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RFID in the Supply ChainA Balanced View Business Briefing Paper

The Business Situation....................................................................................................................................3Radio frequency identification (RFID): a revolution in progress ....................................................3Put yourself in the view of some of the supply chain challenges today......................................3Supply chain challenges ............................................................................................................................4Are there enough reasons to change? ..................................................................................................5

The RFID Vision ................................................................................................................................................6RFID market context........................................................................................................................................7Building the business case ............................................................................................................................8

Retail outlet ..................................................................................................................................................8Logistics Delivery & Distribution Perspective......................................................................................9Warehouse Perspective ..........................................................................................................................10Manufacturing Perspective ....................................................................................................................11

RFID Journey - Roadmap ..............................................................................................................................12Before taking the RFID Journey ................................................................................................................13Planning the Journey ..................................................................................................................................14

Program Execution Roadmap ..............................................................................................................14Program Phases Vs Deliverables............................................................................................................15Business Situation Analysis....................................................................................................................16Business Scenarios....................................................................................................................................17Business Process Modeling ....................................................................................................................18Business to IT Architectural Design Approach ..................................................................................19The Business Case ....................................................................................................................................20RFID Communication Plan......................................................................................................................21Quality Assurance Planning ..................................................................................................................21

Enterprise Integration Considerations ....................................................................................................22Navigating the Vendor Maze......................................................................................................................23Appendices ....................................................................................................................................................24

Appendix A: RFID standards ..................................................................................................................24Appendix B: RFID Architecture ..............................................................................................................24Appendix C: Radio Frequency (RF) Basics............................................................................................25Appendix D: EPC Network ................................................................................................................25-26Appendix E: Lessons Learnt ..................................................................................................................27

Executive SummaryRFID (radio frequency identification) is essentially in the same positionoccupied by mobility and wireless technology a few years ago. It ispoised to spark a global revolution—in supply chain visibility andmanagement.This paper provides an overview of the business drivers leadingcompanies are assessing to determine if improvements and efficienciesin the supply chain can be achieved using RFID technology. It is a guideto understanding RFID, RFID drivers and the best situations in which toimplement RFID. It also helps with quantification processes for currentand desired states in your business and suggests practical approachesand remedies to barriers that may occur.

Table of Contents

Supply Chain Self AssessmentAre significant resources allocated to determine manufacturing cycle times?

How often are fulfillment commitments missed?

How accurate is WIP status, is it ahead or behind planned windows?

How many times does the business lose goods in the warehouse?

How long does it take to find it? (Was it loaded on the wrong truck?)

How often is the wrong item picked and the order incorrect?

How often is the order delivered late?

How much time and effort is required to handle returned goods?

How much time and cost is expended scanning items and rechecking orders? Verifying physical goods with customer orders?

How often are stock takes conducted to balance inventory, orders, cash?

How much waste does the business have from out-of-date stock?

How often are incorrect goods received?

How often are calls placed to find where goods are at any point of time?

How often do customers request goods that are not on the shelf?

How much effort is required to prove that goods have been delivered and accepted?

How much effort is required to manage the goods return process?

Never Sometimes Frequently



Low Medium Significant






Not Enough Frequently Too Often







Radio frequency identification (RFID): a revolution in progressRadio frequency identification (RFID) technology is not new, its origin dates back to the 1940’s and WorldWar II where it was used for aircraft identification. During the past few years, advancements have beenmade in exploiting the technology even further to achieve business efficiencies and advantages.The Pentagon uses radio frequency identification (RFID) technology to keep troops in the field fromreceiving rations that have exceeded their shelf life. Drivers use RFID to buy fuel and pay tolls. Marathonofficials use it to monitor runners’ times. The State of Michigan uses RFID to track livestock. And RFIDtechnology may even help to prevent tampering with the seven million shipping containers that enterU.S. ports annually.RFID is essentially in the same position occupied by mobility and wireless technology a few years ago. It ispoised to spark a global revolution—in supply chain visibility enabling the delivery of the right goods tothe right destination and at the right time.By some estimates, as much as $45 billion of excess inventory in retail supply chains is unaccounted for atany given moment. This inventory may be lost, stolen, or simply on the wrong shelf, but there is no costeffective way to track it after it has left the last point of departure.

The BusinessSituation

Put yourself in the view of some of the supply chain challenges todayConduct a quick self-assessment for items listed below to obtain a gauge of your organisations challengesas compared to typical problems faced across the supply chain. RFID based technologies alone can notovercome the challenges identified. This paper will highlight the practical application of where it makessense to use RFID and where it does not to help obtain business improvements.

3RFID in the Supply Chain - A Balanced View

Supply Chain ChallengesLook at any organisation within the supply chain and the following will be encountered at some point oftime and with some regularity:

The typical cause of the problems in the supply chain can originate from any one of the following areas:Paper based business processes:• Significant amount of business processes rely heavily on paper based practices. Most commonly

these are internal stock-takes, delivery run-sheets, manifests, proof of delivery acceptance,merchandising, QA checklists.

• The business impact of paper-based practices is the introduction of latency and increased likelihood of capturing incorrect information.

Multiple re-entry of information:• As a result of paper based business processes, information is not entered directly into business

systems at point of capture.• The business impact of re-entry is typically induced errors, additional costs to re-capture the correct

information and longer process cycle times.Passive asset location technologies:• Many organisations rely on people intensive practices (barcode scanning, paper audits) to keep track

of the location of assets throughout the supply chain.• The business impact of these approaches is a lack of trust that the assets are in the same location

as previously reported due to time lag between original recorded times to current time.Manual reconciliation practices:• Across the supply chain there are many handover points that require transfer of inventory ownership.

Matching the physical shipped inventory to customer orders or returns is time consuming and sometimes-impractical due to cost and time constraints imposed within the industry.

• The business impact is not having an accurate view of inventory at the handover point that leads to financial loss and risk exposure as the recipient takes responsibility at that point.

Human initiated business processes:• Many business processes rely on humans to either initiate or terminate a business process.• The business impact is induced latency whereas some processes could be initiated automatically.

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1. Incorrect goods shipped2. Late delivery of goods3. Difficulty locating goods4. Excessive effort required to accurately reconcile

physical goods to customer orders/returns5. Goods misplaced/stolen6. Inaccurate forecast of goods


RFID in the Supply Chain - A Balanced View

Are there enough reasons to change?Any or all of these things could be causing an organisation to lose a competitive advantage that theymight hold in the market. Alternatively, removing some of these challenges can drive a less efficientcompany to a higher degree of competitiveness. Identifying and sizing the business problem is half thebattle. The next step is to determine the potential benefits and examine if they justify the investment andchange required to move to another level.

