment for authentication Checkpoint Checkpoint Checkpoint Checkpoint Checkpoint CheckpointGrowers Transport Auctions Transport Cross docking Transport Retail/DC Whole-salers Depot/Wash Checkpoint 25 © 2011 IBM Corporation
    26. 26. Various types of RFID-equipment are usedTags RFID Readers  Previous versions have only been housing with barcode (not used)  New version contains RFID tag and barcode  Encoded with industry standard product codes able to be read by all stakeholders  Additional user memory used by security solution  Custom housing, only used by CC – ”Secret design” © 2011 IBM Corporation
    27. 27. Internally in the CC depots the solution streamlines and controlprocesses around handling containers27 © 2011 IBM Corporation
    28. 28. How to spread the solution: The tag can be accessed in severalways, resulting in several possible usage scenarios The tag acts in general as a normal standard STANDARD RFID DOMAIN RFID-tag and identification can be read by any standard equipment RFID READ Only in the case that secure authentication is •Read unique tag-identifier needed, the security functionalty is used (EPC-code) from tag Possible applications using the tag are •Standard Gen2 RFID-reader can be used therefore not limited to authentication, but the tag can be used in any identification situation •No authentication happening BARCODE READ CC SOLUTION DOMAIN •Read barcode on tag RFID AUTHENTICATION (containing EPC-code) •Read unique tag-identifier •Standard barcode readers and barcode-aware RFID- •Perform authentication readers can be used •Requires certified reader or application with Authentication Component Note: Illustration does not show final tag design28 © 2010 IBM Corporation
    29. 29. For the supply chain partners the CC RFID Solution providesseveral mechanisms to perform authentication and other functionseither out of the box or as custom developed solutions Handheld devices Fixed gate ”Blackbox” • Selected standard handheld • A standard fixed gate-setup • A software component to devices with basic application containing all components to provide authentication and functionality to perform provide authentication and security update functionality to authentication of RTI’s counting when RTI’s are existing partner applications • Currently two models available passing dock-door or other • Integrate into inhouse or – for small-scale and larger entry standard applications scale use All devices, solutions, components delivered via an eco-system of hardware-, software-partners and system integrators29 © 2010 IBM Corporation
    30. 30. Example: The consequence is that variations of track & trace can beimplemented using the basic CC RFID solution as the foundation Checkpoint Checkpoint Checkpoint RFID read points to support Auctions internal processes or partner Growers Transport integration – no authentication needed • Trading partners will be able to use means Whole-salers of track & trace • Equipment can be tracked and under • Provide improved internal visibility some restrictions freight also • Understand use and location of assets • Platform for data capture and integration • Optimise internal processes across partners is required • Standard RFID-equipment can be used However, it is important to note that the CC RFID solution does not provide track & trace in itself today. It is the task of the partner to build applications, integration and infrastructure as needed.30 © 2010 IBM Corporation
    31. 31. The solution will lead to a variety of benefits across the GreenSector GROWER AUCTION TRANSPORT/EXPORT RETAILCOLLABORATION Improvements in process efficiency by gaining full supply chain visibility Ability to connect to Clear responsibilities, increased trust between collaboration partners existing tracking initiatives at low cost Increased visibility on Optimise supply chain Clear responsibilities delivery and partner relations in handling equipmentEFFICIENCY Optimise processes Improvement potential by using solution in by internal supply own context, e.g. Improvement potential chain visibility logistics systems in handling Avoid handling problems by only using high quality Avoid production Avoid production Avoid handling equipment delays and problems delays and problems problems by only using high qualityCOST equipment Stable methods, processes and technologies to clean the pool © 2010 IBM Corporation
    32. 32. Worlds largest RFID implementation Launched: 10th January 2011 • 3.5 million RFID tags in a unique housing/padlock • 25.000 customers have marked their CC Containers • 100.000 users in Europe have been informed • Scanners for 60 CC depots and repair shops in whole Europe • IT infrastructure to handle data and flows • Scanner solutions for all users in Europe • Development of an RFID track and trace solution © 2011 IBM Corporation
    33. 33. The suppliers are ready to handle the demand for products Panmobil Nordic ID Alexander & Mielo33 © 2011 IBM Corporation
    34. 34. The solution was rolled out in January 2011 and was recentlynamed one of RWW’s ”Top 10 Internet of Things Products of 2009”34 © 2011 IBM Corporation
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    36. 36. Remember – this solution was primarily for fighting counterfeiting,but the vision and the underlying infrastructure are generating aplentitude of new innovation opportunities Ad van de Wijdeven, BAAS Plantenservice Managing Director: "We immediately saw the opportunities of the RFID tags on the CC Containers for further speeding up and improving our logistics. Especially in the peak periods, when we process about 12,000 to 14,000 CCs a day, things can easily go wrong, and that requires a lot of communication between suppliers, transporters and our logistical and financial departments. All of this is no longer necessary because we can see at glance exactly what the status of each delivery is. Our suppliers and transporters have the same information. And it all happens automatically!” In conclusion, Baas Plantenservice is proud of these innovative work methods and invites other parties in the distribution chain to join in this initiative. "It is in all of our interests that together we ensure that we maintain the leading position in the horticultural sector," says Ad van de Wijdeven.36 © 2011 IBM Corporation
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    39. 39. Closing remarks The project have been significant success – for CC and the green sector The basic assumption to fight a specific problem (counterfeiting) but to build a vision towards something bigger (track&trace) did succeed and had a positive influence The project has a very different benefit profile across Container Centralen and the rest of the green sector, but have achived full adoption by the industry While deploying new technologies, test and verification have been a significant focus area to ensure the best possible customer experience Openness in architecture and solutions have initiated industry innovation Marketing and communications have been significant focus areas39 © 2011 IBM Corporation
    40. 40. IBM Global Business Services Thank you Kim Escherich IBM Global Business Services +45 2880 4733 @kescherich /in/escherich /escherich © 2011 IBM