Rfid for carton tracking v8
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RFID tagging of cartons at Direct Fulfillment sites could automate shipping and receiving processes, improve inventory audits, and reduce shipping errors. This would increase partner productivity and reduce costs for partners and Cisco. The document outlines a phased pilot program to implement RFID tagging at select DF and SLC sites, estimates initial costs of $4 million, and identifies risks around ensuring partner cost reductions are passed to Cisco. Resources are requested to refine estimates and create an implementation plan.
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Rfid for carton tracking v8
- 1. RFID for Carton Tracking BJ Favaro Technical Leader September 2014 Factory of the Future Program - Supply Chain Operations
- 2. Cisco Confidential 2© 2013-2014 Cisco and/or its affiliates. All rights reserved. Previous Challenges to RFID Cost Performance & Reliability Standards Partners not interested Cisco mandate Decreasing Now at 99.9% Global standard defined Partners engaged/doing their own work Collaborate for mutual benefit
- 3. Cisco Confidential 3© 2013-2014 Cisco and/or its affiliates. All rights reserved. How RFID Can Help Cisco Component Suppliers Global Hubs PCBA Sites Direct Fulfillment Sites Service Logistics Centers Customers Reverse Logistics Centers Service Repair Centers Service Depots Scrap Shipping & Receiving automation X X X X X X X X X X Inventory management X X X X X X X X X X Asset tracking X X X WIP visibility X X X X X WIP automation X Process control X X X X X Traceability X X X X X X X X Increase data accuracy, increase productivity Reduce out-of-stock, reduce shrinkage, increase productivity Reduce capital cost, improve financial compliance, increase productivity Update customers, quantify bottlenecks Streamline processes, increase productivity Detect and report process errors Automate data collection, improve purge/ECO/UMPIRE accuracy
- 4. Cisco Confidential 4© 2013-2014 Cisco and/or its affiliates. All rights reserved. Objective of RFID for Carton Tracking Add RFID tags to cartons at DF sites to: • Automate shipping & receiving at DF sites and SLCs • Execute faster, more accurate inventory audits • Reduce shipping errors Business benefits: • Increase partner productivity to reduce partner & Cisco cost • Improve planning & fulfillment • Reduce customer complaints
- 5. Cisco Confidential 5© 2013-2014 Cisco and/or its affiliates. All rights reserved. RFID label printer and encoder Product line DF Packout RFID fixed reader portal RFID handheld readers Warehousing RFID fixed reader portal DF Outbound/SLC Inbound DF/SLC Outbound Packscan & Pallet Load Outbound Loading docks RFID fixed reader portal Truck load Truck load RFID fixed reader portal ...... Product line Product line
- 6. Cisco Confidential 6© 2013-2014 Cisco and/or its affiliates. All rights reserved. RFID Packout Demo @ FTX Video http://videosharing.cisco.com/p.jsp?i=9703
- 7. Cisco Confidential 7© 2013-2014 Cisco and/or its affiliates. All rights reserved. Packout station equipment = $9,300 X 161 lines Inbound/outbound portal equipment = $11,050 X 91 stations Training & misc equipment per site = $10,500 X 27 sites Partner systems integration cost = $100,000 X 7 partners Total cost = $4,072,000 What Would It Cost to Implement?
