How to save $2,000,000 per Year

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1 The Use of Handheld RFID Readers for Near Real Time Asset Visibility in Metropolitan Networks - A Retrofit Approach Grant Pugh May 2006 Copyright 2005 Blackbay (NZ) Ltd 1 How to save $2,000,000 per Year 2

2 Real Business Issues Australia Post have approximately 60,000 ULDs each costing AU$800 (AU$48M), Annual cost of AU$2.4M to replace about 3,000 lost or damaged units in the system, many are damaged by clients but lack of traceability means AP end up paying for them. (Australia Post) Posti (Finland) has stock of 200,000 rolling cages (totalling about US$25M asset value). In ,000 went missing, about US$1.6M per year replacement costs (Postal Technology International) 80% of financial executives are dissatisfied with their company s ability to track asset utilisation (CFO magazine) Post Danmark will tag 25,000 roll cages to improve security of mail during transport and improve workflow. (rfid journal) 3 A Business Problem The need is to manage valuable reusable components in the supply chain where there are requirements for knowledge of custody and condition Transport units are delivered to customer sites with little or no visibility thereafter to the enterprise systems. Inbound and Outbound units need to be better registered, preferably automatically. There are costs involved in loss and breakages to Transport Units, traceability is needed to determine warranty issues. Mobile assets need mobile solutions, it is not always possible to completely set up infrastructure at choke points to monitor. 4

3 About Blackbay Blackbay is the largest mobile systems development company in South-East Asia 15,000+ people in the field worldwide using our Blackbay applications 120 Million+ jobs tracked per annum (and signatures) 150+ Blackbay systems developed and delivered worldwide 35+ development staff in New Zealand (55 all up In Australia, new Zealand, Singapore and UK) Experts in enterprise system integration RFID Products R&D group RFID Design Consultancy Service and System Integration Design Services Group for bespoke product design 5 Some Blackbay Customers Client Dyson (UK) Chubb (ANZ) Deadline Express Tyco Mainfreight Courier Post Toll Parcel Force (UK) LIC Australia Post Excell Corp Application Type Service Service Freight/Courier Service Freight Logistics Freight/Courier Freight Handling Freight Logistics Livestock Management Freight Logistics Service No. Users

4 Asset Visibility Asset visibility is important in (lean) systems when delays in finding items leads to inefficiencies and shortages Asset visibility for Inventory Control Tracking High Value reusable equipment outside organisational boundaries (ULDs, Roll Cages etc.) Applications in transport logistics for proof of delivery, proof of collection. Asset auditing for service level compliance High Compliance such as fire prevention equipment inspection Asset management for planned and unplanned maintenance Value added services for appliance repairs High value equipment in mission critical operations (power generation) 7 Handheld RFID Handheld RFID offers flexibility in an open system to track assets as they move Often thought of as only useful for exception handling but this view is limiting. Others include Item pick, Pallet association, Many organisations operate in open systems where the delivery point has no infrastructure to support RFID A handheld device is desirable for proof of delivery in open systems (shipping / receiving) Many enterprises are holding out on installing fixed portal infrastructure or their premises layout are not optimised. Unlike portals which feature high read throughput over a wide area, handheld readers need the ability to select tagged items, the ability to locate the desired item rather than capture all the tags is desirable. In a door to door scenario handheld readers offer most flexibility for capturing near real time asset information. Write to tag enables distributed information and permits and audit trail. 8

5 The Mobile Enterprise is Here Investment in Enterprise Mobility Hardware predisposes leverage of device capability to the maximum We ve now been deploying Mobile solutions for 9 years, 42% of companies have some mobile component. Using NZ as an indicator: 51% of over 500 organisations with an projected ICT spend level of $462M are investing in Mobile devices and solutions in (istart) By contrast in NZ 11% are planning RFID investment but NZ is lagging behind other countries in the OECD. 9 How to get the most out of Handhelds When buying new, look for best of breed handhelds that are modular, extensible and integrate as many desired features as possible. When you already have significant investment in handhelds deployed, look to leverage communications interfaces expand capability (add GPS, RFID and other data capture) RETROFIT. In the field remember a solution must: WORK ALL DAY BE LIGHTWEIGHT KEEP THE HANDS FREE 10

6 The Retrofit Approach High levels of integration tend to lag behind the business need. Add-ons provide only incremental cost increase The advent of PAN and a wearable computing paradigm enables additional features and services in lieu of an integrated hardware solution New technologies can be tested on existing infrastructure without and still leave contingency processes in place 11 RFID RFID offers technical advantages over Bar Codes RFID does have advantages : Write information to Tag (timestamp, location etc) Strict line of sight not required (lower cost of installation) Tags can be encapsulated in rugged forms Able to read in bright sunlight and dirty environments Can be combined with other sensors (e.g. temperature measurement) But RFID is not a Silver Bullet: RF signal can be attenuated or distorted by disturbing influences such as metalwork or water Without a 100% read rate you need contingency processes Read distance requirements impact on reader choice and frequency of use. Initialisation processes required to eliminate DOA tags Different tag types (active, passive, SAL) offer different performance but tag price can become significant. 12

7 Handheld Use Case Scenario Stacker ULDs Inbound Fixed Readers Tag Admin Inbound/Outbound Inspection Warehouse Portal readers LAN / WLAN Management Services Real Time Monitoring outbound WWAN TLS Management System RFID Edge services, Tag movement data Proof of Delivery, Custody Maintenance Inspection, Proof of Custody, Inventory Auditing 13 Application Architecture Data Capture Very Rugged Semi Rugged CDMA GPRS WiFi Connect Customers EAI Staff Management Tools Web application view Mediator Deploy External Database Internal Database LAN/WAN Config. Utility ERP 14

8 Asset tag Application Overview Staff Export RFID Tag Read CDMA Web application view Very Rugged Bluetooth Connection Semi Rugged GPRS WiFi Connect Mediator Deploy Bluetooth GPS LAN/WAN Config. Utility ID and Location Data capture Thick Or Thin Client Middleware 15 Asset Visibility using Web based mapping Presentation 16

9 Near Real Time Asset Tracking with mapping on mobile terminal Proof of Delivery Scan and Sync In-Vehicle PDA In-Vehicle GPS 17 Benefits Reduce Costs, Improve Efficiencies, Improve Customer Satisfaction Reduced Shrinkage Auditing of misappropriated assets to improve reconciliation of asset location and usage, automate procedures for chain of custody. Increased visibility of Asset to improve availability and utilisation Improved visibility around maintenance and warranty Improved return rate of asset. Long term increased transparency at item level leveraging off RFID experiences at ULD level, better process control, removal of manual work, shipment tracking 18

10 Costs and ROI Launch, Learn, Evaluate, Develop Business Case, Develop, Deploy 19 Summary If You are using Mobility to a competitive advantage then RFID can be introduced to good effect and savings. 15,000 units in the field, 90% are Symbol devices Handheld RFID becoming popular to offset costs Retrofit solutions advisable in the short term High value returnable (mobile) assets good candidates for use of RFID to reduce costs. UHF RFID opening up new opportunities to justify business case Technology convergence with WWAN and WLAN means near real time visibility feasible. 20

11 Contact Details If you would like to know more then please contact: Grant Pugh Technical Director Blackbay (NZ) Ltd Unit 8, Amuri Park 404 Barbadoes Street PO Box Christchurch, New Zealand tel: fax: mob: grant.pugh@blackbay.com web:

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