Pervasive / Wireless e-business May 25th IBM RFID Solutions IT Solutions for Business Value...

Pervasive / Wireless e-business

May 25th

IBM RFID SolutionsIT Solutions for Business Value

Jean-Michel CorrieuIBM Europe, Pervasive/Wireless e-Business Technical Sales Manager

e-business on demandPage 2

What is Wireless Computing

“A billion people will interact with a million e-businesses via a trillion intelligent interconnected devices”

– Louis V Gerstner, Jr., 1999


Any device

© Copyright IBM Corporation 20034 © 2004 IBM Corporation

e-BSC La Gaude

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After decades of technology refinement these radio tags have now become very small and inexpensive

A great deal of innovation has brought us to the point where the silicon core of an radio tag is now 0.4mm

The antenna can be printed onto a product’s packaging at time of manufacture

Currently radio tags can be purchased for less that €0.25 in quantity.

=> RFID is small enough, fast enough, and cheap enough to do real work with today.

What makes RFID relevant now?


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RFID enables End to end IT Solutions (Auto ID drawing)

32 4 5 6 7 8

Application Systems

RF Write data to RF tags Trading

Partner Systems

ReadManager

TransactionData Store

Items with RF Tags

Reader

Antenna

Antenna

EDI /XML

10

1Tag/Item

Relationship Database 9

InternetONS

Server

Product Information

(PML Format)Internet

1112


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Progressing…… but still not perfect

Does not work well if the tagged object is made of RF opaque material like metals, several type of liquids, carbon

RF can penetrate only up to a limited depth of a material. So it may be impossible to read all the case tags of a pallet, even if the cases are made of RF-friendly materials

The number of tags that can be simultaneously read/written is limited to about 50 – 100 / second

The following environmental factors can hamper proper reading:- Speed with which the object is moving- Human bodies (composed largely of water)- Presence of RF interference, moisture and metals

Tag technology is not mature, intensive research is being conducted both at the theoretical (e.g., antenna design) and manufacturing (e.g., material used, processing techniques)

7


Emerging Markets – Pervasive/ Wireless EBO © 2004 IBM Corporation

RFID: an ENABLER for Business Value Measurable impact to labor costs Real reduction in errors via automation – reduction in mis-

shipments, lost inventory, and errors in redundant data reads Real gains in productivity by better managing the use of

skilled resources through automation Industry recognized qualitative impacts which returns

improved customer service, lessened warrantee handling, Driving regulatory impacts through compliance activities to

meet governmental regulations Automated POS means skilled resources are in front of your

customers – and not behind a cash register

8



Aligning RFID to business strategy is dependant on the forces that are driving change - multiple factors influence how a particular company might view RFID

Source: IBM Business Consulting Services analysis

Meet minimum requirement (e.g. DoD, Walmart)

Replace or supplement existing barcode systems/applications

Increase accuracy and decrease error rates of existing applications (inventory management, etc.)

COMPLIANCE

Increase throughput Reduce labor requirements Enable Warehouse

Management Enable JIT

manufacturing/logistics Enable real time decision

support Provide internal track/trace of

goods/people Automate and speed

processes (e.g. cross docking)

OPTIMIZATION Transform operating/business models

Enable new sources of revenue

Enable collaboration with external clients/suppliers

Maintain item historical records (where it has been and what it has been through)

Track/Trace goods throughout the value chain both internally and externally

TRANSFORMATION

Low

High

Op

po

rtu

nit

ies

& B

en

efit

s

Low Complexity High

9



Strategic

How can RFID enable our overall strategic vision?

Should we be a leader or a “fast follower”?Which trading partners should I pilot with

and when?How will we operate in a world of dual

processes? And for how long?

Financial

What is the expected return on our RFID investment?

What specific RFID applications can drive value for us?

What is a realistic adoption pattern/rate of RFID and how will that impact my business case?

Organizational

What are the change management implications?

What are the risks involved in an RFID implementation?

Technological

What are our technology requirements for an RFID implementation?

What is the architecture that best delivers on my strategic technology plan?

How will an RFID implementation impact our current applications?

Developing an RFID strategy – Looking for BUSINESS VALUE


Business Value

Innovativebusiness designs that sharpen focusand accelerate growth

Integrated, end-to-end business processes that are built to change

Based on real customer cases with real business processes

An IT operating environment optimized for flexibility and

resilience

BusinessTransformation

On DemandOperating

Environment

Business P

rocesses Business

Transformation

11This IBM Statement of Direction, while subject to change, is intended to describe our planned product line in the RFID space, based upon market trends and IBM’s perceived customer needs.

