EPC-Enabled RFID Beyond the Retail Supply Chain. Grant W. Hunter / Sue Hutchinson GS1 US / EPCglobal US April 15, 2010

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2 EPC-Enabled RFID Beyond the Retail Supply Chain Grant W. Hunter / Sue Hutchinson GS1 US / EPCglobal US April 15, 2010

3 EPC-Enabled RFID Beyond the Retail Supply Chain Electronic Product Code Beginnings GS1 and EPCglobal Standards Other Industry Examples Internal Applications

4 EPCglobal Timeline Dec 04 Sept 03 Architecture Framework Certification Begins Public Policy Guidelines Nov 04 UHF Gen 2 Standard Sep 05 Oct 03 Jul

5 EPCglobal Timeline Drug Pedigree Standard EPCIS Standard Transport & Logistics Pilots Begin Apr 07 Jan 07 Feb

6 EPCglobal Timeline Consumer Electronics IAG Aerospace & Defense IAG Aug 07 Oct 09 2,100 Subscriber Companies

7 EPC-Enabled RFID Beyond the Retail Supply Chain Electronic Product Code Beginnings GS1 and EPCglobal Standards Other Industry Examples Internal Applications

8 EPCglobal Standards Development EPCglobal Standards End-User Requirements Technology Independent Industry Neutral Open Simple

9 EPCglobal Technical Standards

10 GS1 Visibility Framework 10

11 Using Standards from Day One Fosters supply chain interoperability and visibility of operations Easier transfer of knowledge among and across users Greater chance of broad adoption Transitioning from proprietary to open adds time and cost Assets can travel outside the four walls Your business today will not be your business tomorrow More products, more plants, more locations Different business partners Mergers & acquisitions

12 EPC-Enabled RFID Beyond the Retail Supply Chain Electronic Product Code Beginnings GS1 and EPCglobal Standards Other Industry Examples Internal Applications

13 Healthcare 13

14 Challenges in the Healthcare supply chain Medication errors result in additional treatments, disabilities and even loss of life Counterfeiting is an increasing global threat Traceability from manufacturer to patient is unworkable Product recalls can be difficult to manage, in particular for healthcare providers A lot of manual interventions in the healthcare supply chain decrease its efficiency and accuracy

15 Lack of global standards

16 GS1 Healthcare US Building Patient Safety 2010 Sunrise 2012 Sunrise 16

17 2015 Readiness Program Simulation Process

18 Transportation and Logistics

19 Transport and Logistics Industry Key Challenges Supply Chain Efficiency Inventory Visibility / Out of Stocks Error Reduction Theft / Diversion Factor utilization and productivity EPC / RFID Enables Competitive Advantage Asset Visibility / Prevention of Loss / Theft Logistics Units (containers, pallets, ) Tools and Equipment Property / Yard Management Asset Management Safe and Secure Initiatives Anti-Counterfeit Health & Safety Homeland Security (US) Food Supply Compliance

20 Transport and Logistics Pilot Program Phase 3 Tokyo Amsterdam Electronic Goods Ocean February 2009 Phase 1 Phase 2 Hong Kong Tokyo Footwear Ocean February 2007 Fully automated reading Handheld readers of tags (fixed readers) Connect EPCIS s Use of electronic seals in several countries on container (proof of closure) Parties involved are AEO (Authorized Economic Operator) Involvement of Customs (use of UCR; draft of green lane ) Shanghai LA Electronic Goods Agricultural Machinery Air, Ocean, Overland February 2008 Handheld readers Hibernating active tags in plane Connect EPCIS s in several countries between different industries

21 TLS3 Pilot Program unique achievements 1. Improved Supply Chain Management 2. Enhanced the accuracy of Supply Chain Management and Logistics Planning 3. Identified bottle necks of current supply chain flow 4. Demonstrated an effective way of integrating physical cargo movement information with business transaction information such as D/O, invoice # and B/L # with the aids of EPC/RFID solution to increase business shipment visibility

22 Intelligent Distribution and Transport

23 Main Objective: Tracking and Traceability Pilot Dinet LG To achieve the traceability and tracking of the product from its point of origin to the end customer. Streamline processes and achieve savings. Specific Objectives: Test the integration of WMS, RFID / EPC and Wisetrack / GPS information tools in a local process. Identify the indirect and potential benefits. 23

24 Elements and tools of the solution Business Unit Supply Chain Traceability and Tracking Technological Support 24

25 Current Track and Trace 1. Production Batch. 2. Due date. 3. Serial numbers. 4. Standard Bar Code 1. Automatic Data Capture with RF. 2. Control with WMS (locations, turnover, series, picking). 3. Load distribution with TMS. 1. Unit loading. 2. Unit tracking with GPS / Wisetrack. 3. Document tracking and Delivery settlement with Wisetrack Product Traceability and Control Control Goal: Tracking, Tracing and Control until reaching the final destination 25

26 Qualitative Benefits Picking Quality Control Serial Number Capture Load Verification by Carriers Transport Quantity Control in Destiny -Increased quality on dispatch goods preparation -Eliminate Serial Number mistakes -Visibility and traceability of items (by serial number)by each Shipping Notice on route. -Loads goods confirmation on line -Distribution and pay documents reduce time cycles -Control of transportation units -Document visibility on real time, in each deliver point -Unload confirmation on line -Proof of Delivery online between systems 26

