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
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