EPC & Improving Retail Supply Chains

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2 EPC & Improving Retail Supply Chains Avoiding Shrinkage Improving Visibility Ian Robertson GS1 Global Retail Industry Director

3 Introduction To GS1

4 GS1: A global system of standards GS1 designs and implements a global system of supply chain standards GS1 standards provide a framework that allows products, services, and information about them to move efficiently and securely for the benefit of businesses and the improvement of people s lives, everyday, everywhere

5 GS1: A global system of standards GS1 brings together companies representing all parts of the supply chain Manufacturers, distributors, retailers, hospitals, transporters, customs organisations, software developers, local and international regulatory authorities, and more work together under our leadership to create standards

6 Everyday, everywhere GS1 standards are used by Big multinational chains World famous brands Small corner shops Individual craftsmen

7 Used by millions of companies Countries with a GS1 Member Organisation Countries served on a direct basis from GS1 Global Office (Brussels) 108 Member Organisations. 150 countries served. 2,000 people helping us.

8 Better supply chain visibility GS1 EPCglobal standards put RFID technology to work for businesses and for people. With GS1 standards encoded onto RFID tags, businesspeople can know not only what an item is, but also where it is now and where it has been before. This means more effective and streamlined processes in a number of different sectors.

9 Electronic Article Surveillance Why is it Important in Retail? "To combat shrinkage"

10 Where Is That Shrinkage? Normalised average loss is about 1.5% 45% is Process Error and Interco Fraud Less than 1/3 rd is leaving via the front door! 10

11 Shrinkage Is Everywhere Shrinkage doesn't discriminate - it will occur wherever in the supply chain the opportunity is permitted to be. It's not just in stores! Which means that preventative measures need to be everywhere too 11

12 Is Very Important in Retail? "To combat shrinkage"

13 EAS Technology

14 Traditional EAS-Technology EAS Tagging Source tagging..stands for Electronic Article Surveillance..means to fix an electronic security label on a merchandise or its packaging..is the integration of an electronic anti-theft label in a product or its packaging during the manufacturing process 14

15 EAS Challenges The individual item isn't identified Today - three different labels! False alarms upset customers 15

16 RFID Based EAS Two Functions One Tag EAS Item Identifcation (SGTIN) 16

17 RFID Based EAS Integration of Item Identification and EAS = EPC Items secured using EAS Systems know exactly where a specific item is Items identified using EPC tags Only specific items rung at POS are "deactivated" Others will set off EAS alarm Visibility of specific items throughout supply chain can detect and prevent shrinkage from manufacture to shop floor 17 17

18 Security No security system is foolproof - including RFID There are ways of beating all EAS systems It's always a trade off between cost, customer inconvenience and losses EAS systems won t deter the professional thief but they do deter the casual thief 18 18

19 Consumer Choice But how do we.. Ensure tags can be deactivated appropriately to address the concerns of consumers? 19 19

20 Using Existing Standards Integrated Security Price or Brand Tags/Tickets Hang Tags or Adhesive Tags Will be removed by the customer after purchase No Tag Alteration is required 20

21 Altering EPC Tag Data Tag Alteration ( Deactivation ) is needed for Tags not removable by consumer EPCglobal Privacy Guidelines provide consumer choice guidance Consumer Electronics use cases will support total lifecycle management warranties, returns management, recycling, etc. Balancing business &security needs along with regulatory requirements 21 21

22 Check Out at Point Of Sale Apparel Stores designed to offer relaxing and comfortable environment

23 Image New shop = Old or new technology Most stores check out point of focus RFID enabled invisible blending with environment Innovative not just in clothes but everything else Check out process Quick Fascinating for customers Reduced tied up capital Can reduce stock level (20%) Central warehouse possible Share stock between stores EAS Same tag for theft system cost savings Why EPC/RFID Inventory Better control - administrative work simpler & efficient Quicker and more accurate whole day to five minutes update stock balance improves the management of deliveries 23 23

24 EPC/ RFID in Practice Items placed on counter, automatically scanned by an RFID reader under counter Assistant press button on the cash register screen - all items rung up Wow - how did you do that? Checkout system - standard modified to handle SGTIN Handheld computers used for inventory - make a circuit of the store using a handheld computer with an RFID reader 24 24

25 Magic Mirrors & Automated Upselling New business processes made viable by EPC & RFID technology

26 Magic Mirror What if you walked towards a mirror wearing something you might buy.. And as you approached. On the mirror appeared details of what you were trying on and what might go with it?