Achievements with today's RFID-based technologies:The application of RFID based technologies is being used as follows by varying organisations to helpsolve specific business problems:1. Improve the rework/repair processes by identifying available inventory to fix problems

on the bench.2. Improve failure-mode analysis by uniquely identifying and tracing products.3. Increase visibility into the quantity and location of goods in the warehouse - without the

overhead of bar-code based scanning.4. Track stock as it is moved. For example: a staged customer order can be confirmed in

real-time before it is loaded onto a truck for despatch5. Asset tracking - such as containers/pallets can be tracked and located through-out

the supply network6. Obtain visibility of expected arrival time goods and their location in real-time7. Pick goods based on expiry/best before date, lot control8. Get pallet-build confirmation – mixed and single loads9. Identify tampered goods 10. Automate proof of delivery of goods11. Assist the physical to customer order reconciliation process 12. Improve reverse logistics business processes

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MANUFACTURING As goods (e.g. cases) travel down the production line, RFID tags are physically applied and a unique ID iswritten and then validated for quality assurance purposes. The unique ID is automatically associated tothe product/order details to facilitate further tracking and exception management.During the pallet build process; goods (e.g cases) are automatically identified to aid with customer orderconfigurations. Finally, pallets are identified and tracked as they are delivered to the staging area readyfor shipment.

MANUFACTURER --> LOGISTICS PICKUPAs the logistics vehicle arrives at the loading dock, the RFID reader positioned at the loading dockcommunicates with the unique RFID tag to confirm that the logistics vehicle is authorised to pickup goods.Upon approval, pallets leaving the loading dock communicate with the RFID reader to alert B2B systems(ASN) and ERP systems to initiate electronic transactions, proof of pickup and potentially shipment invoicing.

LOGISTICS DELIVERY --> DISTRIBUTION CENTRE (DC)As the logistics vehicle arrives at the Distribution Centre, the RFID reader and middleware initiates anevent that captures the unique ID from the RFID tag, triggering the arrival of the manifest to initiateautomatic routing of the goods to the next logistics vehicle (load consolidation).

DISTRIBUTION CENTRE --> LOGISTICS DELIVERYAs pallets are loaded onto the logistics vehicle the RFID reader positioned above the loading dockcommunicates with the RFID tags. The RFID tags broadcast their unique ID to the reader and via the RFID middleware transfer information to ERP systems indicating that the manifest is loaded.

LOGISTICS DELIVERY --> RETAIL OUTLETAs the shipments of goods arrive at the receiving dock (again being detected by RFID readers), Retail ERPsystems are updated to manage inventory levels (automatically, accurately and at low cost) and initiateB2B messages to Suppliers to commence invoicing.

RETAIL OUTLET --> CUSTOMER (long term vision)As items are removed at shelf level, the RFID reader can automatically detect the event and via the RFIDmiddleware, initiate additional product supply requests. With such a system in place, the need tomaintain costly volumes in remote warehouses is almost eliminated. At this point of the process, thecustomer is initiating direct demand generation on the supply chain management process.

CUSTOMER (long term vision)Rather than wait in line for a cashier, the customer simply walks out the door with the purchase. A readerbuilt into the door recognises the items in the cart by unique ID’s. A swipe of the debit or credit card andthe customer is on their way.

Vision & Key Benefits AreaUsing RFID in pivotal points in the supply chain can help enable a vision of having goods available tocustomers at the right place and at the right time.RFID technology is an enabler of this vision aiding the synchronisation between physical and informationflow of goods across the supply chain from Manufacturer to Retail Outlet, represented as follows:

The RFID Vision

A Typical Supply Chain

Sales

Retail Outlet

Puta

way

Rece

ipt

Returns(enable returns automation)

OrderForecast

Assemble

Manufacturing

Test

Build


ShipQA

Track

Logistics

Rece

ipt


Deliver

Track

Logistics

Rece

ipt


Deliver

Streamline handoverprocess




Consolidate Load

Distribution Centre

Rece

ipt


Ship

Support cross-docking

initiatives

Minimizingout of stock

Supportconfigure to

order demands

1 2 3 4 5 6

7

Key PointRFID technology enablesthe automation of keybusiness processes byremoving humanintervention and allowingstraight-through processing of information.A key advantage overbarcode linked businessprocesses!

1

2

3

4

5

6

7

6 RFID in the Supply Chain - A Balanced View

Market Drivers*The following market drivers are initiating the need for change across the overall supply chain:World’s supply chains are not totally effective:• Up to 20% of foods are discarded due to spoilage in the supply chain (US FDA)• 75% of the cost of a retail product is getting it there (MIT)World isn’t perfect:• Product diversion, including smuggling, is large and increasing • Global shrinkage in the Consumer Packaged Goods (CPG) supply chain is $60B yearly

(Shrinkage=theft, expiry, loss, damage before reaching the customer)• Direct and indirect cost of cargo theft is $20-60B yearly • Counterfeiting – 10% of the products are counterfeit – over $100B yearly • Terrorism: more than 50,000 containers enter US ports every day. 120,000 trucks enter the US

across the Mexican border alone; only 1-2% are inspectedImbalance between supply and demand in the supply chain:• Stock outs at retailers cost 6% of sales (P&G) • Over 50% of trucks on roads are either part or fully empty or are returning unwanted or

expired products.

* HP Supply Chain Market Research, December 2003

RFID MarketContext

7

Programs UnderwaySignificant industry leaders have embraced and even mandated RFID technologies driving changewithin the market place as follows:In June 2003 Wal-Mart, the largest retailer in the world, announced that its top 100 suppliers muststart implementing RFID at pallet and case level by 1st January 2005. This was followed by furtherannouncements requiring next 200 suppliers to implement RFID by the end of 2006.The US Department of Defence made a similar announcement regarding the RFID tracking of palletand case level plus item >= US$5000 by 1st January 2005. Current systems employed by DoD use activeRFID technology for the tracking of containers – passive RFID, on the other hand, will extend thesesystems to also track the contents of containers, by using combinations of GPS and satellitecommunication technologies, for example.Hewlett-Packard, which has the world’s ninth largest non-military supply chain, will comply withdirectives from both Wal-Mart & US Department of Defence. HP began trials and pilot projectsinvolving RFID technology more than two years ago, both to improve its own supply-chain management and to offer new capabilities to its customers.Marks & Spencer has attached significant amount of RFID tags to returnable delivery trays and focusing on individual garments. The tagging aims to assist with stock management throughout thedistribution chain.Metro Group began a pilot before the end of 2004 for top 100 suppliers to deliver RFID-enabled pallets.Procter & Gamble, Warehouse automation: tracking pallets throughout one warehouse.Tesco mandated in 2004 that it will apply RFID tags on cases of non-food items at its distributioncentres and track them through their stores.


