Implementing RFID at Hewlett Packard

Truth in Technology 2005

The HP Experience

Guillaume OgetSolution ManagerHP RFID program

October 27th 2005

Industry’s Largest Supply Chain

• #1 in material spend – $40B– Memory – #1 – Microprocessors (Intel &

AMD) – #1 – Windows software

(Microsoft) – #1 – Hard disk drives – #1– Laser engines – #1 – Optical disk drives – #1 – Chipsets (Intel) – #1 – LCD panels and many

more – #1 • #1 in contract manufacturing/

ODM – spend ($5B)• #1 in electronics industry

logistics procurement – $1.7B• 1M service support parts per

month

Every day HP delivers:• 1.3 Million Inkjet cartridges

• 110,000 Printers • 75,000 Personal systems• 3,500 Servers

• 1B customers - 178 countries

• 21,000 patents• 675 new products in FY03

• 142,000 employees

A Brief History of RFID At HP

• 2002 June – Printing group investigates possible new business using

conductive inks August - Supply Chain / Logistics Councils authorize RFID pilot September - first proof of concept kicked off at Memphis printer facility October –Phase I of Container Security Initiative with US Homeland

Security

• 2003 January - Chester, VA ( inkjet pens ) chosen as the next RFID pilot site April - Memphis POC shows positive ROI, RFID Core Team launched June - Wal*Mart issues first retailer request for tagged goods July - HP launches NA Retail RFID program worldwide September – engaged with Best Buy, HP investigates joining Auto-ID

Center October - HP launches Warrior program for US DOD requirements

A Brief History of RFID At HP

• 2004 February - HP joins EPC Global, Dick Lampman elected to Board of

Governors April - Memphis in production, HP shipping tagged goods to Wal*Mart May - HP negotiating with China on RFID frequencies on EPC Global’s behalf Assisted Singapore in testing to determine RFID frequencies November - 21 RFID capable sites in Latin America, Mexico, USA and Asia December - TUSC program launched

• 2005 January - HP granted first temporary licenses to operate RFID UHF in China January - all 26 tier 1 sites supplying Wal*Mart now live March - first shipments to Target April - now shipping 60+ SKU’s to Wal*Mart April – working with Malaysia government to help determine frequencies

RFID Business Objectives

HP’s business objectives• create an agile data

infrastructure accessible at any time

• Get accurate distribution & sales information related to products

• Product life cycle information from manufacture to retail channels

• enable low touch processes & improvements on Supply Chain cost structures

• increase material & finished goods velocity thru Supply Chain

• quality tracking at key processes in manufacturing

• reliable information capability for Reverse Distribution processes

• faster shipping and receiving processes

HP’s RFID Program

INNOVATION

UserImplement RFID into HP’s own operations

Standards LeaderInfluence development & ratification of international standards

Service Provider

Consultancies & integration services to customers who wish to implement RFID

Market Provider

Provide HP’s customers with goods that are RFID enabled

To be a credible integrator we must be able to show that we have done it to ourselves

To be a successful user we must ensure standards are practical and beneficial

To be a successful market provider we must be part of driving standards into the market

To successfully influence standards we must be a visible and active part of the standards effort

RFID Strategies In Cohesion

HP’s RFID Program

RFID CouncilSets Overall Company Strategy

IPSG TSG CSG

RFID Core Team 28 members from across

HP

ProgramManagers

ProgramTeams

Umbrella Program Structure

RFID Program DirectorManages overall “Umbrella” ProgramProposes overall company strategy

Drives internal implementationsMain POC To External BodiesFacilitate and drive cross

pollination across every part of the company

We hate learning things twice !Finance, Systems, Logistics, HR, PR, Procurement

Program Management, Legal & Technical Support

I just know that RFID justification is in here somewhere…..

