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EPC Advanced Business Aspects Training. Chapter 1 Introduction.

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Presentation on theme: "EPC Advanced Business Aspects Training. Chapter 1 Introduction."— Presentation transcript:

1 EPC Advanced Business Aspects Training

2 Chapter 1 Introduction

3 3 Chapter 1: Introduction Chapter 2: The Global Vision Chapter 3: Benefits of EPC/RFID Chapter 4: EPC/RFID Deployment Chapter 5: Examples of Applications Chapter 6: The Consumer Introduction

4 Chapter 2 The Global Vision

5 The Internet of Things The Internet (of information) expands to the real world: an Internet of Things emerges

6 The Internet of Things

7 Internet is an island Todays Internet is an island in the gulf of physical objects: only connected through human (manual) inputs

8 Benefits of the Internet of Things Status (capture & report) Diagnostics (troubleshoot) Upgrades (augment performance) Control/Automation (device cooperation) Profiling/Behaviour Tracking (performance) Replenishment/commerce (consumption) Location Mapping and Logistics (sales)

9 Over 100 trillion items per year 1 bio 2 bio 6.5 bio bio

10 The size of the future market

11 Available at

12 We only can manage what we can measure. Physical world UbiComp-Technologies Machine sensing Cost of data entry Punch card Keyboard Barcode Manual measuring Information systems & the Internet

13 No measures means potential business problems Average OOS level in retail industry: 8.3% Average shrinkage rate for supermarkets/grocery in US: 1.5% of sales Average deduction level for inaccurate invoices: 9.9% of annual invoiced sales in US Cost of unsellable food and grocery products in US: 1% of sales Product counterfeiting is estimated to account for between 5 and 7% of world trade Source: C. Tellkamp, E. Fleisch, Auto-ID Lab St. Gallen

14 Recent advances in miniaturization, sensor & communication technology, and new materials drive for a new computing paradigm Time Miniaturization and cost reduction (2) PCs (1) Mainframe (4) Smart Things (3) Mobiles / Smart Cards

15 The most widely deployed Technology: RFID

16 Leveraging RFID in retail Source: C. Tellkamp, HSG; Gartner

17 The opportunities are multi-fold: Search & Find Trust Linking Information

18 The correct medication to the right patient

19 Smart T-Shirts

20 Anti-counterfeiting solutions are under study

21 STOLPAN Project Retail Back-Office Solution Credit Card Middleware Product Info Loyalty program Project Goals: EPC and NFC compatible mobile phones EPC based product information EPC based product authentication NFC based loyalty programs EPC triggered mobile advertisement NFC based self check out and mobile payment

22 New items are tagged everyday…

23 … for various purposes

24 RFID enables new business models Source: Courtesy of F. Mattern, ETH Zürich Risk-based-pricing

25 Technology that reaches the consumer

26 26 Summary

27 27 Chapter 3 Benefits of EPC / RFID

28 What are standards?

29 Why do we have Standards? OK?

30 Benefits of using standards

31 Benefits of Global Standards Reduce costs Speeds customer acceptance Encourage innovation Reduce complexity

32 Global Standards & Competitive Advantage TDMA CDMA PCS GSM Standards allow technology providers to focus on innovation, not translation and intermediation

33 The role of EPCglobal standards Role of Global Standards Encourage Technology Innovation Foster competition Guaranteeing Interoperability Common Protocols for exchanging information

34 The benefits of EPCglobal standards Benefits of Global Standards Encourage Technology Innovation Lower Costs of products and implementation Foster competition Guaranteeing Interoperability Smooth integration with existing infrastructure Lower Cost of Changes Common Protocols for exchanging information

35 Overview of RFID benefits Fully automated data capture Analysis application Best business decisions RFID is a tool allowing Increased Visibility

36 RFID vs Barcodes Benefits of EPC / RFID over Bar Codes: AttributesEPC / RFIDBar Code Data transmissionElectromagnetic / WirelessOptical Reading capabilityNon-line of sightLine of sight Tag readingMultipleOne by one Reading speed500 / minutes80 / minutes Moving object reading YesNo Data modificationRead & writeWrite once, read many Data volume1 bit ~ 16 Mbytes< 100 bytes Access securityHighLittle but possible Anti-collisionPossibleNot possible