The purpose of a supply chain is to generate profit from the provision of goods and services relying onretailers, distributors, transporters, storage facilities and suppliers that participate in the sale, delivery andproduction of those goods. There is fierce competition between supply chains in the market. Beingprofitable and remaining competitive is a fine balance. Key to profitability and agility of supply chains islargely determined by the effectiveness and efficiency between trading partner interactions.Therefore, it is important to understand the key challenges being faced by the following trading partnersand areas of improvement they are seeking in order to improve operational effectiveness and efficiency.

Retail OutletA key strategy for Retail is managing product availability of goods that customer’s want to purchasewhilst minimising inventory stock on hand and maximising speed to shelf, a fine balance to say the least. The challenge is being able to obtain both real-time demand and supply chain product visibilityusing cost effective and efficient approaches.To aid with supply chain visibility, radio frequency identification (RFID) based technologies are being used primarily at pallet/case levels to help optimise the goods receipt and handover processes. Thisachievement provides inventory visibility between receiving dock to shop floor.To venture further to shelf or point of sale level with RFID based technologies, a significant amount ofmovement and stability will be required with respect to:1. Privacy laws 2. Standards3. Maturity of technology4. Cost of technologyOnce the environmental elements stabilise, Retailers will be striving to drive change throughout thesupply chain to achieve further shareholder growth* as shown below. It is important to note thatthis growth is dependent on collaboration by participants within the supply chain by either compliance or partnership!

8

Building theBusiness Case

Retail Shareholder Growth Expectations

•� Increase retail promotion effectiveness�

•� Improve available invention�

•� Reduce shrinkage

•� Reduce inventory handling cost�

•� Reduce warehouse, distribution & transportation cost�

•� Improve customer service, real-time ATP�

•� Reduce write-offs, waste

•� Improve inventory returns�

•� Improve cash flow managment�

•� Reduce slow moving and obsolete SKU’s

Market intelligence�

Market share�

Volume

Revenue

Operating�Income

Capital�Efficiency

Shareholder�Value

Cost of Goods Sold�

Operating Costs

Fixed Capital�TurnoverŁ

�Working Capital�

Turnover

Key PointRetail strategies arechanging and impactingother supply chainparticipants by:1. Increasing SKU

differentiation 2. Reducing store touch 3. Demanding higher

service levels

1. Retail Outlet2. Logistics Delivery & Distribution 3. Warehouse4. Manufacturing


* Auto-ID Center – extract from "Focus on Retail: Applying Auto-ID to Improve Product Availability in the Retail Shelf"

Logistics Delivery & Distribution PerspectiveA multitude of challenges exist in the logistics environment applied to people, processes and systems, to:

As a result of logistics challenges, RFID based technologies are part of an overall solution mix to helpmaximise customer satisfaction, decrease human-intensive business processes (lowering cost, improvingproductivity) and improving quality with accurate data capture.The areas of focus for business improvement include:Goods pickup process by:• Streamlining the handover process by removing significant human effort to reconcile physical goods

to customer order (current approaches rely heavily on barcode scanning and or trust that all goods are present). Hence, RFID technologies aid with the unique capture of goods without human intervention, providing an accurate view of what is on the vehicle at that point of time.

• Generate automatic events to update inventory and route management systemsGoods receipt process (at logistics HUB) by:• Streamlining the handover process by removing significant human effort to reconcile physical goods

to customer order. Hence, receive an accurate view of what is in the premises at that point of time.• Generating automatic events to update inventory management systemsSLA management process by:• Obtaining real-time event and identification information from RFID enabled goods to accurately

determine lead times to assist the Merge & Transit processes.• Update track and trace systems and route management systems with RFID event generated

information to aid with DiFOT (delivery in full on time) commitments.Goods loading process (at logistics HUB) by:• Automatically route correctly identified goods (part of cross-docking objectives) to line haul vehicles.• Streamlining the handover process by removing significant human effort to reconcile physical goods

to customer order. Achieve an accurate view of what is on the vehicle at that point of time.Delivery Port processes by:• Streamlining the handover process during unloading at delivery port and delivery to customer

(similar approaches to above – verifying the physical match to customer order)• Automatically route correctly identified goods (part of cross-docking objectives) to transport

vehicles for the final delivery• Updating both inventory and route management systems

9


1. Successfully maintain SLA’s & customer satisfaction levels 2. Ensure misdirects are minimised3. Accurately know at any point of time where goods are between the consignee and consignor 4. Compete in a very aggressive market with low margins


Warehouse PerspectiveSuccessful warehouse management requires the accurate forecast of the flow of goods, both roll-in androll-out. Being unable to accurately manage the forecast can lead to operational issues surrounding:

To better manage the forecast and operational expenditure/risks, Warehouse Managers are assessingRFID based technologies in the following ways.Goods receipt process, by:• Obtaining advance real-time notice of arrivals/delays • Automating (hands-off approach) the detection of goods and cross matching to consignment notes (at

this stage, the predominant note is paper based) for better asset and reverse logistics management.Goods putaway process by:• Ensuring the goods are correctly identified and stowed in allocated bin locations• Generating automatic events to update inventory management systemsGoods pick process by:• Ensuring the correct goods are picked and staged in allocated areas• Generating automatic events to update inventory management systemsGoods staging process by:• Ensuring correct goods are staged/packed together correlated against shipment manifests

verifying correct parent/child relationships – reducing potential errors in shipping incorrect goods.Goods loading/shipping process by:• Ensuring correct goods are loaded onto assigned vehicle• Clean handover of goods between warehouse and carrier• Reduced operational expenditure to reconcile transfer and ownership• Automatically updating inventory management systems and sending Advanced Shipment Notices

(ASN)

10


Key PointTo obtain real-timetracking information of goods additionaltechnologies are required, such as:• GPS (global positioning

satellites)• Wireless data networks

(e.g GPRS, 3G)

1. Back-up storage required to manage the variances, leading to additional costs2. OH&S issues due to additional movement and storage of goods which raises the potential

probability of accidents3. Staff utilisation – under/over, leading to dissatisfaction for overworked staff and or additional

costs to cater for overtime or more staff.4. Security challenges due to the greater potential for shrinkage with the overflow and volume


Manufacturing PerspectiveThe use of RFID based technologies within the manufacturing environment is primarily being usedinternally (within the four walls) to aid with product:

To achieve further benefits beyond the "four walls", the Manufacturer needs to actively collaborate withWarehouse and Logistic Delivery entities. The diagram below (see tick marks) highlights the potentialbenefits that should be able to be achieved between the Manufacturer, Warehouse and Logistics Deliveryorganisations. The process specifically focuses on ensuring the right product reaches the right destinationat the right time.The final phase is to join all supply chain participants together to provide an integrated value chaincovering forward and reverse logistics. In doing so, all benefits listed below should be achievable.