27 Quantitative Benefits Picking Quality Control Serial Number Capture Load Verification by Carriers Transport Quantity Control in Destiny -Return Transport elimination due to customers rejects for serial number mistakes -Credit notes elimination due to customers rejects for serial number mistakes -Manipulation time elimination due to returns logistics for serial number mistakes. -Lost sales elimination due to customers rejects for serial number mistakes. -Warehouse space reduction on return logistics due to customers rejects for serial number mistakes. -Reduce time on serial number capture -Warehouse space elimination for dispatch serial number capture -Counting redude time and merchandising review -Better transportation units disponibility on field -Verification reduce times on destiny load 27

28 Quantitative Benefits in LG terms QUANTITATIVE BENEFITS FOR LG ELECTRONICS Case Fill Rate Lead Time of Sale Order -Recovering of the 30% of sales as a result of avoiding the returns. -Savings up to 30% in administrative expenses for issuings of credit notes. -Increase of merchandise preparation capacity in an additional 25% for the sale in the same times and costs. -The client will have its merchandise in less time since the order is approved. Reduction of cycle in a 20% aproximately. On Time Delivery -Reduction of deliveries out of time up to 20%. 28

29 Traceability and Tracking Pilot Dinet LG An EPC Success Story WENT IN RFID technology UHF Gen2 GS1 Standards SSCC Process Analysis By GS1 Peru & Dinet Costing Analysis By GS1 Peru & Dinet Investment: $ 22,500 Initial (on RFID equipment) CAME OUT Savings: Approx. $ 9,800 per month. Recovery Period: TIR: 3 months. + 43%. Order Cycle Time - 20%. Capacity Throughput + 25%

30 EPC-Enabled RFID Beyond the Retail Supply Chain Electronic Product Code Beginnings GS1 and EPCglobal Standards Other Industry Examples Internal Applications

31 Why EPC-Enabled RFID for Assets? Assets are everywhere & need to be managed! Logistical Assets (e.g., pallets, trailers, totes, etc.) Process manufacturing assets (e.g., raw materials drums, barrels, containers, etc.) Information Technology (IT) assets (e.g., computers, peripherals, networking equipment, etc.) Other assets (e.g., office equipment, cell phones, facility equipment, cars, etc.) And your CFO needs to establish value for your assets

32 Visibility into the Physical World of Assets Business decisions are made at the company headquarters data center but there s an awful lot of important action here EPC and RFID technology can bring awareness of the physical world Factory Warehouse Distribution Center

33 Case Study International Paper (IP) World s largest paper and forest products company Opportunity: Prevent slumping in paper rolls. Piloted System: Tag inserted into core of paper roll 72. Warehouse movements tracked by forklift-mounted readers Delivery location transmitted to drivers terminal Driver notified if delivered to wrong location Results: Fully automated RFID warehouse tracking system Target 99.7% inventory accuracy Works equally as well with pallets

34 Case Study Wells Fargo Bank and Bank of America Opportunity: Improve asset management for tens of thousands of IT assets in 30+ data centers across the US. Deployed System: EPCglobal UHF Gen2 tags affixed to all IT assets UHF readers installed at door portals Handheld and rolling cart readers deployed in data centers IT asset data added to internal asset tracking system Results: Sarbanes-Oxley inventory counts that took days now take minutes Over 99% asset identification accuracy Foundation for Financial Services Technology Consortium RFID IT Asset Source Tagging Guideline published in 2008

35 Case Study Kimberley Clark Opportunity: Deployed System: Yard Management - Improve management and utilization of truck trailers: 900 plus trailers in multiple gravel yards 8 departments requesting trailer moves Daily Yard Check takes 4 hours Current process requires rehandling of trailers to manage status & location Significant hours spent looking for trailers Lack of tools for managing trailer pools & 3rd party services RFID tags affixed to all truck cabs and trailers RFID readers installed at entry/exit of KCC truck yards & tracker cab Truck/trailer asset data added to internal asset tracking system, with reporting portal for third party trucking partners Results: Focus Area Reduction in costs Trailer Detention 19% Yard Checks and Operational Efficiency 6% 3 rd Party Services 31% Rental Trailer Reductions 23%

36 Case Study Kimberley Clark Opportunity: Deployed System: Yard Management - Improve management and utilization of truck trailers: 900 plus trailers in multiple gravel yards 8 departments requesting trailer moves Daily Yard Check takes 4 hours Current process requires rehandling of trailers to manage status & location Significant hours spent looking for trailers Lack of tools for managing trailer pools & 3rd party services RFID tags affixed to all truck cabs and trailers RFID readers installed at entry/exit of KCC truck yards & tracker cab Truck/trailer asset data added to internal asset tracking system, with reporting portal for third party trucking partners Results: Focus Area Reduction in costs Trailer Detention 19% Yard Checks and Operational Efficiency 6% 3 rd Party Services 31% Rental Trailer Reductions 23%

37 Case Study Dow Corning Opportunity: Deployed System: Improve tracking of work-in-process inventories for temperature sensitive continuous process manufacturing materials EPCglobal UHF Gen2 tags affixed to drums, WIP containers, and cases UHF readers installed at locations along the manufacturing line Track and trace application that creates parent/child association with drums, wip containers, and final packaging. Integration of read data into corporate-wide ERP system with real-time dwell time reporting dashboard Results: Better chemical integrity with less wasted product Lowered out of cooler dwell times Improved process yield with less raw materials

38 Key Points EPC is far more than Retail Global Standards enable interoperability across industry Organizations are realizing positive returns

39 Questions?

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