6 -RFID

Radio Frequency

Identification (RFID)


Global Supply Chain Network
Effect

South America

Australia

Mid East

China

South East

Asia

North America

Europe

Driving Force of RFID


Manufacturers & suppliers face in complying with
retailers’ mandates (e.g. Wal
-
Mart) that all pallets
and cases shipped must be equipped with RFID
tags using Electronic
-
Product
-
Code (EPC) standard


Costs of RFID products are coming down


Evolving global standards


Improving technology


Increasing success stories

Is RFID Ready for Mass Adoption?

Costs $

Enterprise

DC

Enterprise

Enterprise

Supplier

Store

DC

Supplier

DC

Manufacturer

Closed Loop

Tightly Coupled

Open Solutions

To Date….

Now Evolving….

Adoption by Applications

Level of Tagging / Time

Cumulative Value

Supply

Chain

Management

Consumer

Assets

•

Customer insights

•

Shelf availability

•

Self checkout

•

Innovative payment mechanism

•

Return management

•

Maintenance

•

Quality control

•

Distribution productivity

•

Tracking and tracing

•

Inventory management

•

Asset management

•

Shelf maintenance

•

High value goods management

•

Tracking and tracing

•

Inventory management

•

Asset management

Supply
-
chain Adoption

•

No embracement or use of RFID technology

•

‘Wait and see’ approach

•

Unconvinced of internal benefits (supplier
-
enabled benefits syndrome)

•

Limited use of RFID for customer compliance purpose (i.e. Wal
-
Mart)

•

RFID ‘check
-
box’
–

affix tag as goods move out the door

•

Initial internalization of RFID

•

Low risk/limited use for non
-
core product


tracking at the DC

•

Internal embracement of RFID across DCs

•

SKU tracking throughout distribution channel


as well as manufacturing supply chain

•

Custom RFID applications

•

High value assets

•

Item/shelf
-
level tagging

•

Ready for Customer
-
chain take
-
off

RFID Maturity/Value

Adoption Approach

Deferment

Compliance

Ancillary

Tracking

Supply Chain

Visibility

Supply Chain

Intelligence

Emerging Market of

Electronic Product Code

(EPC)

Item tagging








Trade unit tagging








Reusable

Asset

tagging








Field tests








Market Trend

0
10
20
30
40
50
2002
2003
2004
2005
2006
2007
2008
2009
Number of
CPG items
tagged
(billions)

Source: Forrester

RFID Tagged objects in consumer packaged goods

Basic Components of RFID

RFID Tags

(or Transponders)

(or Interrogator)

RFID Tags


Tags can be attached to

almost anything:

–
pallets or cases of product

–
vehicles

–
company assets or personnel

–
items such as apparel,

luggage, laundry

–
people, livestock, or pets

–
high value electronics such

as computers, TVs, camcorders



Three Basic Types:

–
Active


Battery powered memory, radio & circuitry


Long Read Range (300 feet)


$$$

–
Active Backscatter (Semi
-
active)


Reader activates tag,

but battery powers memory

and circuitry


Medium Read Range (10
-

50 feet)


$$

Are All Tags The Same?



Three Basic Types:

–
Passive Backscatter


Reader powered


Shorter Read Range (4 inches
-

18 feet
)


$

Are All Tags The Same?

RFID Tag Assembly (Passive)

Chip

Insert

Tag

One

Small number

Application

Specific

Multiple Tag Antenna Shapes and Encapsulations

Cover Several Frequencies and Application Environments

Tag Products

Reusable Pallet Container Tag

Generic Plastic Container Tag

Plastic Leader
Board Tags

Wooden Pallet

with RFID

Plastic Leader

Boards


Windshield Sticker Tag

Metal Mount Dipole Tag

Smart Label

Reader Products


Network Readers

OEM Reader Boards


Serial Readers

OEM Reader Boards



Peripheral Controllers



PC Card Readers


RFID Enabled Label
Printers




Portable Readers



Wireless Integrated

Handheld Reader


Applications in Logistics


Tracking entire pallets from manufacturing

to shipping


Writing route instructions electronically

to tag in finished goods


Reading automatically at distribution center


Changing the tag information at retail

–
Including pricing information, receipt date, inventory,
and theft prevention


Automatic identification and data collection (AIDC)
of any item or asset

Throughput Increases /

Labor Costs Decreases

Manufacturing

In today’s typical WMS, up to 60% of labor

resources are allocated to shipping validation:

