RFID Helps Lavazza and Goglio Cofibox Track Shipments

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2 Powered by: RFID Helps Lavazza and Goglio Cofibox Track Shipments Antonio Rizzi, Prof., Ph.D. Full Professor, Industrial Logistics and Supply Chain Management Founder and Head, RFID Lab Department of Industrial Engineering ITALY Fabio Marzorati, Eng. Product development RFID projects Director Goglio Cofibox ITALY Alberto Mambrin, Dr. Logistics planning&control Lavazza Luigi ITALY

3 Agenda Introduction Objectives Project deployment Results

4 Companies Lavazza: Leader in coffee production 1,121.6 million Euro 2008 revenues imported bags of raw coffee 2,000 employees 80 Countries 4 production facilities in Italy 80 authorized dealers Goglio Machines and products for packaging Year of establishment: ,518 employees 6 production plants in Europe, 2 in USA, 1 in China 61% business turnover in Europe, 29% in USA

5 Companies A long lasting partnership Cofibox, a Company belonging from 1990 to Lavazza Group, is then bought by Goglio Group in 2002 The new Company is named Goglio Cofibox S.p.A, and it is the main packaging supplier of Lavazza The close relationship and the spirit of collaboration among the two Companies drive them through a continuous optimization of the Supply Chain processes

6 Objectives Increase visibility through the supply chain Orders and process status proof of deliveries processing of production orders visibility of stock levels and consumption ofrom traditional to integrated inventory management collaborative replenishment VMI obj: Stock reduction for both supplier (Goglio) and customer (Lavazza) and better service Increase traceability and quality data levels Real time traceability & quality data sharing Reels retrieval based on expiration dates Increase supply chain efficiency Flow time monitoring odetermine SC bottlenecks Process automation oinventory counts ofrom manual to automated processes (lavazza)

7 The Solution RFID tagging of Lavazza s packaging Pallet level (all products) Item level (Allegro s reels) Data sharing through a common business intelligence dashboard based on EPC network engines integrated with ERPs and Quality legacy systems

8 Project deployment The Supply Chain Manufacturer: Production Plant Cadorago (CO) Customer: Production Plant Settimo (TO) Cadorago (CO) Settimo (TO)

9 Project deployment Products PACKAGING REELS Printed multi layer packaging reels used in Lavazza production lines Allegro reels are tagged (cod. 8419) at item level with a SGTIN EPC code Production: 120 reels/day PALLETS Each pallet is tagged with a SSCC EPC code Production: 30 pallets/day inventory levels 150 pallets in Goglio 3,000 pallets in Lavazza

10 Project deployment As Is Supply Chain A yearly open order is agreed among the two partners, based on the APP of Lavazza, quantities are not specified Lavazza revise its forecasts monthly and updates its MPP for the next three months; packaging requirements are updated accordingly A three mounth order is issued to Goglio, with minimum due datets for each lot Goglio schedules its production plan accordingly Goglio production lead time is two weeks, it can be reduced to one week for particularly urgent productions Each Monday, Lavazza sends Goglio the delivery schedule for the next week Goglio tunes its production and processess the deliveries accordingly BOLs are transferred via daily

11 Project deployment To Be reengineering Settimo (TO) 1 Receiving Retrieving Returning From Production 2 Labelling Palletizing Putaway Shipping Cadorago (CO) Goglio Lavazza Process Location Process Location Labelling Goglio Receiving Lavazza Palletizing Goglio Retrieving Lavazza Putaway Shipping Goglio Goglio Returning from Production Lavazza

12 Project deployment To Be reengineering PRODUCTION LABELLING QUALITY CONTROL PALLETIZING PUTAWAY SHIPPING EPC Network RETURNING PRODUCTION RETRIEVING STORING RECEIVING RFID Process

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14 Project deployment EPC network: tracing EPC Pallet: urn:epc:tag:sscc-96: Event Time Id Actor Event Action Biz Step 02-OCT :13 Goglio object ADD palletizing 02-OCT :13 Goglio aggregation ADD palletizing 02-OCT :40 Goglio object OBSERVE storing 02-OCT :45 Goglio object OBSERVE shipping 02-OCT :45 Goglio transaction ADD shipping 02-OCT :13 Lavazza transaction DELETE receiving 02-OCT :13 Lavazza object OBSERVE receiving 13-OCT :45 Lavazza object OBSERVE retrieving 15-OCT :19 Lavazza object OBSERVE returning from production

