© Copyright 2009 RF Controls, LLC. All rights reserved. Mapping the Future and Taking Advantage of...

© Copyright 2009 RF Controls, LLC. All rights reserved.

Mapping the Future and Taking Advantage of AIDC Technologies

April 27, 2009

Chris HookVP Business Development, RF Controls


• Technology Dynamics• The Solution Mix• Applications, Opportunities• Change Enabling Technologies• Seeking Business Value• Planning Your Future…

Agenda


December 2008 RFID Journal Magazine:

Monitor Technology


• From Reik Read at industry analysts RW Baird, referring to beam-steerable phased-array antenna systems:

“We view the ability to scan specific zones as a key attribute that can help locate missing items, provide real-time out of stock information, improve pick processes and can aid in inventory transfers, all in real-time.”

• RW Baird’s reports make interesting reading as they examine enablers and impediments to market adoption

Monitor Technology


Process Solution Ingredients

These are the essential ingredients in any applied solution


Process Solution Ingredients

We witness increasing reliance on technology over time

We witness increasing reliance on technology over time


Parts Location and TrackingManufacturing

Distribution and Warehousing

Retail Store or “Office”

Stock Room Inventory Visibility

Item Identification

Returnable Containers

Pick, Pack & Ship Inbound Receiving

Records Management

WIP Management – Location and Tracking

Personnel Security – Location and Tracking

Store Loss Prevention

Libraries and Video Rentals

Active RFID and Local Area

RTLS

Passive RFID

Promotions Monitoring

Battery Assisted Passive RFID

Read Range

Nature of the Business Environment

Electronic Proof of Delivery (EPoD)

Put Away Locations

Replenishment

Capital Assets (e.g. IBCs)

Capital Assets

Capital Assets

Unit Tag Cost

A Plethora of Applications


Monthly audit teamsAn external vendor audits retail

items once per month.

Tank surveyorsTanks are checked once or

twice a year by a tank surveyor.

Health inspection officialsStores are inspected quarterly by

health inspectors.

Beer and cigarette license officials Beer and cigarette license officials come by

the store once per year.

Hazardous materials officialsStores are inspected by hazardous materials officials once per year.

Central monitoring personnel

(security monitoring of the store). Managers may

periodically get a call from this monitoring center.

MaintenanceMaintenance comes to the store

at least weekly to repair equipment such as when a

customer drives off with a pump hose.

Help deskHelp desk personnel are contacted between 10 and 15 times per week.

PayrollPayroll personnel call once or

twice per week with payroll issues

AccountingManagers speak with accounting personnel

up to 10 times per week with accounting

issues.

HRManagers get a call from HR

regarding an employee once a week on average.

Customer serviceThe store manager helps with the cash register during peak times and answers

customer requests and complaints.

Excise tax officialsExcise tax officials come by periodically to inspect

cigarettes and ice production.

EmployeesEmployees continually seek guidance from the store manager on tasks and

issues. The manager must also guide employees through on the job training.

Merchandising request

The manager is asked to change signage and displays. Also, price

changes require items to be inventoried and

added to the daily paperwork. This can be a daily occurrence.

Fuel trucksManagers must review

and sign invoices.

Monthly auditsAn external vendor audits

retail items once per month

DSD receivingVendors representing bread,

beer, Frito-Lay, and soft drinks come by regularly throughout

the week to deliver their products.

DSD merchandising Vendors representing bread, beer,

Frito-Lay, cigarettes, and soft drinks come by regularly throughout the week

to order and check on their product.

Area/Zone managerManagers come by

several times a week to check on store operations

Loss preventionThe store manager

receives guidance from loss prevention regarding cash control, accidents,

etc. If an event occurs, an incident report must be

filed, and an investigation may take place.

Safety trainingEvery other month the

manager must participate in computer based safety training

courses.

HiringThe manager must contact references and gather data to fill out online paperwork for each new employee.

Daily reportingThe store manager spends an

hour at a minimum and sometimes up to four hours per day filling out

daily paperwork.

Weekly reportingEach week, the

manager must prepare weekly documentation and take it to the area

manager.

RDC orderingOne to three times per

week, the store manager must prepare an order for

the RDC.

RDC receivingManager must unlock the back door, count

product, and review and sign invoices. Biggest Time

Consumers

Large Time Consumers

Average Time Consumers

Back office 67%, customer facing 33%.

What could be changed using AIDC to shift this balance to increase efficiency, improve

customer service and increase sales?

Back office 67%, customer facing 33%.

What could be changed using AIDC to shift this balance to increase efficiency, improve

customer service and increase sales?