11


Key PointKey challenge being facedis meeting increaseddemands of Configure toOrder - Impacting cycletimes, SLA’s, trading costs,traceability and qualityassurance.

Accrued business benefits from "tagging"

Oppo

rtun

ities

& B

enef

its

High

Low

1. Identification & Verification2. Routing3. Build configuration4. Control & Recall

5. Tracking6. Management7. Warranty support8. Returns


There is a natural evolution or journey that an organisation will go through to establish and prove thebusiness value of RFID, as follows:

Research PhaseDuring the early stages of the journey a local champion is either appointed or volunteers found to findinnovative approaches to improve business results. Information is gathered and shared once it is evidentthat RFID will provide business benefits. The amount of organisational change and investment required is quite minimal at this stage.Experimentation PhaseUpon determining some business fit with RFID based technology, the organisation initiates the journey to prove the business value via controlled "proof of concepts", led by the appointed RFID champion. Theobjective is to obtain practical lessons learnt to further justify expenditure and organisational change.Tests are typically conducted within the organisation's test environments, not production environments.Still within this phase, investments are minimised and typically kept within a single business unit tocontrol the level of organisational change.Business Pilot PhaseDuring the pilot phase a project team is formed and led by a project sponsor. A business case with successcriteria is developed for implementing a pilot with sufficient scope to derive business benefits. The pilottypically will go through a full project lifecycle with implementation deployed to the productionenvironment. After the agreed pilot phase, formal lessons learnt are captured with additional planningcompleted to further justify expenditure and wider roll-out.Program of Works PhaseThe final stage is to establish an executive team that oversees the project management office (PMO).The PMO has the charter to manage the business initiative requests, prioritise and submit for executiveapproval. Upon approval, the PMO assigns appropriate project teams to implement and manage theproject to derive target outcomes.Significant effort allocation is required during this stage and organisational change management iscritical. Hence, regular and formal internal and external communication is required to share insight,business outcomes and PMO functions.

12

RFID Journey -Roadmap

1. Research Phase 2. Experimentation Phase 3. Business Pilot Phase 4. Program of Works Phase

Research

• Local champion appointed• Information gathering• Checking business fit• Informal knowledge sharing

Experimentation

• Champion led• Low risk investment• Case for experimentation • Simple proof of concept(s)• Test environments• Practical insight• Case for further investment

Business Pilot

• Sponsor led• Business case• Funds allocated• Project team formed• Detailed project plan• Pilot executed• Production environment• Pilot review• Findings captured & shared• Case for further investment

Program of Works

• Exec core team formed• Project office established• Project process promulgated• Project submissions• Business case analysis• Project prioritisation • Project approval/ execution• Project review (business case)• Findings captured & shared

Man

agem

ent o

f Cha

nge

Inve

stm

ent $

$


For most companies important questions must be answered while investigating and evaluating thebusiness value of RFID. Business unit managers don’t want to lose competitive market positions. CIO’swant to ensure the IT strategy derives business outcomes whilst minimising risk exposure.Before taking the RFID journey, the following questions could be raised to help determine if theorganisation is prepared.External Drivers/Challenges:• Do any of our customers require RFID tagging?• Will any of our suppliers provide RFID tagged inventory to us?• Will we face any privacy issues? • How do we handle external communications, covering media, consumers, vendors and

related supply chain partners?• Our major competitor is publicly announcing pilot trials and gaining mindshare, why is

our organisation so slow? Business Justification:• What are the implementation costs?• What does my business unit get out of it?• What are the real business problems to solve, not just industry/vendor hype?• Can we substantiate a business case by our own merits as compared to basing the move

on "Compliance"?• Will the business case be based primarily on employee productivity savings, hence work

force reduction?• Can we reduce the cash to cash cycles?Internal Policies:• What is the company communication strategy regarding customer privacy concerns?• Who will handle media enquiries?Standards:• Without agreed standards, will our investment be wasted if we launch too early?• Can we procure RFID infrastructure that can be field upgraded to new standards?• What frequencies should we select?Implementation:• Can’t we just slap and ship? • Do we store information on the RFID tags or some type of data store?• Do we have to upgrade the backend ERP systems, will they handle EPC’s?• Where should tags and readers be placed and what type should be used?• How do we overcome problems reading through liquids and reflections due to metal objects?• How do we overcome interference caused by co-channel interference caused by multiple readers?• What power levels should be used?

13

Before Takingthe RFIDJourney

Key PointBeing prepared impliesplanning. To help overcomethe potential organisationaluncertainty it is importantto plan the journey, focuson the first key phases as a priority1.Research2.Experimentation


As with any new business initiative planning is the first step to maximise success. The followinginformation* is provided to help an organisation structure a planning framework, use various methodsdefine the problem and approaches to align the views between the business and IT to focus on derivingbusiness outcomes.

Program Execution RoadmapThe following is representative of the key phases that need to be considered for any RFID based project:

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Planning the Journey

Key PointFilter through all thevendor/partnermethodologies and at aminimum:1. Define the problem;

establish a starting point2. Go on site visits; see

RFID in action3. Develop a simple

business case to justify a trial

4. Conduct a contained trial without being too ambitious.

1. Sample: Program Execution Roadmap 2. Sample: Program Phases Vs Deliverables 3. Sample: Business Situation Analysis 4. Sample: Business Scenarios 5. Sample: Business Process Modeling 6. Sample: Business to IT Architectural Design 7. Sample: Business Case 8. Sample: Communication Plan 9. Sample: Quality Assurance Planning

*Sanitised samples from HP internal RFID project collateral

RFID Program Execution Stages

Strategies Plan Design Implement Support/Manage

Program Governance

Horizontal Planning

Strategy Development

Project Team Formation

ExecutiveEducation

Site Visits

Business CaseDevelopment

BusinessProcess

Innovation

Business ProcessModeling

Business to ITArchitectural Design

Proof of Concept

Pilot Execution Pilot Review

Enterprise Deployment

ContinuousBusiness

ImprovementBuild Vision

Establish Baseline

Try and Learn

Ready to Go


Program Phases Vs Deliverables The following table provides the typical phases and deliverables that need to be considered for RFIDbased projects.

15


Key Point• Where to start is

sometimes the issue.Early investments need to be carefully planned.

• As a priority a series of "story-boards" depicting what-if business scenarios should be generated to help align the thoughts in the organisation

• Hence, focus inital effortsto build the vision for the organisation and don'tforget to see RFID working in real "electricalnoisy" environments, notjust in the lab!