37 Complying with mandates

38 ALE and EPCIS provide increased visibility Reader Enterprise App Reader RR Edge Environment Data Center Environment pallet electric eye conveyor Filtering & Collection Palletizer Capture App ALE EPCIS Reader Protocol (LLRP) between the time the case crossed the two beams at location L, the tag X was read with temperature T at time T, the association of the following case tags to the following pallet tag was created at palletizer #3, to fulfill order #1234

39 Supply Chain Visibility

40 Inventory Visibility

41 Chain of Custody visibility

42 Visibility of maintenance

43 Visibility of counterfeit products

44 Visibility is only the starting point EPC Readings ALEEPCIS Trend Analysis Problem Identification Operational Performance Management of Solutions Providers

45 Benefits for the producer Visibility of Production Processes Quick reconciliation of shipments Just-in-time production and delivery

46 Benefits for the seller Reduced safety stocks Availability of products Reduced theft Speedy check outs Improved after sales

47 Customer satisfaction Where is my product? Your product was last seen in Store #23, at 10am Tuesday, during receiving Data flow

48 48 Summary

49 49 Back-up Slides

50 Calculating ROI for implementing EPC / RFID The checklist below summarizes some of the key financial items incurred in EPC / RFID implementations Understanding the Financial Aspects One time set up cost: RFID reader Middleware RFID printers Networking & cabling Enterprise system integration Consulting Training PC Recurring cost: RFID tags Maintenance cost for hardware & software Training BACKUP SLIDE

51 ROI Calculation Tools Available in the Market EPC Value Models Developed by Stanford University, Massachusetts Institute of Technology (MIT) and EPCglobal US, aimed to identify business issues and drivers where EPC / RFID is expected to have the greatest impact & quantify expected value of EPC / RFID implementation. URL: ncialPlanning/EPCValueModels/tabid/225/Default.aspx Understanding the Financial Aspects BACKUP SLIDE

52 ROI Calculation Tools Available in the Market (Cont) RFID Cost Tutorial Developed by EPCglobal Inc. is a reference tool for companies planning to make an investment in RFID technology. EPCglobal recommends that the cost items, phase structure and timeline presented herein be modified to suit the specific needs of the organization. URL: Understanding the Financial Aspects BACKUP SLIDE

53 Benefits from Future EPC / RFID Trends When RFID technology is commonly used in the future with sensing technologies, some potential use and benefits can be obtained: Temperature tracking Humidity monitoring Tilt indicator Accelerometer monitoring Pressure monitoring BACKUP SLIDE

54 54 Chapter 4 EPC / RFID DEPLOYMENT

55 55 Introduction

56 ©2008 GS1 56 Think of a major change Think of any major change that you have seen undertaken in a business…… A grand new machine installed…….. Launching a new product A new computer system Can you think of a major change that has taken place where you work ?

57 Preparing the change Changes need: Planning Organisation Collaboration Purpose Objectives Review

58 ©2008 GS1 58 Use the same common sense approach Dont leave your brain in the car park just because its radio !

59 59 Business Context

60 Getting The Business Context EPC and RFID implementation is not only about technical aspects EPC and RFID are tools for a business change in your operations.

61 Business processes Are Key

62 EPC / RFID can now impact your business processes PROCESSES ARE KEY

63 ©2008 GS1 Slide 63 Who Will Be Involved… Many departments will be involved so involve them early.

64 The Business Case

65 ©2008 GS1 Slide 65 The Business Case Financial Efficiencies Customer Service Customer Satisfaction Environment

66 ©2008 GS1 Slide 66 The Business Case – Common Benefits Financial Customer Service Efficiencie s Customer Satisfaction Environment

67 ©2008 GS1 Slide 67 The Business Case – Financial Benefits Lower costs Less inventory Less work Supply chain velocity

68 ©2008 GS1 Slide 68 The Business Case – Efficiency Benefits Better visibility Standard terms Common understanding between trading partners Lower shipping errors

69 ©2008 GS1 Slide 69 The Business Case – Customer Service Time to market Customer Response Time Returns processing

70 ©2008 GS1 Slide 70 Business Case – Customer Satisfaction Information Warranty provision Better service Anti-Counterfeiting