The Supply Chain Business Case• Retaining your Customer

– Tagging goods that your Customer asks you to tag

• Improving Supply Chain Efficiency– Do things at less cost by reducing labor involved– Increase Supply Chain velocity by taking less time to do the same

work– Do things better by increasing first pass accuracy– Lessen Supply Chain risk by increased in transit accountability

• Improved Data Collection– RFID reduces effort & cost to identify item– Which can make identification viable where it wasn’t before– And this can improve overall Supply Chain visibility– Which should reduce second guessing of events

HP Confidential / HP’s RFID Program

1 EPC tag per carton – 100% read on conveyor1 EPC tag per pallet – 100% read at Inbound dockConveyor speed of up to 600 feet per minute3 Texas Distribution CentersCommenced on schedule in January 2005Today more than 60 tagged products are shipped to Wal*Mart from 26 sites globally and HP is piloting with many of the world’s largest retailers


Retail IPG RFID Plan

In transit

Regional

Distribution

Walmart

Walmart, Sam’s Club

and Neighborhood Market Stores

Product Completion

Center

Base Manufacturing

Malaysia Flextronics

Shanghai Calcomp

Shenzhen Mentor Media

BangkokVenture

Hong KongCanon

TokyoCanon

Canon China

AiO & Personal Printers

AiO & Personal Printers

Scanners&

Cameras

AIO

Toner

Toner/PersonalLaserjet

Personal LJ

Memphis Flex

Memphis Menlo

Virginia Sonoco

Walmart DC3 De-Soto,

Texas

Walmart DC1 Sanger,Texas

Walmart DC2Cleburn,

Texas

FGI Direct

FGI Direct

FGI Direct

IDS Air

Various

GuadalajaraJabill

InkJet Supplies

GuadalajaraFlex

Tag Site

Supply Site

Delivery Site

page 13Apr 8, 2023 HP Confidential / HP’s RFID Program

HP RFID Geographic Scope

RFID impacts businesses, operations and Customers in all Regions. Therefore program scope is global and pan HP in nature

Commercial sitesRetail sites

28 sites now RFID capable

10 more in progress


First site to go live in volume in August 2004

We are also working with our large Retailers to synchronize pilot efforts

Tagging pallets & cases with EPC Class 1 915Mhz tags

Began shipping tagged cases and pallets with full system integration to WalMart April 2004


Refining Existing Processes – Integrating with RFID

He is scanning every printer

engine to capture the

serial number

And he is applying a

barcode label by hand


Refining Existing Processes – Integrating with RFID

RFID capable printer

Integrated RFID tag

Integrated RFID tag


Refining Existing Processes – Prior to RFID

•Forklift selects full pallet for shipment, picks the pallet from storage, then takes it to a shipping dock

•Tells warehouse staff that pallet is ready

•Warehouse staff then scan pallet contents

•WMS system confirms pallet to order and prints shipping label

•Operator retrieves address labels and apply to pallets

•They then call forklift to load truck

•Creates “idle” time between processes


Refining Existing Processes – With RFID

•Forklift selects full pallet for shipment, picks the pallet from storage

•Forklift approaches ship preparation tunnel, photoeye triggers process•Antenna reads pallet tag and case tags on the pallet•System identifies pallet and prints shipping label and tag•Label ready by the time that forklift reaches end of tunnel

•Pallet taken directly to outbound staging

•Idle time eliminated completely


Refining Existing Processes – With RFID

•Before RFID:•Operator bar code scans part number and serial numbers on each individual box•WMS system verifies product and quantity•Pallet is then shrink wrapped•With RFID:•Pallet rotates on shrink wrap machine while antennas read case EPC’s from each box•WMS verifies product and quantity•Results:•Eliminates manual scan step•Reduces cycle time incorporating scanning with wrapping operation


Receives inkjet cartridges in bulk & packages them for different markets

Starting at pallet and case level outbound, will then “walk” back up the process chain to Receiving

Includes systems changes to Shop Floor Control, PLC’s & WMS


Receives components and raw material, manufactures printers then ships finished goods to Latin America Region

Starting at manufacturing, will then “walk” down the process chain to Shipping

Tags carry quality & control data thru the process with the unit as it is built as well as EPC Code