Financial Reports

Supply Chain

Workforce

Management

Store Promotions

Stocking and Inventory

Management

Customer Service

Back Office

Store Layout

Check-Out

Solving many process deficiencies will require the application of multiple “synchronized technologies”Solving many process deficiencies will require the application of multiple “synchronized technologies”


• There is good understanding of the potential for passive and battery assisted passive (BAP) UHF RFID systems to transform business processes

• Operational changes have been required to derive maximum value for all collaborating parties

• EPCglobal has been pivotal in driving the adoption of user-driven standards

• Interoperability and data sharing has been well proven

• There has been important, innovative strides in tag design and manufacturing, leading to lower cost, higher performance products

• But care is needed to ensure that maximum value can be derived from technology advances

UHF RFID Market Status


• Latest generation Higgs-3 (Alien) and Monza3 (Impinj) chips show significant operating range improvement

• But with increased range comes more extraneous or spurious reads, leading to ambiguity of tags’ locations and hence increased likelihood of process errors resulting from “dirty data”

• A systemic, collaborative approach is needed among technologists to achieve maximum value from innovation

• What might “-4” tags offer? Enhanced functionality, but potentially unforeseen challenges…

Tag Developments


Antennas which scan selectively and collaboratively, and can give accurate 3D locations of tags

BESPA: #1 of “Mark’s Top 10”


Characteristic Conventional Change-enabling

Energy focus Spread over a wide “cone” Place tag excitation energy only where it’s needed

Weak tag signals Prone to interference, worsening SNR with increasing range; Rx antenna sees many unwanted signals

High gain directional antenna coupled to high performance reader

Multi-pathing Severe problems with extraneous reads (e.g. at adjacent dock door portals)

Sophisticated multi-path ambiguity resolution algorithms eliminate spurious reads

Operating range Forward link limited to ≈ 5m (“-2” tags)

Operating range with “-2” tags > 20m

Practicality in use Antennas mounted close to where tagged objects move so damage is likely; sometimes there’s no room for a portal

Antennas mounted away from normal traffic and item movement

Tag sensitivity Increases the likelihood of extraneous reads and “dirty data”

Improving tag sensitivity enables new applications that will require BESPA antennas

BESPA Antennas: A New Wave


““The future is a wired shop floor The future is a wired shop floor complemented by sensing technology, a complemented by sensing technology, a platform for platform for ubiquitous machine-to-machine ubiquitous machine-to-machine computingcomputing in which human resources are in which human resources are dedicated to dedicated to customer servicecustomer service, allowing , allowing sensors, readers, middleware and enterprise sensors, readers, middleware and enterprise software to reconcile inventory in real software to reconcile inventory in real time.”time.”

Inventory Management

From “Chaos in the Retail Cosmos”, VDC

This is a great illustration of my argument concerning the dynamic people-process-technology mix that must be applied to problem solving

This is a great illustration of my argument concerning the dynamic people-process-technology mix that must be applied to problem solving


• A perspective on how to approach inventory management transformation using AIDC:• Experimental design• Staged deployments• Distributed real-time interrogation capability• Integrated planning• Executive sponsorship• Maximize the use of existing data capture

infrastructure• Adherence to global standards

Inventory Management

From “Chaos in the Retail Cosmos”, VDC


Image courtesy of Vue Technology

Light up the store or stock room to achieve automated, real-time inventory monitoring; tagged goods may be positioned arbitrarily

Inventory: Count and Locate


A Vision of an Intelligent Food Chain (IFC):A multi-sensory data capture and control network, A multi-sensory data capture and control network, incorporating Internet and wireless technologies, incorporating Internet and wireless technologies,

designed to improve operational efficiency, improve designed to improve operational efficiency, improve information velocity, enable remote resolution information velocity, enable remote resolution

without human intervention, and to achieve without human intervention, and to achieve benchmark product consistency and predictability of benchmark product consistency and predictability of

quality and freshness of produce, delivering fresh quality and freshness of produce, delivering fresh produce to customers “on their terms”. produce to customers “on their terms”.