- 8. Cisco Confidential 8© 2013-2014 Cisco and/or its affiliates. All rights reserved. How Many Times Are Cartons Scanned? Direct Fulfillment Origin SLC Destination SLC Customer Route A 61% of cartons shipped Route B 5% of cartons shipped Route C 19% of cartons shipped Route D 15% of cartons shipped Scan outbound shipment Scan outbound shipment Scan outbound shipment Scan outbound shipment Scan outbound shipment Scan outbound shipment Scan inbound shipment Scan inbound shipment Scan inbound shipment Receive inbound shipment Receive inbound shipment Receive inbound shipment Scan outbound shipment Scan outbound shipment Scan inbound shipment Receive inbound shipment
- 9. Cisco Confidential 9© 2013-2014 Cisco and/or its affiliates. All rights reserved. What Does It Cost To Manually Scan at SLCs? Process Cost Physical Receiver $ 1,799,616.00 Inbound Receiving $ 6,271,200.00 Cycle Count $ 514,252.00 Physical Inventory $ 108,864.00 Lost Carton Search $ 223,800.00 Outbound Scanner $ 6,614,400.00 Grand Total $ 15,532,132.00 • Cost of labor from 4 of 8 SLCs • Does not include DF sites • Does not include Cisco resources to respond to deviations, or cost to Cisco for rebuilds
- 10. Cisco Confidential 10© 2013-2014 Cisco and/or its affiliates. All rights reserved. FY15 Q3 (Proposal) 2nd Phase :- Other DF sites :- Sites name are TBD Other SLCs :- Sites Name are TBD Time Capabilities Roadmap FY15 Q1 FY15 Q2 (Proposal) 1st Phase:- One DF and One SLC Site Pilot release to put the RFID on the Carton. Program Caron id as RFID. • Add the RFID/Carton id in the ASN/4B2/3B2 and 3B3 messages • Replicate the RFID/Carton id and location in the SAP Hana • Report to show the end to end tracking of carton based on RFID. FY15 Q4 (Proposal) 3rd Phase :- Remaining DF sites :- Sites name are TBD Remaining SLCs :- Sites name are TBD BTS sites ( Pallet level implementation) (FVE,IML, SHK, SEL) . Scoping and Planning FY16 Q1 (Tentative) Align with Cloud Solution :- TBD FY16 Q2 (Tentative) Collect the data Using Autotest Cesium:- TBD
- 11. Cisco Confidential 11© 2013-2014 Cisco and/or its affiliates. All rights reserved. Risks Description Action Partner productivity improvement may not automatically reduce Cisco cost Work with partner managers and partner to agree in advance cost reductions based on agreed upon productivity improvements
- 12. Cisco Confidential 12© 2013-2014 Cisco and/or its affiliates. All rights reserved. Resources to refine cost and benefit estimates, and create implementation plan Request to Move Forward
- 14. Cisco Confidential 14© 2013-2014 Cisco and/or its affiliates. All rights reserved. Arvato DF sites that ship software only (Dublin-BV, Wville-INC) Changes to Cisco software or systems Improvements to Universal Order Visibility Out of Scope
Editor's Notes
- One question Jeff asks is, if RFID is so great, why aren’t our partners investing already? Equipment and implementation costs were high, but are declining Technology has improved in the last 4-5 years as has performance and reliability There wasn’t a standard used across vendors, but now we have the EPC Gen 2 global standard Jabil, Flex and Foxconn have participated in pilots and POCs with Cisco. Flex and Foxconn are working on their own internal funded projects. Our solution provider, Tagit Solutions, has developed similar systems for HP, Verizon, Huawei, Pace, Applied Materials Jabil, Flex and Foxconn engineers are joining Cisco TDEs in attending Cisco’s week-long RFID deep dive training. And there wasn’t a Cisco mandate, as Walmart and the Dept of Defense has made to drive lots of RFID implementation in industry. Cisco can go that route or collaborate with our partners to create a system that benefits both Cisco and the partners.
- We would do this because RFID has several use cases to benefit the partners and Cisco, across our supply chain. There are several other RFID initiatives underway as part of IoT and FoF, including RFID integration in our products
- We would deploy these readers in multiple locations at the DF sites and the SLCs.
- We’ve got some rough numbers on the number of stations, cost of equipment, and system integration costs. 13 CTO sites, 4 BTS sites, 10 SLCs
- What could we save? We process about 12 million cartons a year. Each carton is typically scanned a minimum of 3 times.
- Each manual scan requires labor at a cost. It also requires inventory tracking and audits. Just looking at labor costs for 4 of 8 SLCs that have reported back, we see an opportunity to address a more than $15 million dollar annual cost. This does not include Cisco resources for process deviation (lost cartons, mis-shipments) or cost of rebuilds (mfg. replacement orders).
- We would propose deploying at one DF and SLC combination, ensuring everything works, and then deploying to remaining DF sites and SLCs over the following 4 quarters, which would spread out CAPEX and OPEX costs OUT OF SCOPE R2A Anything post ship confirm out of QTC: RMA, Service Anything OM LSS R12 dependent (ex. Customer Arrival date) Not intended to replace functional transactional tools: e-Business suite, OTM, BMW, Kinaxis, etc. CCW
- One key risk is the inability to translate productivity gains into Cisco cost savings. We will work with the LMS partner managers to talk to our partners, review the mutual benefits of RFID to increase productivity, and agree on cost reductions tied to measureable productivity gains.
- What we are looking from you is your commitment for resources to refine the cost and benefit estimates, and to create an implementation plan so we can decide whether to fund the implementation at an initial DF and SLC combination.
- Consider how to gather more data for analysis and deploy to mobile app