27 Smart Dressing Room A screen shows details of what you are holding And what other colours are available where What you take in and out is tracked automatically

28 Getting that elusive visibility All the way through the supply chain

29 EAS and EPCIS EPC tag triggers alarm if an item leaves the store but wasn t rung at Point of Sale But. the real value comes from Visibility of inventory Did the handbags shipment go from receiving, to the back room, and finally to the store shelf? If 2 dresses went into the fitting room, did they come out of the fitting room?? The key is knowing what was where when & why!! 29 29

30 Global Visibility of Physical Assets Physical Asset -- any object or thing in the physical world whose whereabouts can be tracked. Examples: trade items (products), reusable assets (such as totes, shipping containers, etc), fixed assets (including computers, machinery, etc), documents, aggregations (such as cases wrapped together on a pallet, etc), Visibility -- knowing exactly where a given asset is at any point in time, and why. (What, when, where, why) May also include physical condition of the asset, physical relationship to other assets, other information Global Visibility -- not just having visibility within a company s own four walls, but everywhere in the supply chain where a company has a legitimate interest and right to know

31 Visibility into the Physical World Business decisions are made here, in the company headquarters data center but there s an awful lot of important action here, in the real world. Factory Distribution Center Retail Store Visibility into the physical world improves business processes

32 The Visibility Landscape Visibility-Driven Business Processes Track Pedigree Inventory etc Trace Product Authentication Returnables Business processes that rely upon, or are enhanced by, knowing where things are Visibility Technology Visibility Data Physical Events Business Transactions Master Data Standards Data Interfaces Identification Technology that provides to business processes knowledge of where things are

33 GS1 System of Standards

34 GS1 System of Standards

35 Visibility: GS1 Identification Trade Item (GTIN) and Serial Number A serial number is a code, numeric or alphanumeric, assigned to an item for its lifetime. An unique individual instance of an item may be identified with the combined GTIN and Serial Number (sgtin). Utilizes the GS1-128 Symbology or the EPC RFID. SGTIN (GTIN + serial)

36 GS1 System of Standards

37 EPCglobal Architecture Standards Architecture Framework Certificate Profile Pedigree Tag Data (TDS) Tag Data Translation (TDT)

38 Identity Capture By Other Methods E.g. GS1 BarCodes EPCIS doesn't require RFID to capture and item identity - other carriers, such as Barcode can be used as well This is another extremely flexible design characteristic of the ECPIS concept

39 Data Capture Example Palletizer conveyor electric eye pallet Data Center Environment Edge Environment Reader Reader Enterprise Enterprise App App EPCIS Palletizer Palletizer Capture Capture App App ALE Filtering Filtering & Collection Collection Reader Protocol (LLRP) Reader Reader R R at time T, the association of the following case tags to the following pallet tag was created at palletizer #3, to fulfill order #1234 Service consumed by enterprise -- operational details hidden between the time the case crossed the two beams at location L, the tag X was read Service consumed by local business logic -- device details hidden dozens of individual tag read and sensor events from specific antenna/device Service consumed by hardware - technology hidden

40 But Why RFID? This pallet has at least one inner core. That means that there are cartons inside the pallet with no line of sight to their labels Verifying all cartons present means you must Drop the pallet Break it down Line up the label and scan the barcode on each carton Rebuild and re-label the pallet RFID can possibly read all labels as pallet passes the antennae without stopping at all 5th March EPCglobal Inc

