RFID in the Supply Chain The New Technology. 1

Transcription

1 RFID in the Supply Chain The New Technology 1

2 Introduction Chester Lennard MD Electro-Com (Aust) Pty Ltd BEng (Mechanical), MBA Background in design, manufacturing and applications engineering 14 years RFID experience 15 year career with Texas Instruments 2

3 Agenda What is RFID? RFID Applications Supply Chain Mandates and Directives Real Supply Chain RFID Applications! EPC Global and Auto ID Center The Benefits of Adoption Summary 3

4 What is RFID??Radio Frequency IDentification: The identification of objects by means of electronic devices that communicate through radio waves The identifier is the transponder or tag Transponders are read by readers, interrogators or transceivers 4

5 What is RFID? 5

6 What is RFID? Not one but many different RFID technologies Operating frequency Modulation techniques Read-only, read/write Passive Active Semi-passive 6

7 What is RFID? Operating Frequencies: FREQUENCY COMMON NAME COST READRANGE KHz Low Freq (LF) Low to Medium Up to 1m MHz High Freq (HF) Low < 1m MHz Ultra High (UHF) Low to High 0,7 3m+ passive* 6m+ active 2.45 GHz Microwave Low to High 1m passive 10m active 5.8GHz Microwave High 5m+ active 7

8 Typical RFID Transponders 8

9 RFID is not new! RFID was not invented in 1999 (or 2004)! RFID first deployed in WWII friend or foe First commercial applications 1970s/1980s Mass deployment in 1990s What has changed?... Standards (early 90s), increased functionality, lower cost, better integration, customer mandates. 9

10 Is the Barcode Dead? RFID and Barcodes: are complimentary and often coexist RFID can use the barcode infrastructure incremental changes, not completely new processes

11 RFID Application Milestones 100 million+ keys for anti-theft 30 million+ in livestock tracking 20 million+ library books 10 s of millions of Access Control tags 7 million+ using Exxon/Mobil Speedpass 4 million+ food trays tracked by M&S 11

12 New Innovations All drivers recognize their cars Some cars recognize their drivers. Smart Access! 12

13 Wal-Mart June 2003 Market Drivers for Supply Chain Adoption Mandates and directives from the world s largest supply chains. RFID is on the move.. FDA February 2004 Target February 2004 DoD September 2003 Albertson s March 2004 TESCO November 2003 Carrefour March 2004 Destination: EPC and RFID Metro Group January

14 Retail/FMCG Directives Wal-Mart Jan 2005 top 100 suppliers EPC tags pallet and case level All suppliers by e/o 2006 What we see with RFID is an infrastructure breakthrough Mike Duke, President & CEO Wal-Mart Tesco Commencing Sept 2004, rollout over 2 years EPC tags for pallets, cases, trays etc Readers at all points in supply chain (from docks to shelves..) In reality item level tagging in retail is still some years away. 14

15 Pharmaceuticals US FDA recommending item level use of RFID by 2007 Objective is to keep the supply of drugs safe and secure RFID benefits include improved inventory management, decreased shrinkage and diversion, anti-counterfeiting and more efficient product recalls Estimated 7% of international drug supplies may be counterfeit! $2 billion in product returns annually (expired or overstocked), 1300 product recalls Estimated savings of $8 billion per annum 15

16 Defence & Aerospace DoD All suppliers must use RFID by Jan 2005 Active and passive tags Containers, pallets, cases, packaging and individual items Reduced inventories, better visibility, improved efficiencies, traceability Boeing / Airbus Joint initiative to promote adoption of RFID for aircraft parts Initial focus on cabin parts IATA standards call for 13.56MHz read/write ISO15693 tags Possible FAA certification late

17 The Gap - Apparel tracking Business: Fashion retailer of apparel Goal: Pilot in a closed-loop supply chain to monitor and measure business benefit of unit level visibility Tagging Level: Item Benefit: Proactive management of on-shelf availability enabled sales increase of over 10%, better demand planning 17

18 Goldwin Sportswear - Ski-wear tracking Business: Manufacturer of skiwear apparel Goal: Reduce overall costs and cycle time in manufacturing and distribution. Visibility Tagging Level: Item Benefit: Reduced overall cycle time by weeks, increased distribution productivity and significantly improved accuracy, found grey market merchandise 18