71 ©2008 GS1 Slide 71 The Business Case – The Environment Better Disposal Lower recycling costs Tracking of hazardous material

72 ©2008 GS1 Slide 72 The Business Case – Time Time is Money

73 ©2008 GS1 Slide 73 The Business Case - Summary

74 Deployment Objectives

75 ©2008 GS1 Slide 75 Deployment Objectives Set clear and specific objectives

76 ©2008 GS1 Slide 76 Sample Deployment Objectives - Processes

77 Situation Analysis

78 ©2008 GS1 Slide 78 Situation Analysis A key factor to successful RFID deployment is understanding what exists before the change

79 ©2008 GS1 Slide 79 Situation Analysis – Key Factors What are the current processes ? Where and how are they carried out ? Who executes them ? Where are items identified in the processes ? Why is identification necessary for those processes ? What materials move into and out of the processes ? What information is key about each item ?

80 ©2008 GS1 Slide 80 Situation Analysis – Common Tools Process Maps System Maps RACI Chart

81 ©2008 GS1 Slide 81 Situation Analysis – Radio Assessment Radio energy can be impacted by many things, so, assess your environment in this respect

82 ©2008 GS1 Slide 82 Situation Analysis – Radio Assessment

83 ©2008 GS1 Slide 83 Situation Analysis – Radio Assessment Reader module AntennaTagHost

84 Building the Team

85 ©2008 GS1 Slide 85 Building The Team - Principles Team-leader Key stakeholders Business knowledge within team Open attitude towards change

86 ©2008 GS1 Slide 86 Building The Team – Executive Sponsor Executive Sponsor: Sets the goals and direction for the program Enables you to get the resources and commitment Senior executive within the company Leads a function or division if possible

87 ©2008 GS1 Slide 87 Building The Team – The Core Team The Core Team: Stakeholders (right from start of program) Guides program according to agreed goals and objectives Acts as a link into the rest of the company

88 ©2008 GS1 Slide 88 Building The Team – Motivation Motivate beyond the initial enthusiasm Hold regular training sessions, team feedback reviews, team outings etc. Be frank about what is working and what isnt Seek the teams ideas on how to make progress. Reward exceptional individual contributions Reward achievement of major milestones by the whole team THANK YOU!

89 Requirements Gathering

90 ©2008 GS1 Slide 90 Requirements Gathering - KPIs Measurable Objective = Increase Average Revenue per Customer from 10 to 15 US Dollar by End Of Year 2008 KPI = Average Revenue per Customer

91 Planning

92 ©2008 GS1 Slide 92 Planning No battle plan survives contact with the enemy Count Helmut von Moltke the Elder 1800 – 1891

93 ©2008 GS1 Slide 93 Planning – Why Do It At All ? purpose and direction… what is expected and when…. checklist… communicate progress or issues… dependencies... what to do if things go wrong…

94 ©2008 GS1 Slide 94 Planning – Level Of Detail Not too much detail… For simple projects written list of activities is ok Larger projects require activities list, usually spreadsheet Large complex projects involving multiple teams, skills and functions over a longer period of time best planned using integrated project planning tool Not planning at all is planning to fail !

95 Process Integration

96 ©2008 GS1 Slide 96 Process Integration - The Basics Integrate new processes carefully in order to minimize disruption and risks

97 ©2008 GS1 Slide 97 Process Integration - How Document and understand the existing and new processes so as to minimize risks and misunderstandings

98 The Pilot

99 ©2008 GS1 Slide 99 The Pilot - Why Do It At All ?

100 ©2008 GS1 Slide 100 The Pilot - How - Start Small Small is beautiful – until you know it works !

101 ©2008 GS1 Slide 101 The Pilot - How - Start Small … and / or a few locations then expand if these trials are successful Select initially a few products …

102 ©2008 GS1 Slide 102 The Pilot - How - Predict & Compare For each part of the pilot: Describe the new processes and what to expect During the pilot: Monitor and record what actually happens

103 ©2008 GS1 Slide 103 The Pilot - How - RFID RFID equipment usually requires adjustment – this is normal ! You can ensure interoperability of tags and equipment by ensuring that they are certified

104 ©2008 GS1 Slide 104 The Pilot - Completion Show the Executive Sponsor and the Core Team the pilots results and get agreement to deploy.