Mark’s #2: Cold Chain Sensors


IFC ApplicationsStores

Packing Station Cold Storage DC/RipeningVesselsFarms Port/Yard

DischargePort

INTERNAL

EXTERNAL

Visibility and VelocityVisibility and Velocity

Improve vessel monitoring and controlImprove vessel monitoring and control

Improve truck/container monitoring and controlImprove truck/container monitoring and control

Improve reefer monitoring and controlImprove reefer monitoring and control

Improve yard managementImprove yard management Improve yard managementImprove yard management

Enhance container securityEnhance container security

Improve asset managementImprove asset management

Improve customer serviceImprove customer service

Improve control over in-transit ripeningImprove control over in-transit ripening

Enhance food safety and securityEnhance food safety and security

Improve customer supply chain compliance

Improve customer supply chain compliance

Optimize in-store promotions

Optimize in-store promotions


IFC - BenefitsDramatic improvement in sustainability of operationsEnhanced monitoring & control of temperature throughout entire

supply chainAbility to relate key agricultural quality data from the farm, by lot Enhanced control and monitoring of fruit respiration rates – end-to-endEnhanced ability to respond to customized/regional needs Improved fruit stability through continuous temperature and

respiration controlLinkage to shelf-life extension technologiesAutomated forward and backward traceability for food safety

compliance Improved transportation fleet management

For Optimal Management of Every LoadHigher consumer satisfaction by creating a new

standard of excellence for fresh produce management


RetailerInventory Accuracy

Load Validation Accuracy

Proof of Delivery

Automation

Inventory Accuracy and Product Aging Visibility Product Safety and Status Alerts

Shipping and Receiving Efficiency

Manufacturer Retailer DCsTransportation

ProvidersSuppliers Distribution Centers

On-Shelf Availability

Consumers

We observe multiple opportunities for process changes, leading to consistent best practices for shipping and receiving

We observe multiple opportunities for process changes, leading to consistent best practices for shipping and receiving

Business Process Improvement


Install

Scrap/Retire

ApproveRequest

Create Purchase

Order

Receive

Issue

Transfer

Transfer

Remove

Place In Service

Requisition

Staging Area

Field TechniciansOperational

Site

Test

Warehouse Receive from

Vendor

CreateRequisitions

(from various planning processes)

ApprovedRequisitions

ApprovedPurchase

Order

Return to Vendor

Warehouse

Transfer

In Transit

ReceiveSite Under Construction

Availableto Provision

Customer Order

OperationalSite

Transfer

Not an area for RFID applications

Business Process Improvement

High touch business operations with high value assets, that could benefit

from AIDC

High touch business operations with high value assets, that could benefit

from AIDC


• RFID is just one facet of “wireless and sensor” technologies that facilitate increasing sophistication in automated sense and respond systems, which are being applied to transform business operations today

• Bar codes are standardized and globally deployed, which is beneficial

• Myopic attention to “license plate”, passive RFID tag prices will persist, especially in retail businesses

Observations


• Enhanced tag functionality is already being utilized (e.g. temperature logging)

• What new opportunities – and challenges – will next generation “-4” UHF passive tags bring?

• New technologies must take account of deployed infrastructure as a springboard for adoption

• RFID and other sense and respond systems are enablers for profound business process change, through which maximum value will be realized

Observations


• Pay close attention to technology advances

• Maintain a prioritized, rolling list of process deficiencies that it would be beneficial to improve

• Quantify the potential value from change• Keep a “wish list” of prospective new

opportunities which could enhance revenue

• Define your success criteria; be both rational and reasonable

Recommendations


• Remember the process-people-technology mix to maximize your return on AIDC investments

• Strive for a common UI which abstracts the nature of the AIDC technologies; this will yield a device agnostic approach and aid phased migration over time

• Ensure cross-functional visibility and support• Think collaboratively rather than competitively

Recommendations


The Biggest Lesson Learned?

Collaborate Connectand

• Now, but not in the early days of bar codes…• Internet technologies• Layered standards• Interoperability• Numerous vendors• Practically ubiquitous, wireless, portable

computers


““There have been There have been many changesmany changes. We wanted to . We wanted to focus more on focus more on technologytechnology, and we , and we simplified our simplified our business processesbusiness processes. Decision making in our . Decision making in our supply chain, for example, got a lot supply chain, for example, got a lot fasterfaster. That . That has added has added agilityagility to our organization. And our to our organization. And our organization has become much organization has become much more openmore open.”.”

Jong-Yong Yun, CEO of Samsung Electronics, reported in Business 2.0 as he discussed the keys to Samsung’s success in becoming a consumer electronics powerhouse on par with Sony.

A Vision of Change


““The best way to predict the The best way to predict the future is to continue to invent it.”future is to continue to invent it.”

David Glass, Walmart

A Closing Thought…


Q & A

Chris HookVP Business DevelopmentRF Controls, LLC1141 S. 7th StreetSt. Louis, MO 63104-3623USA

Website: http://www.rfctrls.come-mail: [email protected] phone. +1 847 274-6943

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