Pilot Horizontal & Vertical Scope Shaping

SNcreation

assyline

functionaltest /audit

bulkpack

CIMATION (log test)

Pass/Fail Bulk Info

BaaN

completionpalletassy

audit

invoicegeneration

BaaN

raw materialflow tracking

stilettoproduct

born

pass/fail logpallet tracking pass/fail log

invoicing data

FGI backflush

product logpallet tracking

Pilot Operational Areas Affected

warehousing

pass/fail log

SAO PAULOBrazil

ChesterVa, USA


RFID – PILOT SCOPE

Tag placing (bottom case)Read: • Material Q.A. • ERP Transfer WH to WIP

Log: •SN •Test pass/fail• Audit•Back flush on ERP system

Read: Mfg pass/failLog: •Product option •Localization Stations (5)•Back flush on ERP

Read: submit product information to Baan (Flex) for invoicing processes. HP SAP will depend on DS project implementation


Further potential RFID efficiencies


He is scanning every printer

engine to capture the

serial number

And he is applying a

barcode label by hand

If every incoming engine was tagged, then serial number could be captured automatically. Label could then be printed and applied automatically further down the conveyor


Component Verification• Every item that goes into

the box is scanned by hand

• Usually under a scanner positioned over the work station

• If every item was tagged then the items would simply be put in the box

• With an automatic verification of all contents against SKU prior to pack out

• A classic example of speeding up the line

He is scanning one product barcode to

ensure the right product is picked

Correct pick will be verified on his on board screen

If items were tagged then no scan would be necessary. Product would be verified as forklift approaches pallet and failing a warning of incorrect product, driver spends all of his time and effort in moving the product on to the next process

Everything stops for this process


Mixed Pallets

• Less than full pallet quantity

• One or more products

• Can only be barcode scanned by un-stacking pallet

• RFID wouldn’t require this


Mixed pallet consolidation

areas could be built here

With readers attached to

building infrastructure

With minimum pallet movement

after content verification to wrap station


Outbound Staging

Pallet staged for loading – pallet

label / tag visible

Barcode scanned to confirm

staging location


Pallet staged for loading

Barcode scanned to confirm which dock door pallet

went out of


Reader would be positioned at

dock door

Reader suspended above

temporary staging lane


It Couldn’t Be Done Before RFID

•Proof Of Delivery is an essential part of trading between the shipper and the Customer

•Today that process lives or dies at just one point in the process – the Receiving Dock

•If this goes wrong, then an expensive and time consuming reconciliation process is launched

•Our research shows that it needn’t have about 80% of the time

•It also impacts supplier / Customer relationships

•RFID can help us avoid much of this pain


Tracking Item MovementPreviously

restricted to Receiving Dock

Delivery can now be “proved” at many points in the process


Sample Product Flow Analysis

The system brings up the items that were shipped against the PO and the PO history, including what is claimed to have been received. It appears the claim is against ScanJet 3970V for 4 units.

The system brings up the items that were shipped against the PO and the PO history, including what is claimed to have been received. It appears the claim is against ScanJet 3970V for 4 units.

Potential Technology DirectionReaders

• Drive at least 32 antenna• Power Over Ethernet ( POE )• Peer to peer communication• DSP at antenna then fiber or Ethernet to controller

Tags• < US$0.5• Peer to peer communication ( tags inside pallet talk to those on

outside )• Active pallet tag to manage item tags

Software• Migrate middleware/reader control functionality to reader

HP’s RFID Profile• We are a technology company with a long solid reputation

for innovation

• Our hardware and software offerings range from handhelds to the world’s most powerful clusters

• We ship products to all of the world’s major retailers• Deep experience in Consulting & Integration services• HP’s Supply Chain is one of the largest in the world• We are implementing RFID in our own manufacturing &

distribution operations• This combination of characteristics has enabled us

to make considerable progress on our path to RFID

Date post:	18-Nov-2014
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