Extending On Demand e-business systems

Securely connecting the Physical Plant / Operational Environment to the IT / Business environment to allow customers to aggregate, analyze and act upon data to dynamically adjust operations in

response to changes in their business environment

Enable operational control systems to be integrated with Business Knowledge in IT Systems, using open standards-based, Next Generation Pervasive Technologies

PhysicalEnvironment

Aggregate

On DemandInfrastructure

Act

An

alyze

12



RFID across industry sectors

Industrial

Field Service

Healthcare

Retail/CPG

Logistics

RFID Across All Sectors

Government

13



IBM’s Divisions Supporting RFID

IBM has a matrix, non-hierarchical teaming approach to RFIDResearch

Solution Development Alliances

Consulting Services RFID

Trained • Solution Development• Alliances

Software Group

Sensors & Actuators Software Development Alliances Standards Bodies

Industry (S&D, BCS) IGS SWG

RFID Focussed

Tech Group

Systems Group

Personal Systems

Group

Pervasive/ Wireless EBO

StrategyThought LeadershipStandards Bodies

FOAKSolution Development

WW RFID Focused Community

14



IBM’s View – RFID will deliver value in the context of current mission critical business processes

Business ProcessBusiness Process

Websphere Business Integration For Collaboration

Websphere Business Process Modeling / Workflow

Websphere Business Integration

RFID Middleware Server

WB

C G

ate

wa

yW

PS

Po

rta

l

Process IntegrationArchitecture

RFID Edge Server

Db2 IntegratorDB2

Reader

Internal Catalog / PIM/PMLItem Master FileOrder Mgmnt System

RFID Edge Server

Reader Reader Reader Reader Reader Ma

na

ge

me

nt

Auto-IDEnablement

Ex

tern

al

Ca

talo

g/D

ata

Po

ol/

PM

LR

eg

istr

y/O

NS

Ext

ern

al D

ata

A

cqu

isiti

on

Pa

rtn

er

Co

llab

ora

tion

Pa

rtn

ers

Ex

ch

an

ge

s

SC Planning SC Execution Asset Mgmnt CRM

Partner PerformanceVMI/SMICPFR/ SC CollaborProduction Planning

Promotion MgmntAssortment MgMntPrice OptimizationTargetted Marketing

SC Event MgmntWarehouse MgmntOrder ManagementTrans. Logistics

SecurityShrink MgmntTrack & TraceCounterfeiting

Dir

ec

tory

StrategyServices

Business Case

StrategyAssessment

Pilot Definition

Auto-IDTags

Communication & Connectivity

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IBM laboratories worldwide - 8 research centers focused on RFID advanced learnings, 3 testing labs

Almaden Yorktown

ISL Hawthorne

Zurich

ISL Zurich

Beijing

Austin Haifa Delhi Tokyo

IBM RFID Testing LabsGaithersburg

La Gaude

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• Every container has an integrated passive RFID tag with a unique ID (common across all IBM sites) - know where its been, where its going and its history

• IBM software is used to create and write the ID to all new containers • The contents of the container, wafer or recepticle, are associated with the ID in the Factory

Control System's DB2 database• The transponder is read at every processing step to validate that the correct container and

material are going to the correct process tool result

Challenge

Solution

Benefits

• $2.5B Corporate 'from scratch' investment in 300mm Manufacturing and Development. Fishkill then made the decision to use RFID after assessing barcode and infra red systems. The plant needs to use thousands of different active containers for different functions that are transferred from storage area, process tools and manufacturing facilities - all of which are very valuable ($1K per container holding goods worth ~$2M). Their challenge was to create a real time, common container tracking system

• Fabs moved from infrared systems to RFID allowing real-time vs. point to point tracking of wafer containers (on average 25 wafers in each container) providing true track/trace capability

• RFID enabled increased efficiency, decreased error rates, and reduced labor requirements• RFID systems facilitated prioritization of orders, processing of specialty orders, and order routing

during retooling or maintenance accelerating time to market• RFID has enabled IBM’s 300mm fab to run with 60 to 70 people compared with an industry average of

100 to 120, allowing IBM to add value to its products without necessarily adding cost• With automation enabled by RFID, IBM is able to run the plant with skeleton crew when normally they

would shut it down (e.g. holidays)

Customer Reference: Supply Chain: IBM Fishkill Plant

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The Metro Group Initiative has been up and running since April 28, 2003. The initiative helps Metro track and manage grocery store inventory from the distribution centre to and within the retail store environment

IBM have provided business consulting, middleware, implementation, hardware and support.

IBM in collaboration with Intel and SAP have been involved in technology selection and implementation.