Key PointUse the System InterfaceSpecification to clearlydefine boundaryconditions.This provides clarity to ITteams when integratingRFID middleware to Enterprise Systems.

Program Phase DeliverablesHorizon Planning

Program Governance

Strategy Development

Project Team Formation

Executive Education

Business Situation Analysis

Site Visits

Business Case Development

Business Process Modeling

Business to IT Architectural Design

Pilot Execution

Pilot Review

Set Direction

Build Vision

• Transformation Roadmap

• Project Management Office Charter• Project Status Reporting• Communications Policy• Customer Privacy Policy • Knowledge Sharing Process• Vendor Selection Process

• High-Level Business Plan

• Project Team Charter

• Executive RFID Brief• External Communications Guide

• Business Context Map• Business Scenarios

• Site Report• Lessons Learnt

• Benefits Summary- Tangible- In-Tangible

• Costs Summary

• Level 1 Business Process Model• Level (n) Business Process Model

(covering identified improvement area)

• High-Level Architectural Blueprint• Detailed Project Plan

• Project Team Charter• Updated Project Plan• Quality Plan• Detailed Business Scenario (Use Cases)• Functional Requirement Specification• System Interface Specification• Detailed Architectural Design • System Test Plan • Infrastructure Configuration Specification• Bill of Materials (BOM)• Operational RFID integrated system

conforming to:- Functional Requirement Spec- System Interface Spec

• Planned Vs Actual Costing Report• Business Case Validation Points• Project Lessons Learnt

EstablishBaseline

Try & Learn

Start Here


Business Situation Analysis Prior to experimenting with any RFID based technology, it is important to define the current statebusiness situation. The objective therefore is to obtain the macro view of the operational effectivenessand efficiencies to help isolate particular areas that need attention the most. A team size (less than 5)should be selected to map the current state situation.The following diagram provides one approach to capture the current state situation of an organisation,highlighting an area that needs improving. For this example the Product Returns process is identified as amajor issue impacting business effectiveness. The approach used in this example takes into considerationthe organisational entities and relationships, information flows to then overlay identified issues to areasof concern.This style of mapping can be used to drill down to individual business units and further to departmentallevels as required. In this example, ISSUES are denoted with a fire with supporting notation to highlightthe problem, e.g PHR (P = paper based practice, H = human intensive process, R = re-entry of information).

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Key Point• Have a good mix of

lateral and analytical thinkers to accelerate the process.

• Ensure business & IT interests are represented.

ENVIRONMENTAL ISSUES

MARKET RESOURCES

Business

COMPETITION

CustomersTier 1

CustomersTier 2

CustomersTier 3

R&D

Suppliers

Capital &LaborMarket

Distribution

Sales &Marketing

Manufacturing

Research &Development

Management Procurement IT Legal Finance HRPromotionsProductsOrdersForecast

Issues

P + Paper Based Practices, H = Human Intensive Practices, R = Re-entry of InformationC + Communication Intensive Practices, A = Accuracy Errors, D = Duplication of Practices

ProductsInvoice

Returns

PHR

Promotions

OrdersCancellationsForecast

Cancellations

Sales ForecastsOrdersNew Product Specifications

Returns

Products

Designs

DesignFeedback

Technology

MaterialEquipment

Orders

Capital

People

GovernmentRegulations Economy Public Opinion Technology

Legend


Key PointCreate desired statebusiness scenarios for each area that requiresimproving.Do this with assignedbusiness analysts and getIT involved.Taking this step will help:1. Capture business

requirements2. Set direction for the

IT teams3. Maximise alignment

between business & IT

Simplified Business Scenario - Shipping Goal

Preconditions

Linkage

ZONE

Key Stakeholders

Event Trigger

Success Scenario

Exception Scenarios

Identify every Pallet being shipped through the dock zone is linkedcorrectly to a consignment and delivery destination and has thecorrect amount of cases.

• Pallets & cases have valid and unique ID (e.g EPC)• Pallet ID is linked to order/cases• Pallet shipment details are known

• INTERNAL: Palletising Business Scenario • EXTERNAL: Goods Unloading Business Scenario

Shipping Dock

• Roles: Logistics Manager• Systems: Production Management, Inventory Management

Arrival of Pallet with valid and unique ID

• Successful identification of the Pallet ID and confirmation ID is unique

• Successful identification Pallet ID is assigned to a valid customer order

• Successful identification that all cases are with correct pallet(parent/child relationship validated)

• Inventory system updated• ASN (Advanced Shipment Notice) sent to recipient.

• Generate alerts error messages when- Pallet does not have unique and valid ID- Pallet not associated to customer order- Incorrect pallet being loaded onto vehicle- Missing items

1 Manufacturing:• Packet labeling• Palletising• Goods loading (Shipping)• Product returns

(Reverse logistics)

2 Packaging:• Goods unloading (Receiving)• Putaway-Pick• Packet labeling• Palletising• Goods loading (Shipping)

3 Retail Outlet:• Goods unloading (Receiving)• Putaway• Retail Shelf Stock

Replenishment• Product returns

Business Scenarios The purpose of defining the current state situation is to establish the operational effectiveness andefficiency baseline. Business scenario planning is conducted to architect desired state operational models.Careful planning is required at this stage because the business scenario models form the basis of businessand IT requirements.A well formed business scenario (use cases) captures the specific objective, business rules to help achieveoutcomes and approaches to manage exceptions to the rules. Business scenario planning can be appliedacross multiple areas as listed below:

17



Business Process ModelingTo better quantify the business situation (current and desired state) it is important to drill-down into thedetails. Business process mapping is one approach to link organisational responsibilities, dependancies,workflow activities, cycle time and technology to help quantify the situation.During current state analysis business process mapping should focus on isolating the problem, whilstdesired state analysis should focus on business innovative approaches to remove non-value added steps.The following figure represents a method to map (at a macro level) where RFID technologies integratewithin company business processes (note: this is a map of desired state). It is essential to have crossbusiness representation when exploring how to innovate existing business processes with RFIDtechnologies. The extension to what is shown is to overlay the process performance metrics such as cycle time, costs and risk exposure.

18


Key PointRFID technologies actas a catalyst for businessinnovation, therefore,map the current statebusiness situation firstbefore architecting thedesired state.

