The presentation talks about IT vendors providing solution in Supply Chain Security space.

1. Supply Chain Security
20 October 2012
Opportunity Lies In Threat - Surajit Paul
© 2009 IBM Corporation

2. Supply Chain Security
Agenda
Introduction
Financial Loss
Technology
RFID
Risk
Technology Vendors
Q&A
2 © 2009 IBM Corporation

3. Supply Chain Security
Introduction
 Cargo Theft is an international phenomenon which is a primary concern for the traders and
3PL providers.
 Indirect loss comprises of the cost associated with replacement of goods, loss of business,
reputation damage, and price undercutting by the sale of stolen properties.
 While Australia and China being among the low risk countries, Russia is having high risk of
cargo theft.
 As per the study conducted by the Transported Asset Protection Association (TAPA), at
present worldwide annual loss due to cargo theft is estimated to be US $50 Billion.
3 © 2009 IBM Corporation

4. Supply Chain Security
Financial Loss due to Cargo Theft
 As per the statistical data collected from various sources, following is a snapshot of the
estimated direct annual loss due to cargo theft at various regions across the globe
$30
Annual Loss in Billion USD
$30.00
$25.00
$20.00
$15.00 $10.80
$10.00 $5
$1.20
$5.00 $0.50
$0.13
$0.00
EMEA USA Canada India Brazil Argentina
Data Source: FreightWatch, TAPA
4 © 2009 IBM Corporation

5. Supply Chain Security
Technology
 The risk of cargo theft can be mitigated by pervasive adoption of sensory technologies like
RFID and GPS which increases supply chain visibility, irrespective of cargo being stolen at
water, in-transit on the truck or in a warehouse.
 The value of the RFID market in 2012 is US $7.46 Billion. The RFID world market is
estimated to surpass US $20 Billion by 2014. [Wikipedia]
 Today Radio Frequency Identification (RFID) is an integral part of our life whether it’s an
access management, apparel tracking at shopping malls, brake free toll collection,
automated inventory tracking, retrieval of stolen vehicles, animal identification, supply chain
visibility, theft prevention or automated corrosion, temperature and moisture detection in
infrastructure management.
 On 14th December 2010, Bellagio casino in Las Vegas was robbed of US $1.5 Million worth
of chips. Using RFID tags embedded inside, those chips were deactivated immediately
rendering them unredeemable for cash value.
Source: Wikipedia
5 © 2009 IBM Corporation

6. Supply Chain Security
RFID
 Several types of RFID devices exist, yet RFID devices may be broadly categorized in
following two types –
– Active: Active tags require a power source; it can either be connected to a powered
infrastructure or use energy stored in an integrated battery
– Passive: The tag’s lifetime is limited by the stored energy balanced against the number
of readings the device must undergo.
 An active RFID must be embedded with a battery, and a passive RFID receives energy from
the reader / interrogator while a semi-passive RFID can support both. A passive RFID tag
consists of an antenna, a semiconductor chip and some form of encapsulation; therefore it’s
a suitable option for SKU level tracking in the retail industry due to its low cost of production,
while an active RFID device can be applied for container level tracking due to its high
manufacturing cost.
 Retailers are considering RFID investment primarily for in-store inventory control, POS
automation and loss prevention due to shoplifting, theft etc. Some of the Retailers adopting
RFID are Dillard’s Inc, Bloomingdale’s, Macy’s, American Apparel, Charles Vogele, Metro,
Marks and Spencer, Jones Apparel Group, Pantaloon Retail etc. American Apparel and
Macy’s are planning to rollout RFID to all the stores in 2012.
Source: IDC Retail Insights
6 © 2009 IBM Corporation

7. Supply Chain Security
RFID
 Some of the RFID post implementation benchmarks in the Apparel industry are –
– Up to 30% improvement in inventory accuracy
– Up to 50% of Out-of-Stock eliminated
– Up to 96% reduction in the amount of time to cycle count
 Since 2003, Wal-Mart has been working with the top suppliers to implement RFID for
complete supply chain visibility, which also addressed the risk of cargo theft to certain
extent.
Source: IDC Retail Insights, FreightWatch
7 © 2009 IBM Corporation

8. Supply Chain Security
Risk
 The cost of production and RFID implementation is the greatest barrier to its wide spread
adoption for commercial use.
 The cost of production of a passive RFID tag varies from US $0.05 to US $10.00
 The cost for an active RFID tag varies from US $5.00 to several hundred US dollars.
Source: IDC Retail Insights, FreightWatch
8 © 2009 IBM Corporation

9. Supply Chain Security
Technology Vendors
Transportation Transportation Real Time Transportation Battery- Cargo Portal Global Visibility
Predictive Planning & Routing Management Powered for
Analytics & Optimization RFID TMS
Simulation
4flow Accenture Descartes Freight Gate Aero Scout Descartes Amber Road
Systems Systems
IBM-Sterling Barloworld SC Manhattan GT Nexus Ekahau GLS HK Descartes
Commerce Software Associates Systems
JDA Software Cap Gemini Oracle JDA Intelleflex GT Nexus GT Nexus
Quintiq Infor Ortec Log-Net RF Code Inttra JDA
SAS JDA Quintiq Management Unisys Log-Net
Dynamics
Terra Lawson Red Prairie Manhattan Oracle
Technology Associates
SAS TMW Oracle SAP
SAP
Source: Gartner Research
9 © 2009 IBM Corporation

10. Supply Chain Security
Technology Vendors
Carrier RFID for Wireless/ Mobile Transportation Automated GIS for Mapping/
Scorecard Logistics Integration Tracking Vehicle Visualization/
Tracking Analytics
GT Nexus Hi-G-Tek Aero Scout Alien Cadec Autodesk
JDA IBM AirClic Checkpoint GPS Insight Descartes Systems
Systems
Lean Logistics Impinj Cadec GlobeRanger Hi-G-Tek Esri
Management Intermec Isotrak GPS Insight Intermec Google
Dynamics
Manhattan Motorola Motorola Hi-G-Tek Isotrak Intergraph
Associates
Mercury Gate Savi People Net IBM People Net Navtec
Oracle TMS Tego Qualcomm Intermec Qualcomm Oracle TMS
IBM-Sterling Xerafy Sprint Isotrak SkyBitz Pitney Bowes
Commerce
Source: Gartner Research
10 © 2009 IBM Corporation

11. Supply Chain Security
Q
&
11
A © 2009 IBM Corporation