stop, locate bar code, & physically scan each label

RFID instantly identifies multiple items as

they pass through dock door, in bulk

A
utomatically create your shipping manifest
--

unattended data collection for shipping validation

Typical RFID Application

in a Distribution Center

Receiving Process

Unloading

Staging

Palletization

Generate RFID Tag for
each Pallet of Goods

Label the Pallet

Staging for Putaway

Putaway Process

Update Inventory

Transfer to
Storage Area

Automatically
Identify Goods by
RFID Reader Portal

Putaway

Confirm
Putaway
Location

Picking and Packing Processes

Packing and
Labeling Cases
with RFID Tag

Staging

Palletization

Automatically Generate
Pallet
-
Level RFID Tag

Wrapping

Picking

Shipping and Loading Processes

Update Inventory

Transfer to
Loading Dock

Automatically
Identify Shipping of
Goods by RFID
Reader Portal

Automatically
Identify Loading of
Goods by RFID
Reader Portal

Staging for
Shipping

Validate and
Confirm Loading

Constraints and Challenges

Selection of Appropriate RFID Tags

Material of Goods & Containers

Accuracy on
Single Item

Accuracy on
Manual Scanning

Accuracy on
Multiple Items

Accuracy on
Speed

RFID is fundamentally about Applications

What if the dream comes true?

Radio Frequency Identification

RFID

What is RFID


First used

–
During WWII in 1940’s for communications within Allies


Basic theory

–
One side send of a Radio signal, another side will reply


Function:

–
To see who is on the same side in the war


New RFID systems

–
Improvements in sizes, functions, applications, intelligence, etc


RFID Hardware


Interrogator

–
Reader


Antenna


Transponder

–
Tag


Encoder

–
Usually Printer


Peripherals

–
Server, coaxial cable LAN cable, hub, etc

RFID Hardware


Applications

–
Read range

–
Intelligence


Frequency

–
LF, HF, UHF, etc

–
Geographical


Protocol

–
EPC, ISO

RFID Hardware


Read range

–
How far do you need?


LF: shortest


HF: moderate


UHF: longest

–
Passive: shorter

–
Active : Longer


Intelligence

–
How much data do you need?


LF: least


UHF Active: most

Frequency spectrum
-

VHF


VLF:


3kHz to 30kHz


Chosen frequency for RFID: 125kHz


Largest (3
-
dimensional)


Cost:: 2 to 20USD


Read range: inches


Characteristics: Good penetration for almost all materials


Application: Animal tracing

Frequency spectrum
-

UHF


HF:


3 to 3MHz


Chosen frequency for RFID: 13.56MHz


Large (card
-
size)


Cost:: 0.5 to 2USD


Read range: up to 3 feet


Characteristics: Poor read for metal


Application: Smart card, document tracing


Frequency spectrum
–

UHF Passive


UHF Passive
:

–
300MHz to 3000MHz

–
Chosen frequency for RFID: 865 to 928MHz


Small ( 1” x 2” )


Cost:: 0.15 to 0.5USD


Read range: 3 to 5 meters


Characteristics: Poor read for metal & liquid


Application: Supply Chain Management, Logistics,
Retail

Frequency spectrum
–

UHF Active

UHF Active


Large (thick card)


Cost: Above 5 USD


Read range: varies (100 meters)


Applications: Asset Management

Frequency spectrum
-

geographical

–
Europe


868 to 870MHz

–
US


902 to 928MHz

–
Singapore


866 to 869MHz, 923 to 925MHz

–
Hong Kong


865 to 868MHz, 920 to 925 MHz

–
China & India


Unknown !