19 Figleaves.com - Lingerie Order Processing Business: European internet e-tailer of lingerie Goal: Increase accuracy and reduce costs of order pick, pack and ship process Tagging Level: Tote Benefit: Order accuracy increased to 99+% and increased productivity with multi-order batch picking 19

20 Sanacorp - Pick, Pack & Dispatch Business: Pharmaceutical Goal: Increase accuracy & reduce costs of order pick, pack and ship process Tagging Level: Tote Benefit: Order accuracy increased to 99+% and increased productivity with multi-order batch picking 20

21 Xerox - Dispatch Accuracy Business: Electronic equipment Goal: Increase shipment accuracy & control Tagging Level: Pallet Benefit: Order accuracy increased to 99+% and increased productivity with multi-order batch picking 21

22 Marks & Spencer - Fresh Food Tracking Business: Leading UK retailer of clothing, food and housewares Goal: Reduce costs of tracking 4+ million trays of chilled foods in the supply chain Tagging Level: Tray Benefit: 1/10th cost of bar code solution. 80% reduction in scan time. 22

23 Case Study: Marks & Spencer 23

24 Bloemenveiling - Flower Order Processing Business: Holland s largest flower auction, 100,000 flower trolleys, 37,000 transactions per day (before 11am!) Goal: Reduce order processing time and increase accuracy by automating the entire fulfillment process Tagging Level: Carton/Trolley Benefit: A significant reduction on order processing time and 99% order accuracy 24

25 Electronic Product Code EPC Global EPC Global is an initiative of EAN/UCC MIT Auto-ID Center disbanded in Nov 2003 to form Auto ID Labs and EPC Global EPC Global Network global standard framework for product information exchange EPC is more than just RFID. 25

26 Electronic Product Code EPC Global EPC Global Network to be comprised of 5 fundamental components;- Electronic Product Code (EPC) unique ID header.manufacturer.product type.serial# ID System, RFID tags and readers EPC Middleware readers -> business IT systems Object Name Server (ONS) matches EPC to information via www EPC Information Services enables info exchange with trading partners 26

27 EPC Global / Auto ID Center What are the main thrusts? Low cost RFID tags and readers Simple read-only, minimize silicon size ID only, all other info in remote database Justify investment through multiple applications and companies Standardized tags/readers Standardized data management/comms EPC network extension of internet Aim is item level tagging but this won t happen overnight Pallet and case 27

28 What are the benefits? Visibility! Visibility! Visibility! Traceability (quality, recalls etc) Reduced shrinkage and spoilage Increased efficiencies Lower inventories Less stock-outs (7-10% stockouts, estimated 4+% loss in sales) Improved decision making Whole of life traceability, material recycling 28

29 A word on Privacy Potential privacy issues have been recognized and are being addressed by the industry. Current legislation adequately protects the consumer RFID is not a sinister technology! RFID is short range (low cost passive tags <1m) EPC tags contain a serial number only No personal information is stored on the tag 29

30 But Please Remember! RFID is NOT the solution for every business problem RFID is NOT a cure for bad business practices RFID is NOT a white knight technology Some applications may never be economically feasible

31 RFID Is a proven process improvement enabler a highly capable technology when intelligently implemented a technology that will evolve and continue to improve 31

32 Technologies Challenge Business New technologies introduce challenge Bar codes caused change in business practices Desktop computers caused a re-deployment of IT technologies The invention of the IC by TI s Jack Kilby, Nobel prize winner, changed the electronics landscape RFID is no different This is what new technologies do 32

33 Many Challenges Ahead RFID a disruptive technology Challenges current business practices is there a better way? Presents an opportunity to re-think, re-deploy, and to re-engineer the enterprise As businesses are challenged, RFID technology will also be challenged Early demand will be high Performance expectations will increase More, cheaper, and faster 33

34 Finally RFID is simply the enabler, but.. Select your technology carefully! Select good partners Understand the requirements of your business Integration is the key to success Beware of promises of tomorrow s technology. (tomorrow never comes!) 34

35 Questions? Website