105 Deployment

106 ©2008 GS1 Slide 106 Deployment - Providing Support Full deployment = full risk !

107 ©2008 GS1 Slide 107 Deployment - Providing Support You should ensure adequate level of support, either remotely or locally

108 Measuring Success

109 ©2008 GS1 Slide 109 Measuring Success Project success comes in many forms

110 ©2008 GS1 Slide 110 Rewarding Success Dont forget to reward success

111 Regulatory Considerations

112 ©2008 GS1 Slide 112 Regulatory Considerations Ask your solution provider to ensure that your equipment is operating within the regulations for your country

113 Chapter 5 Examples of applications

114 ©2008 GS1 Slide 114 Introduction Some applications of EPC/RFID Asset Management (Nortura) Track and Trace in the Book industry (Byblos) Outbound / Inbound in the textile industry (Lemmi) RFID in healthcare (Hospital Speising) Cold Chain (Nestlé) Baggage tracking (Hong Kong Airport) Visibility in complex retail chain – (Wal*Mart) Optimising manufacturing processes (Griva S.p.A) Recommended exercise

115 ©2008 GS1 Slide 115 Asset Management: Nortura Norwegian company Meat manufacturer Employs people Annual sales 2 billion Organized as a cooperative owned by approximately 30,300 farmers 41 municipalities in 18 counties Problem: Today nobody knows where, which and how many Returnable Transport Items (RTI) are spead along the supply chain Source: Nortura

116 ©2008 GS1 Slide 116 Benefits Automatical RTI lifecycle control Documentation of RTI lifecycle (cold, freezing cold, washing, etc) Real time inventory Prediction of RTI need Process management project RFID tag inside crates with GRAI 73 RFID readers Employee ID coupled with GS1 GRAI Each person gets performance feedback ROI: 3 months Source: Nortura Asset Management: Nortura

117 ©2008 GS1 Slide 117 Track & Trace in the book industry - Byblos Portuguese company Bookstore 50,000-square-foot store Receiving more than 200,000 products per week Source: Byblos Problem: Problems for localising products resulting in high costs of inventory and poor customer service

118 ©2008 GS1 Slide 118 Solution 250,000 books, games and videos tagged 40 RFID-enabled kiosks 13 incorporates RFID security gates 14 RFID point-of-sale (POS) reading stations 10 RFID Handhelds Source: Byblos Track & Trace in the book industry - Byblos

119 ©2008 GS1 Slide 119 Benefit 30% less stock Possibility to handle more customer at POS Faster localisation of items Faster reposition and re- ordering of sold items Possibility of daily and full inventory Source: Byblos Track & Trace in the book industry - Byblos

120 ©2008 GS1 Slide 120 Outbound / Inbound in the textile industry - Lemmi German SME company A leading childrens wear manufacturer Founded in 1959 Employs around 50 people Produces over 1 million garments per year Problem: Poor stock turn over Source: Lemmi

121 ©2008 GS1 Slide 121 Solution 100 % of merchandise is tagged Integrated Solution: RFID fully integrated into ERP Benefits Increase efficiency on all steps of SC Increase quality of deliveries from production to customers Precise information on goods in transit Strengthen relationships with customers Easy to use for all employees Source: Lemmi Outbound / Inbound in the textile industry - Lemmi

122 ©2008 GS1 Slide 122 Payback Stock turnover before tagging: 5,000 to 10,000 items per day Stock turnover after tagging: 20,000 items per day Increase of 250%-300% in receipt and shipment of goods Source: Lemmi Outbound / Inbound in the textile industry - Lemmi

123 ©2008 GS1 Slide 123 RFID in healthcare - Hospital Speising Austrian company Orthopädisches Spital Speising is part of Vinzenz groupe Total number of beds: 2221 Hospital patients per year: Workers in the hospitals: 4535 Introduction of RFID in instrument cycle of a hospital

124 ©2008 GS1 Slide 124 Benefits Detection of specific medical equipment and inventory within the hospital Better process transparency Automated documentation Simplification of logistics operations Automation of ordering Quality improvement in the process chain Risk reduction in the area of application Reduce storage costs Increase the cost-efficiency Patient safety RFID in healthcare - Hospital Speising