How does it work?


Passive system


System instruct printer to print and encode data


Printer check chip in the tag, encode chip, print information
on the front side of the label


Affix label on the item


Reader provide instruction and power to the antenna to
continuously release radio frequency in the area


When frequency hit a tag, antenna on the tag generate
power from frequency and activate the chip.

How does it work?
(cont’d)


Chip will release identity (i.e. information encoded) through the
antenna, which will then send the identity back to the antenna
connected to the reader


Antenna transmit signal back to the reader through the coaxial
cable


Reader will filter data according to preset criteria and then pass
data back the server for further filtering


System will store data in database.

General Environment


Supply

–
EPC GEN2 rectified November 2004

–
All equipment now standardized

–
Cost of equipment and consumables greatly reduced


Demand

–
WalMart, BestBuy & DoD mandate

–
Mark & Spenser, Maersk, etc


Experience

–
Proven benefits from existing RFID users

Your own need


Is RFID what you need?

–
Every organization has a room to improve can
that be achieved by RFID


Look at your organization

–
Mandate received?

–
Is there a problem? Flaw?

–
Where is the room to improve?


A Sample RFID Checklist
(Manufacturing)


Compliance to mandate received?

–
If YES:


Minimize cost?

–
Minimal installation?


Take it as an opportunity to improve competitiveness?

–
Lowering cost?

–
Improving productivity?

–
If No:


Which figure do I want to improve in my book?

–
Do I have the detail figures for each step

–
If No, then find the figures first!

A Sample RFID Checklist
(Manufacturing)


Internal Reasons?

–
Material Cost?

–
Visibility?

–
Productivity

–
Competitiveness?

A Sample RFID Checklist
(Manufacturing)


Operation Flow

–
Raw material


How are raw materials purchased?


How are raw materials received?


How are raw materials stored?


Who determine how much raw materials to be used for production?


What is the procedure if more raw materials are needed for
production?


How are the left
-
over raw materials treated?


How to track and trace how much raw materials are left?

A Sample RFID Checklist
(Manufacturing)


Operation Flow

–
Stock taking


How often is tock taking?


How many people involved?


How long will it take?


Are the numbers on the book clear and traceable?


Are the numbers on the book compatible to real stock?


What actions taken to recover the difference?

A Sample RFID Checklist
(Manufacturing)


Operation Flow

–
Storage & Delivery


Who allocate where to store?


Who check if items are stored at appropriate locations?


How long each item will sit on the rack? From when until
when?


How to know if First
-
In
-
First
-
Out is followed?


How to know if right item are delivered?


What to do when wrong items are delivered?

A Sample RFID Checklist
(Manufacturing)


Management

–
Plans?


To lower cost


To increase productivity

–
Monitoring?


How to monitor implementation by management?


Detail day
-
to
-
day?


Real
-
time figures? Or figures prepared by front
-
line?

Document tracking
-

Benefits

–
Automatic recording

–
Real time physical location from searching

–
Minimize discrepancy between staffs and/or
with system

–
Minimize human input error

Document tracking
-

concerns

–
Size of document

–
Thickness of document

–
Sizes of area

–
How detail is the location section

Middleware
-

1


RFID Reader Management

–
Configure all reader from system

–
Real
-
time monitoring


Data Capturing

–
User
-
defined data capturing criteria

–
Capture different sets of data for different
purposes

Middleware
-

2

Raw Data Filtering

–
Avoid useless of raw data from entering the
business network

–
Filter all dirty data from entering the network

Middleware
-

3


Data Routing


–
Allows RFID systems to integrate with
different business solutions such as WMS,
ERP system, etc

–
Different users can see different information
via different applications

Middleware
-

4


Report Generating

–
Generates reports for different users

–
Can be implemented as a standalone
application program to provide real time
information; thus, no systems integration is
required.