15 Project deployment SW Architecture Id-Solutions modules - Printer module - GPIO handler - Process implementation (Capturing Applications' Core) - EPCIS Proxy - Business logic Accessing Application DB RFiD Middleware Adapter Capturing Application Business Intelligence Data Warehouse DB Internet Query Interface EPCIS Repository Product Flow Flow Time Management Track & Trace Inventory Pallet History Exception Mgmt Fosstrak: Database Tomcat Application Server HHD Reader Printer Business Processes Capture Interface EPCIS Id-Solutions MW Psion Workabout Pro G2 Impinj Speedway Toshiba BSX4

16 Project deployment Network infrastructure Architecture - ID Solutions Middleware: - Database - Adapters (Handhelds, Printers, Readers) - Id-Solutions modules: - Printer module - GPIO Handler - Process (Capturing Applications' Core) - EPCIS Proxy - Business Logic GOGLIO INTERNET LAVAZZA Architecture - ID Solutions Middleware: - Database - Adapters (Handhelds) - Id-Solutions modules: - Process (Capturing Applications' Core) - EPCIS Proxy - Business Logic - Receiving Buffer - EPCIS - Fosstrak Engine - Database - Capture and query interfaces EPCnetwork modules - ONS - DS Id-Solutions modules: - Data warehouse - Accessing Application (Dashboard) RFID Lab - EPCIS - Fosstrak Engine - Database - Capture and query interfaces

17 Results Lavazza Goglio Supply chain dashboard Full visibility through the supply chain receiving at Lavazza production from Goglio inventory levels (Lavazza and Goglio)

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19 Results Reading Accuracy - Goglio Before fine tuning of the system Putaway gate performace was good Shipping gate performance was poor Shipping Gate Storing Gate Fine tuning The usage of sensors (photoelectric cells) for triggering the reader is not reliable missed reads Continuous reading Linear polarized antennas After fine tuning Shipping performance is good 79.7% 98.8% Shipping Gate Lessons Learned Issues: Tag placement Antenna type Triggers Not an issue: Forklift speed 100.0% Best Week 99.0% Worst Week

20 Results Inventory Accuracy - Goglio Inventory levels are manually updated basing on production and shipments. Are they accurate? The information needs to be checked Manual check is time consuming and delivers low accuracy Reference Code Total Pallets Pallets Found (5 operators) Avg. Accuracy Time [s] (5 operators) Avg. Time [min] , 8, 8, 8, 7 89% 341, 309, 341, 340, , 3, 3, 3, 3 100% 453, 571, 440, 440, , 0, 0, 0, 0 100% 225, 270, 199, 190, , 0, 0, 0, 0 100% 255, 199, 198, 145,

21 Results Inventory Accuracy - Goglio RFID Dashboard gathers data from in-field RFID devices The information is real-time updated and matches physical inventory Time to get inventory Inventory match Reference Code Total Pallets WMS [s] RFID dashb. [s] Saving with RFID WMS RFID dashb % 77,77% 100% % 100% 100% % 100% 100% % 100% 100%

22 Results Inventory Accuracy - Goglio RFID Dashboard gathers data from in-field RFID devices Manual check is optional and very time efficient by means of a Handheld RFID device Test Reference Time to get inventory Total Pallets Manual [s] RFID HH [s] Saving with RFID Inventory match Manual RFID dashb. # % 100% 100% # % 100% 100% # % 100% 80%(*) * Non optimal tag positioning otherwise 100% matching is achieved

23 week 1 week 2 week 3 week 4 week 5 week 6 week 7 week 8 week 9 week 10 week 11 week 12 week 13 week 14 week 15 week 16 week 17 week 18 week 19 week 20 week 21 week 22 week 23 N of pallets Results Inventory optimization - Lavazza Actual inventory SSL: 40 pallet, 2 weeks of production Average: 83 pallets, 4 weeks Max: 143, 7 weeks Reference code 6378 D= 20 pallets/week RFID enabled visibility Potential improvements One shipment a week, 20 pallets SSL: 40 pallet, 2 weeks of production Average: 50 pallets (-40%), 2,5 weeks Max: 60 (-58%), 3 weeks 20 0

24 N of pallets N of pallets N of pallets N of pallets Results 160 Reference code 6378: from 4 weeks to 2.5 weeks 30 Reference code 7528: from 3.5 weeks to 2.5 weeks Reference code 7529: from 7.5 weeks to 7 weeks 12 Reference code 7531: from 6.5 weeks to 5 weeks Lessons learned Flows and inventory visibility enables Continuous Replenishment policy or Just In Time Delivery Inventory reduction Reduction of space required 0

25 Powered by: RFID Helps Lavazza and Goglio Cofibox Track Shipments Antonio Rizzi, Prof., Ph.D. Full Professor, Industrial Logistics and Supply Chain Management Founder and Head, RFID Lab Global RF Lab Alliance Network, President Department of Industrial Engineering, ITALY T E antonio.rizzi@unipr.it W

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