125 ©2008 GS1 Slide 125 Cold Chain - Nestlé World's largest food company: 2007 sales – $98 billion 130 operating Markets 450+ factories in 87 countries 250,000 employees 130+ main brands

126 Ice Cream does not like heat shocks

127 Objectives of the trail 2007 Evaluate technical feasibility of a temperature monitoring solution along the entire cold chain Evaluate the real advantages compared to actual situation, for all organization areas involved. During kick-off meeting in June discovered other interesting issues.... Assess solution for several business needs: - Freezer traceability - Better support on freezer maintenance issues - Service to big customers (e.g. theme parks): efficient & automatic HACCP freezer performance warranty for a better support on sales activities - Systems integration requirements

128 Installed Sensors - Distribution Delivery Truck

129 In Freezer View Simple to install – 5 minutes No maintenance

130 30° External -18°C in Cold Store -10°C delivery First delivery at -23°C Last delivery at -10°C !!! Problem with temp probe and compressor on the truck Secondary Distribution External temperature Cold store temperature Truck temperature

131 Example: Store Freezer Activity -12°C constant Too warm Continuous defrosting Ice cream quality will be a problem Freezer well regulated at - 22°C Too cold Different from day & night?

132 Key Benefits Improved visibility of the cold-chain: Better understanding of: Freezer performance & management Temperature cycles – warning signs Improved quality control of products Quality & Safety Improved product taste / experience Lower 'bad goods' & insurance write offs Potential energy savings Added value services to Distributor Production (cold store) Primary DC Depot / Distributors Restaurant, Bar, POS Primary transport Deliveries Consumer

133 Some results and conclusions At the beginning we talked about benefits in terms of: Legal duty ensure quality in the food chain Quality of product and brand image on market Cost of bad goods Insurance costs Today we also talk about: Better management of installed freezeer : traceability, sobstitution, maintenance, allocation, energy consumption Marketing & sales support: service to customers (HACCP due activity, freezer performance, maintenance guide) allocation and match model/version freezer-location-invoicing Support for research & development: thermal history of singles batches, development of product Better efficiency on quality control: coverage, efficiency & best practice Significant opportunities for added value

134 ©2008 GS1 134 Baggage tracking – Hong Kong Airport One of the busiest airport in the world Passenger: 350 million per annum Air cargo: 3 million tons per annum Named the worlds best airport by Sky Trax (UK) in Apr 2004 & received special recognition award from IATA ~ 40% of luggage handled comes from transfer flights Major hub to/ from mainland & volume is expected to be increasing

135 ©2008 GS1 135 Issues Currency bar code system is 85-95% read rate (Manually handling failures) Remove & check all Unit Loading Device on the plane to identify baggage Security measurement Velocity and Baggage handling accuracy Solutions Deploy RFID technology on extensive baggage-handling facilities alongside the bar code system to bring up visibility, improve accuracy and efficiency, step up security measurement Baggage tracking – Hong Kong Airport

136 ©2008 GS1 136 Benefits Improve customer satisfaction Improve security Cut operating costs Baggage tracking – Hong Kong Airport

137 ©2008 GS1 137 Visibility in complex retail chain - Wal*Mart Walmart operates retail stores worldwide in various format Products allocated through 90 DCs and/or direct from manufacturer Total sales 2004 – US$ 256.3B Requested EPC RFID tagging by Jan 2005 to increase supply chain visibility and eliminate many manual process. Estimated annual saving is ~ 3.3% of sales (i.e. ~ US$ 8B)

138 ©2008 GS1 138 Visibility in complex retail chain - Wal*Mart Issues Without merchandise visibility along this huge supply chain may lead to Out Of Stocks, shrinkage, and operation inefficiency that could ultimately reduce competitive advantages Solutions Mandated suppliers to affix EPC compliance RFID tags to cases and pallets before shipping to Wal- marts DCs. The tags allow Wal-mart utilize automatic tracking on product movement that will provide product visibility without additional human intervention.