Challenge

Metro has decreased misorders and lost inventory due to accurate visibility of inventory from the distribution centre to the retail store

Real-time tracking of retail store inventory helps Metro order new inventory on-demand, reducing “OOS” (out of stock) situations

POS checkout locations are monitored and staff added during peak hours to avoid customer bottlenecks

Customers have instant access to information about products from kiosks located through the store, improving customer satisfaction

Dr. Gerd Wolfram, Executive Project Manager, Metro Group Future Store of the Future says “The tremendous success of the Metro 'Future Store Initiative' is also driven by IBM's contribution to this innovative project. In particular IBM developed a RFID Middleware and integrated a complex RFID solution with multiple functions on pallet, case and shelf level."

Solution

Benefits

Customer Reference: Supply Chain: Metro Group

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• IBM provided an end-to-end solution that encompasses:• Services to support Philips Semiconductors in the STAR proof of concept project approach will be

delivered during the following project phases (total duration 30 weeks), in particular:•Vendor selection •Design and validation •Construction and testing•Targeted launch •Evaluation

• Intellectual property services components; IBM proprietary radio frequency identification (RFID) framework and documentation

•IBM software licences:•DB2 UDB Enterprise Edition (including one year maintenance)•2 Websphere studio application developers for the proof of concept (including one year maintenance)

Solution

Benefits

• The objective of the project was to help Philips increase inventory turns. The project provides near real-time inventory visibility to the Philips Semiconductors business units. It will also enable changes to policies in production and inventory planning systems which will, in turn, drive increased inventory turns

• The project is initially between the Philips Semiconductors Kaohsiung (PSK) site and the Regional Distribution Center Hong Kong (RDC HK) on all packaged quantities and boxes, all customer direct ships (cartons) in AP from the PSK location, all cartons sent from the RDC HK to all destinations and for EXEL (3PL) all outbound flows in Hong Kong

This project will help PSC to further optimize its supply chain and is another step in the route to become an on demand company. The savings will be used to reinvest in competitive advantage and growth.

Customer Reference: Supply Chain: Philips Semiconductors

Challenge

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The U.S. Department of Defense is dedicated to becoming an early adopter of Radio Frequency Identification (RFID) technology. The DoD is currently preparing to read RFID tags at key sites within their supply chain. Beginning January 1, 2005, the Department of Defense has mandated that all suppliers place passive RFID tags at the case, pallet, and Defense Department Unique Identifier (UID) item packing level.

IBM is working with the Department of Defense to:

–Develop test pilot milestones and manage test pilot requirements

–Create project metrics and reporting

–Build a business case analysis of the overall RFID implementation

–Monitor implementation issues and resolution

–Assist in the development and release of RFID business rules

–Establish commercial best practices

–Provide Subject Matter Experts to develop the short term and long term implementation plan

Challenge

IBM seen as trusted brand for US DoD

Solution

Benefits

Solution

Benefits

Customer Reference: Supply Chain: US Department of Defense

Challenge

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Major field trial in RFID USA

Step 1 pilot at one DC in compliance with Wal-Mart Mandate

Integrated to WMS

Step 2 roll-out in 2004 to more DCs (5 to 30)

IBM chosen as RFID System Integrator and RFID Software Infrastructure and Applications Provider

Solution uses Alien UHF tags and readers and Zebra and Printronix printers

Challenge

Different RFID Use CasesRFID Picking/LabellingRFID Goods OutboundOrder verification at case levelLoad verification

Solution

Benefits

Challenge

Solution

Benefits

Customer Reference: Supply Chain: Sara Lee

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Deliver Business ValueFocus on key industriesDevelop end-to-end solutionsProvide Consulting, Integration and Professional ServicesLeverage IBM and non IBM Components Build a strong RFID ecosystem of PartnersSupport and drive open standards

In Short, How do we Help Companies :

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The Yankee Group ranked IBM # 1 in March 2003

“IBM ranks first among the enablers of enterprise mobile computing solutions”

“IBM also boasts the most successful professional services business (IBM

Global Services) in the mobile computing space”

A mid-2002 IDC report shows IBM and PwCC Wireless jointly have close to a

30% market share, and when combined, are over 5 times the nearest

competitors.

“IBM Global Services (IGS) is by far the leading provider of mobile and wireless

professional services. One could be shocked by seeing how far ahead IGS is”

IBM: a leader in mobile and wireless computing

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AMR Recent assessment of IBM

January 2004 release with Metro on Store of the Future and IBM's involvement

IBM--The overall systems integrator on the project, IBM is providing strategic direction, consulting, and implementation expertise. It will also establish an RFID lab in Germany to test supplier interoperability in all stages of the initiative.

The Takeaway: IBM is emerging as the leader in RFID integration and consulting services.

http://www.amrresearch.com/Content/view.asp?pmillid=16933

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