Business Process to RFID Technology Mapping

Production

Packing

Warehouse

Planning

Order Office

Start

Start

Start

ProductionOrder

Production Plan Issue Plan toPacking

Issue Plan toPacking

BTO - Build toOrder

Backflushing Material Flow Rack

MaintainTransactions

Issue Material toLine

Backflushing Dispose Materialfor Invoicing End

Release finalproduct for Backflushing

Flex PackProductionReceive Material

and release signedelectronics request

report

ElectronicRequisitionsagainst Flow

Rack

Issue Plan toMaterial Feed

CheckProduction

Order

MaintainTransactions

Print ElectronicsRequisitions

Remove Materialform Physical

Inventory

Deliver materialagainst sign off

RFIDEnablement

RFIDEnablement

RFIDEnablement

RFIDEnablement

RFIDEnablement

RFIDEnablement

RFIDEnablement

RFIDEnablement


19RFID in the Supply Chain - A Balanced View

Business to IT Architectural Design ApproachIt is paramount to ensure alignment of views between key stakeholders when undertaking RFID based projects.The most effective and efficient way is to conduct a workshop with identified stakeholders that focus on aparticipatory approach to establish a common vision, strategy, and architecture that integrates the needsof all involved.Four key views (shown below) are used to link business, functional, technical, and implementation needs.Each view answers particular questions and is expressed as principles, models, and standards. Takentogether, the four views create a snapshot of what the solution should look like and a plan to executeagainst.The typical attendees to derive a successful outcome include:• Senior Business Executive (part-time)• Project Sponsor • Business Unit Manager(s)• Business Analyst• End Users• Enterprise Architect• IT Application Manager

As a result of the workshop the project team should be able to produce the following:


Key Point• The Business Situation

Analysis phase must be completed prior to this phase.

• This will enable the appropriate business representatives to be selected prior tothe workshop.

Business View

• What are the internal and external drivers?• What are the business processes?• Who participates in the business processes?• What are the business performance metrics?

Functional View

• What are the business “objects”?• How will these “objects” be used?• What is the relative priority of each of these functions?• Which of these functions will be incorporated in a first release?

Implementation View

• How will the system be deployed?• How will it be managed?• What will stop success?• Who has the right experience?

Technical View

Business toIT Alignment

• How will functions be made available to the user/system?• What system interfaces are required?• How will systems interact?• What will the interfaces look like?

1. High level architectural design2. Detailed project plan3. Information to go into the business case

20 RFID in the Supply Chain - A Balanced View


Key Point• Ensure that the

productivity and costbenefits are "de-hyped".

• Define a model and use simple proof of conceptapproaches to validate assumptions.

• Go back to planning business case models to refine outcomes, before proceeding.

• People and system costs to the business • Activity based costing analysis for:

- Re-entry of information- Errors associated with re-entry of information- Scanning of goods- Paper based practices - Communication based practices

• Reports on productivity time savings• Reports on cost benefit savings• Reports where risks are reduced• Sensitivity adjustments (up/down) to

savings (to remove the hype) • Life cycle investment requirements• ROI analysis (NPV/IRR and Cashflow)

The Business CaseThe development of the business case for RFID based projects must compare current to desired statesituations covering:

The steps to follow therefore are:1. Build the vision: ensure alignment exists between key stakeholders (business, IT and end users)2. Baseline business processes (current and desired): set realistic organisational improvement objectives3. Derive project costs: stage the investment for proof of concept --> pilot --> implementation4. Analyse project returns: covering both financial and non-financial5. Conduct sensitivity analysis: applicable to pilot and implementation stages, covering both costs and risks6. Test the business case: conduct walk-thru's and other tests to validate key areas in the business case7. Derive financial analyis report: covering NPV,IRR and where applicable key efficiency ratios

e.g inventory turnover8. Present for approvalThe following model represents a tool being used to help quantify the business case. A sample screen isshown on the inputs that go into the model.

21

RFID Communication PlanWhen RFID projects go beyond the experimentation phase, formal and regular communication is required.The communication plan should cater for internal and external needs with information being shared via:

The following is a sample structure for a RFID Newsletter summarizing the status of a company wide RFIDprogram aimed at internal use only.

Quality Assurance PlanningA quality assurance plan must be incorporated as part of the overall implementation strategy. At aminimum the plan needs to ensure that there are sufficient processes, checks and balances in place toguarantee that all RFID tags placed on containers, pallets, cases and items have been written correctly and are intact prior to shipment.The business scenario planning process forms a good basis for the quality assurance plan by providing thedefinition of success and failure conditions. The quality assurance approach must demonstrate how testshipments can be processed through all subsequent stages of the delivery and returns process to ensureinformation can be extracted/updated for RFID enabled goods.


RFID Newsletter (Sample Table of Contents)

1. Executive Summary

2. Welcome

3. RFID Sponsors

4. Communications

a. RFID Interested Distribution List

b. RFID Knowledge Portal

c. Public Relations

d. Conferences

5. Hosted Customer Visits & Request Process

6. Monthly RFID Calls

7. Customers Requiring Tagging

8. RFID Implementation Blueprint

9. RFID Standards

10. RFID Regulations

11. RFID Frequencies

12. EPC Codes Assignment & Management

13. Contacts

14. Internal RFID Procurement Process

15. RFID Core Team Members

16. RFID Central Team Members

17. Item Tagging Status

18. Customer Privacy

19. Pilots & Implementations

20. Areas of Concern

21. EPC Code Management


• Executive briefs• Team portal• Newsletters• Email• Press release

22

Enterprise integration is the task of making disparate applications work together to produce a unified set of functionality. These applications can be custom developed in house or purchased from third-partyvendors. They likely run on multiple computers, which may represent multiple platforms, and may begeographically dispersed. Some of the applications may be run outside of the enterprise by businesspartners or customers. * Reference Enterprise Integration Styles By Gregor Hohpe and Bobby Woolf.RFID based technology provides another input/extension to the enterprise integration strategy, as such,the project team must review the organisation Business/IT strategy to determine how enterpriseintegration is managed within the fours walls and beyond.The major area of focus for the RFID technology with respect to enterprise integration is the RFIDmiddleware as it covers the requirements for integration, device management, security, processmanagement and administration.To aid with the RFID middleware selection the project team must define the following for the project:• Requirements specification (Functional & Non-Functional) • System interface specification These two documents help the enterprise architect determine the most appropriate design approachtaking into consideration the Enterprise Integration Strategy and stated project specifications. Theimplementation choices that the enterprise architect will face includes the trade-off comparison betweenprocuring commercial off the shelf (COTS) RFID Middleware and in-house development to meet statedproject specifications.The RFID Middleware selection criteria is typically based on the following:1. Compliance to standards 2. Scalability 3. Open architecture for enterprise and trading partner integration 4. Process orchestration (flexible business rules) 5. Device Management6. Security

EnterpriseIntegrationConsiderations

Key PointAsk the question to IT,"What is the companyenterprise integrationstrategy"?

Key PointThe enterprise integrationstrategy for the RFID basedsolution MUST adhere toopen standards.