International Application


Korea: Asiana Airline

–
Airline

–
Baggage tracking


Singapore: National Library

–
Library

–
9 million items tagged, save $50million a year

–
Books location, check
-
in and check
-
out


Singapore: Alexandra Hospital & National University Hospital

–
Hospital

–
Reduce queuing time and improve utilisation

International Application


Taiwan: Hsinchu Ton Yen Genral Hospitals

–
Hospital

–
Track staff and patients alleged and confirmed with
contagious disease, such as SARS


US: Wal
-
Mart

–
Mandate 100, 137 joined

–
Impose penalty with warning

International Application


US: Department of Defense

–
Military

–
Supplies including clue


Others: DHL

–
Shipping process 12 times faster

–
Inventory process 60 times faster

–
Direct routing form China to US distribution center

International Application


Others: Maersk

–
Producing containers in Tsing Dao

–
Pilot with 2 customers in Asia

IBM and Maersk
-

joint project on RFID


taking the concept of RFID tags to the world's ocean
shipping lanes and ports.


The aim of the project

–
is to give shipping companies information on
containers' movements in real time. Access to that
information will allow companies to handle logistics
more efficiently and improve security.

IBM and Maersk
-

joint project on RFID


Benefits

–
better information will let shippers reroute cargo to
different warehouses based on the inventory.


On the security side

–
the system is equipped with sensors that create a
record of a container's movements, such as when a
door is opened.

IBM and Maersk
-

joint project on RFID


The heart of the system

–
a cigar
-
box
-
sized computer that slips into the door
of a container. There are eight sensors attached,
which measure things such as temperature,
altitude and light.

–
An antenna on the top of the container
communicates data with wireless networks
-

Zigbee for short
-
range, GPRS
-
based mobile data
services, or Iridium's low
-
flying satellite network.


The Tamper Resistant Embedded Controllers
(Trecs) differs from many RFID tags
.

IBM and Maersk
-

joint project on RFID


Trecs

–
more powerful and able to send and
receive data independently.

–
Access to the system is secured via a
smart
-
card authentication system, and
data transmissions can use encryption.

–
The devices can be programmed to send
an alert if a container is opened.


Track
-
and
-
trace technology
–

in shipping market


Monitoring cargo container shipments

–
expected to reduce theft, which along with diverting
products to another port without prior approval from
the supplier, accounts for between 1% and 3% of
goods shipped worldwide.

–
The container's inventory content is typically valued at
between $500,000 and $5 million, depending on the
goods.


Track
-
and
-
trace technology
–

in shipping market


Another problem is product counterfeiting.

–
It accounts for between 5% and 10% of all global
trade, or roughly $350 billion.

–
It estimates U.S. cargo theft costs companies $1
billion monthly, with most occurring in the
transportation process of getting goods from one
location to another, which isn't limited to cargo
containers.

Track
-
and
-
trace technology
–

in shipping market


One of the world's largest shipping concerns is preparing
to participate in a track
-
and
-
trace, radio frequency
identification technology supply chain pilot in Asia with
EPCglobal Inc., a non
-
profit organization spearheading
RFID adoption.


The move underscores an unprecedented wave of RFID
adoption in the maritime industry.

EPCglobal


is a joint venture between GS1 (formerly known as EAN
International) and GS1 US™ (formerly the Uniform Code
Council, Inc.).


It is an organization set up to achieve world
-
wide
adoption and standardization of Electronic Product Code
(EPC) technology in an ethical and responsible way.


The main focus of the group is to create both a world
-
wide standard for RFID and the use of the Internet to
share data via the EPCglobal Network.

EPCglobal


The company is preparing its warehouses globally by
installing networks, readers and infrastructure to manage
RFID shipments for customers delivering goods to
companies such as Wal
-
Mart Stores Inc. in the United
States and Metro Group AG in Germany.


On average ships today carry about 3,000 containers, up
from 200 million in 2002. About 100,000 documents are
required to ship that cargo. RFID could reduce some of
the paperwork with automatic data collection from
readers and tags.


Failure of RFID


Refer to the attached text