41 GS1 System of Standards

42 Visibility: Data Sharing Transaction Data - (GS1 ecomm) Communicating a business process took place (these items have been shipped) Not necessarily connected with a physical observation One-way push of information Master Data (GDSN) Static Data that describes things that have an identifier For assets & asset classes For locations For parties Physical Event Data (EPCIS) Observations of what, when, where, why Evidence of an event in the physical world Often triggered by Auto-ID read: bar code or RFID Not necessarily connected with any business transaction, but can be related to one Two way conversation of what is occurring in the supply chain and why

43 GS1 EPCglobal Architecture Standards Architecture Framework Certificate Profile Pedigree Tag Data (TDS) Tag Data Translation (TDT)

44 EPCIS EPC-based Physical Visibility Data Within and Across Enterprises Capture of EPC data within one enterprise Use of EPC data by applications within the enterprise Exchange of EPC data between enterprises Data Ctr Data Ctr Data Ctr Factory Warehouse Distributor Retailer

45 EPC Information Services (EPCIS) The overall EPCglobal vision is to improve supply chain business processes through global visibility of physical objects (products and other assets) Visibility = where things are in time, and why; not just within your own four walls, but also within your trading partners walls Physical Event information is new data: Visibility is about where physical things are As opposed to EDI which is about the completion of business transactions EPCIS is the standard way to represent visibility data We re here to create new value via new data; not reinvent EDI 45

46 Object Events Core EPCIS Event Types Observation of collection of EPCs during Business Step at a Location & Time. This list of objects was observed entering DC #9 at 10:01AM, during Receiving. Aggregation Events Physical association of a set of EPCs with a parent EPC along with a Business Step at a Location & Time. This list of objects was just Palletized with this Pallet ID at Palletizer #27 at 12:32PM. Quantity Events Statements about an object Class (not individual objects), a quantity, a Location & Time. There were 200 bottles of Brand X cola in store #4123 backroom at 3:20PM. Transaction Events Records objects associated with a business transaction. Order number 123 was fulfilled with objects x, y and z.

47 Core Business Vocabulary Standard currently in development Ratification expected October 2010 Defines standard identifiers to describe: Business step what business activity was taking place when an event occurred Disposition what is the business condition of the objects following the event Defines standard syntax for: Business transaction identifiers Complements the EPC standard

48 Actual spelling in EPCIS data urn:epcglobal:cbv:bizstep:receiving Core Business Vocabulary Business Steps accepting receiving holding inspecting storing stocking repackaging packing picking loading shipping staging_outbound reserving encoding commissioning decommissioning destroying dispensing other Dispositions active inactive reserved encoded in_transit sellable_not_accessible sellable_accessible non_sellable non_sellable_expired non_sellable_recalled non_sellable_damaged non_sellable_no_pedigr ee_ match returned in_progress sold destroyed unknown

49 Key Data Sharing Considerations Each company keeps its own data, and chooses when and with whom to share. EPCIS is not a single combined Database in the sky EPCIS is a point-to-point standard You have to know where the other EPCIS servers are Challenging if three or more parties are involved. EPC Discovery Services will provide the answer.

50 From Data To Business Intelligence Having visibility of exactly where this inventory was and when it got there would have avoided all of this PANIC! This line is inventory on site Why almost no sales? Perhaps no items on shelf? No replenishment because there was no "demand" at POS Erratic replenishment reacting only to recent POS data Bleed off excess inventory by bringing safety stock level down gradually This line is sales

51 Dinet & LG - Processes Optimization Actual Process RF Manual RF Manual Manual Picking Picking Quality Control Serial Numbers Capture Load Verification by Carriers Truck load in GPS-Wisetrack GPS-Wisetrack Manual Transport Loads Despatch Quantity Control in Destiny Proposed Process RF Manual RF Manual Manual Picking Picking Quality Control Serial Numbers Capture Load Verification by Carriers Truck load in GPS-Wisetrack GPS-Wisetrack Manual Transport Load Dispatch Quantity Control in Destiny

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