Key PointThe enterprise architectneeds to be mindful of therandom volumes of data(business events) as it mayimpact on the performanceof the system.


Key PointBefore engaging withVendors, ensure internalneeds are clarified. Use the "Business Scenario"framework as one approachto help set direction forinternal business needs.For Vendors proposingoverall solutions, requestthem to conduct livedemonstrationshighlighting howexceptions are managedbased on "RF noisy"environments.

Technology Vendors Consulting/Integration Vendors

RFID Tag/Antenna/Reader ManufacturersWhat do they typically sell? • Tags/Antenna/Readers at a minimum.

• Reader software drivers; aligning to preferred RFID middleware software.

Checklist:• What standards (e.g EPC/ISO) do products

comply with?

• Can products be upgraded in situ or do they have to be returned to the manufacturer?

• What options exist for preventing un-authorised access (read/write) to data on RFID tags

• Who do they partner with for integration?

RFID Middleware What do they typically sell? • Typically a platform that can integrate across

different vendor RFID readers and enterprise applications (e.g. SCM, ERP, CRM)

Checklist:• Is middleware based on open architecture

standards?

• Does the middleware handle business rules,if so,how?

• How will upgrades be managed to cater for maturing standards (e.g EPC) in terms of price and new releases?

• What platform does the middleware require?

• What RFID Reader drivers are available?

• What integration approaches (e.g adapters,web services, message queues, ODBC/JDBC,native API) exist to connect to enterprise data?

• Who integrates the middleware?

Application Providers (e.g. ERP, SCM) What do they typically sell? • RFID Middleware extensions to their

applications. Some extend the reach using their own proprietary methods, whilst others use open based standards.

Checklist:• Do the "extensions" enable connectivity to

other vendor enterprise applications, if so, how?

Use the checklist from RFID Middleware as well.

Consulting Firms What do they typically sell? • Typically strategy development, business case

formation, business process optimisation and establishing the enterprise architecture.

• Partnering with a systems integrator or managing multiple technology vendors to deliver the solution.

Checklist:• What is the approach to prove the business

value of RFID based solutions?

• Are there simple tools to help build and validate the business case?

• What approach is used for managing organisation change?

• What type of methodologies and tools are used to model business processes?

• What interfaces exist for selected process modeling tools (input/output), such as BPML,ebXML?

• Is there a back-to-back agreement between the preferred system integrator or technology vendors?

System Integrators (SI)What do they typically sell? • Typically project management, end to end

technical solution (RF + Enterprise Integration) and system support.

• Partner to deliver RF site surveys.

Checklist:• What radio frequency (RF) expertise does

the SI have?

• Is the SI niche focused or going after a broad market?

• Can the SI link technology to business processes?

• What integration methodologies are used?

• Are there back-back agreements between the SI and RFID vendors and application providers?

• How is support structured and delivered?

Note on System Integrators.To better understand the profile of the SI,determine if the SI is (helps gain a perspective)

• Traditional IT based extending to the RFID world or

• RF engineering based extending to IT enterprise integration space.

A RFID based solution typically consists of many elements ranging from tags, antennae, readers, software,application integration software, security, support etc. There are several considerations worth noting foreach type of vendor in order to evaluate what they can and cannot do.

23

Navigating the Vendor Maze

Key PointHaving choice is good,but knowing what to askand what to look forensures informed decisions are made.

Key PointAsk all Vendors, do theyhave local capability, if so,where have they done this before.


24

The current state of RFID standardisation is in some disarray when considering individual countryregulations (frequency, power), vendor proprietary systems and organisations vying to set globalstandards. The following two organisations are leading the definition of RFID standards:

EPCglobalEPCglobal is an organisation that is working to develop the electronic product code (EPC) RFID standards.The standards are being developed in cooperation with the AutoID Laboratories, a joint venture betweenseveral universities. EPCglobal is a non-profit joint venture between the Uniform Code Council and EANInternational.The EPCglobal network is a RFID based system envisioned to use existing telecommunications infrastructureand an electronic product code under open global standards to create cost efficient, real-time, accurateinformation about the location of items, the history of items, and the number of items in the supplychain. For more information about EPCglobal, see their web site at: http://www.epcglobalinc.org/International Standards Organisation (ISO)The International Standards Organization (ISO) is an international association of national standardsbodies. ISO produces guidelines, procedures and policies on a wide range of issues and applications.Standards produced by ISO provide a template for member bodies to develop their own standards.Regulators may adopt these ISO standards unchanged, or modify them to suit local conditions orrequirements. The result is standards that are internationally compatible, consistent and clear.For more information about ISO, see their web site at: http://www.iso.org

Appendix A:RFID standards

Key PointStandards are emerging,however there is no globalstandard existing today


Key PointThe RFID Middleware isthe critical componentto enable real timeprocessing as it provides a foundation for eventdriven architectures.

Key PointThe antenna selectioncriteria should cover thefollowing:• Read range is a function

of the size of the antenna,and power levels.

• Antenna to Tag orientation is a function of the polarisation, for example circular and vertical.

• Antenna size is primarilya function of operationalfrequency.

A. The RFID middleware initiates instructions to (via pre-defined business rules) to issue read commands to the RFID transceiver.

B. RFID transceiver (in Transmit Mode) transmits radio signals via the RFID antenna, hence the antenna is emitting an energy field as shown

C. As the RFID tag moves through the emitted energy field it becomes energized.D. Technology within the RFID tag is able to use the energy to transmit pre-programmed information back

(e.g unique ID) to the RFID antenna E. The RFID transceiver (in Receive Mode) decodes the received information such as unique identification

code to form a set of raw data events.F. The RFID middleware receives the raw data events performs error handling and filtering capability to

make available processed business events.G. The business events are then routed and or made available to backend enterprise systems for

further processing.RFID Tag OverviewThere are three primary types of RFID tags:1. Active: Battery powered, has long range, used typically for tracking of high valued goods and high cost2. Passive:No internal power source - draws power from the radio waves, used typically for tracking pallet,

case and individual items and low cost3. Semi-Passive: Has internal battery for the integrated circuit, uses power from the radio waves for

transmission, medium range and costRFID Antenna OverviewOnce the frequency of operation/range is known the antenna best suited for the application can beselected. . Antennas come in all sorts of sizes to be mounted near/on: Dock door, Conveyor belts, Rollers,Buildings, Embedded with the reader.RFID ReaderA device used to communicate with RFID tags. The reader interfaces to one or more antennas, which emitradio waves and receive signals back from the tag. The reader decodes the RF signal to produce a rawunfiltered data event for further processing by RFID middleware.Note: Some vendors have combined theantenna, reader decoder and interface logic and middleware into a single combined unit for ease of integration.