139 ©2008 GS1 139 Visibility in complex retail chain - Wal*Mart Benefits Eliminated many manual processes in the area of I) receiving, ii) product movement in warehouse and DC, iii) shipping to stores, and iv) paying suppliers. Reduce inventory shrinkage and out-of-stock situations.

140 ©2008 GS1 140 Visibility in complex retail chain - Wal*Mart Benefits

141 ©2008 GS1 141 Optimising manufacturing processes – Griva S.p.A Italian company Founded 1955 A leading high-volume textile manufacturer Employs 70 people Annual sales 14 million Markets – 60% domestic, 40% foreign 300,000 rolls of fabric per year Reliance on automated manufacturing systems with integrated logistics An improvement in productivity was critical to our ongoing competitiveness. Until recently, we could not accurately control the contents of the roll Gualtiero Casalegno – President, CEO and owner

142 ©2008 GS1 142 Fabric is woven and then rolled onto cardboard tubes Alien Gen 2 EPC compliant readers and tags EPCglobal numbering system Compliant with European (ETSI) regulations Strategic read points from production to warehouse Harsh manufacturing environment High temperatures Water and high humidity Harsh chemical agents for dying Griva needed a robust system with complete fabric roll traceability without being intrusive to the production process Claudio Bertolo – Marketing Manager, Simet Optimising manufacturing processes – Griva S.p.A

143 ©2008 GS1 143 Visibility Tracking of textile rolls through production 15 separate dying and coating stations Improved accuracy in production treatments Accurate information to customers Fabric can be sorted automatically Readers at checkpoints supports decision making by systems and operators Cost effectiveness Reduced manual effort in: determining most cost effective transportation options Building customized shipping boxes Identification of products Optimising manufacturing processes – Griva S.p.A

144 ©2008 GS1 144 Production velocity Before – 400 rolls per day (2 x 10hour shifts) After – 600 rolls per day (2 x 8 hour shifts) From 20 rolls/hour to 37.5 rolls/hour…….+87.5% ROI 30% after 9 months Optimising manufacturing processes – Griva S.p.A

145 Recommended exercise GROUPS (4 to 8 persons) Minutes Benefits of EPC / RFID Major Challenges of EPC / RFID implementation Proposed applications: Inventory control Outbound / Inbound Smart Shelf Track and Trace Anti-counterfeiting Supply Chain Visibility

146 146 Summary

147 147 Chapter 6 The Consumer

148 Responsible UseAwareness Consumer Acceptance

149 Awareness Consumer Awareness Guidance available at

150 Responsible use Basic principles on Consumer confidence can be found at: Consumer Guidelines for EPC on Consumer Confidence ICC Privacy Guidelines on RFID Centre for Democracy and Technology

151 Addressing Consumer Benefits

152 Consumer Benefits – Patient Safety Patient Safety - Stay Healthy New born identified with RFID bracelets preventing mix up Blood products are tracked and match with the patient Id

153 Consumer Benefits – Food Safety Food Safety – Eat well RFID helps monitoring of freshness and quality of products RFID enables controls of authenticity and origin

154 Consumer Benefits – Quality of Life Quality of Life – Get what you want RFID enhances the shopping experience RFID improves the postal service and speeds up the delivery

155 Consumer Benefits – Quality of Life Quality of Life – Feel safe RFID helps ensure your airplane is properly maintained and does not contain counterfeit spare parts. RFID helps you protecting your valuables from theft

156 Consumer Benefits – Quality of Life Quality of Life – Work better RFID saves us time at toll booths RFID protects workers in, contact with Dangerous Environments

157 Consumer Benefits – Environment protection Environment protection – Protecting Nature RFID allows for better and easier recycling RFID protects endangered species

158 Practical Recommendations

159 Data Protection Overview

160 Why is data protection law important?

161 General Data Protection Directive


163 Some important obligations Data Controller MUST: Ensure accurate data is collected and only what is strictly necessary Ensure the data is processed for legitimate purposes Protect the integrity of the data from unauthorised access Notify to the data protection authority

164 Some important obligations Data Controller MUST: Obtain the consent from the person Or show the processing of the personal data is needed to perform the contract Or show the data is needed to protect the vital interests of the person

165 E-Privacy Directive

166 Data Protection questions on RFID

167 167 Summary

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