Appendix B:RFIDArchitecture

RFID Simplified Architecture

Antenna

Reader MiddlewareRaw Event

RF Signal

Business RulesBusinessEvent

3 4

2

Tag1

Radio WavesAsset

1. EPCglobal2. International Standards Organisation (ISO)

RFID in the Supply Chain - A Balanced View 25

Radio waves enable RFID tags to be detected automatically. However, radio waves are easily deflected,absorbed, distorted or interfered with and the degree of degradation is dependent upon:

The rate at which the RFID tag passes the RFID reader has a direct correlation to the required RFIDfrequency needed to accurately detect the RFID tag. Frequencies in the UHF (ultra high frequency) bandare typically used to detect fast moving items on pallets. Whereas, lower frequencies in the HF (higherfrequency) band are used for penetration when items are near water. Dual band frequency RFIDtransceivers are used to cater for fast moving goods in environments that could have high water content.False reads will occur due to environmental conditions and business rules need to cater for theseexceptions throughout the supply chain.Finally existing environments could be RF noisy, for example rotating machinery, conveyors, motors,elevators causing the noise floor to rise and or interference to selected RFID tag frequencies. As part ofthe overall design phase, ensure consideration is given to RF noise and prepare for a RF site survey tomeasure the noise floor and in-channel and co-channel frequency interference.

Appendix C:Radio Frequency(RF) Basics

Key PointConduct RF site surveys,get out spectrum analysersto monitor and measurepotential interference. Ifnot conducted, then anincreased likelihood of poortag detection could occur.

The EPC global network comprises of five main elements:

Basic network description:The EPC, a number designed to identify a specific item in the supply chain, resides on the RFID tag, whichcommunicates its number to a reader. The reader then passes the number to a computer or localapplication system known as the object name service (ONS), which tells computer systems where tolocate information on the network about objects being tracked.The common language of the EPCglobal network, used to define data on physical objects, is physicalmarkup language (PML). The central nervous system of the EPCglobal network is Savant software, whichmanages and moves information.Electronic Product Code (EPC) Numbering SchemeThe electronic product code (EPC) forms a unique number that will reside on the RFID tag. The EPC is made of four key elements:

Appendix D:EPC Network*

EPC Class 1 (96 bit) Tag Content

• Frequency• Transmitting power• Environment surrounding the RFID reader and tag (metallic objects, water)

1. The electronic product code (EPC) 2. The ID system (EPC tags and readers) 3. Object name service (ONS)

4. Physical markup language (PML)5. EPC IS database

1. Header: Defines the overall number length of the EPC, type, version and length of the subsequent partitions

2. EPC Manager: Represents the company or entity responsible for managing the subsequent codes3. Object Class: Identifies the item, e.g the stock keeping unit (SKU) or consumer unit4. Serial Number: Provides a unique serial number for all items within a given class

* Global Commerce Initiative/IBM EPC Roadmap, November 2003

RFID in the Supply Chain - A Balanced View26

Object Naming Service (ONS)The ONS act as a directory and converts an Electronic Product Code (EPC) into a URL on the internet. TheURL is then used to look up an internet protocol (IP) address, where more detailed information about item,case or pallet can be found.

Physical Markup Language (PML)PML is an EPCglobal designed method of describing product in away that both humans and computerscan understand. PML is an eXtensible markup language (XML) vocabulary for describing physical objects,systems, processes and environments associated with the object. The main goal is to provide commonvocabulary to represent and distribute information related to RFID-enabled objects for business processesand applications, such as:

EPC Information Service (EPCIS)EPCIS is a computer system that manages and delivers a physical markup language (PML) description ofthe product to the information requesters. EPCIS supports queries such as:

Appendix D:EPC Network

EPC Information Services

EPC

EPC

EPC

IP Address

EPC Information Service

ONS Server

EPCISServer

RFID MiddlewareRFID ReaderRFID Tag

Behind the firewall

Class Description

0

I

II

III

IV

V

Read only passive identity tags

Write once passive identity tags

Passive tags with added functionality, eg. Memory or encryption

Semi-passive tags

Active tags

Essentially readers – can power class I, II, III tags as well as communicating with class IV and with each other

• Inventory management• Automated transactions

• Supply chain tracking and • Machine control

• Which path did this pallet with this EPC take?• Has this pallet been outside its allowable temperature control? If so, where did this occur?• What are the dimensions of this object?

The following lessons learnt have been captured from RFID projects focused on manufacturing consumerpackaged goods:Reading RF Signals• Electostatic discharge damages RFID tags, use preventative handling techniques i.e grounded

wrist straps • RF holes exist in the middle of pallets: Rotate pallets, use backup ASN’s, manifest• Establish quality programs to address field failure incidents directly with suppliers • Address the integration of existing labels with RFID tags • Depending upon the antenna selected, RFID tags may need to be rotated through the RF beam

to read successfully • False and no reads will occur due to environmental conditions, ensure business rules define

exception managementInfrastructure• Work closely with reader vendors to integrate the units with line operations, for both tag

application and tag reading • Collaborate with a variety of vendors to lower costs and avoid standardising on one solution until

all appropriate costs are achieved • Rely on wireless access to readers wherever possible • Conduct risk assessment to identify potential issues with RFID data access • Select a management infrastructure to cover readers, sensors and network elements Integration with Execution and Enterprise Systems• Push for integration at a standards and system level. Early solutions maintain RFID tag data as an

island separate from local control systems.• Insure that pallet-level product quantity data from standard warehouse management systems

match data in RFID tag systems• Coordinate key processes such as back flush and case-level pick and pack as they are critical touch

points for long term integration of tag data and current execution systems.

Appendix E:Lessons Learnt

Key PointIt is absolutely critical totest RFID within the liveenvironment because RFreflections, absorption, andother factors that arepresent cannot be preciselyduplicated in the lab.

RFID in the Supply Chain - A Balanced View 27

Acknowledgements

AMCOR Australasia

• Garry Noonan, General Manager Information Services

• Michael Cheyne, Strategic IT Business Analyst

Hewlett-Packard

• Ian Robertson, WW RFID Director

• Frank Lanza, Global Manufacturing RFID Consulting Manager

• Salil Pradhan, RFID Director, HP Labs

• Lucien Repellin, Global RFID Consulting Manager

• Glenn Exton, RFID Solution Manager

• Patrick Collins, Australian Manufacturing and Operations Manager

© 2004 Hewlett-Packard Development Company, L.P. The information contained herein issubject to change without notice. The only warranties for HP products and services are setforth in the express warranty statements accompanying such products and services.Nothing herein should be construed as constituting an additional warranty. HP shall not beliable for technical or editorial errors or omissions contained herein.

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