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Leveraging RFID-Enhanced Networks for Ocean Cargo Visibility and Security: Vic Verma Chairman, President and CEO Savi Technology AIDC 100 "Truth in Technologies.

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Presentation on theme: "Leveraging RFID-Enhanced Networks for Ocean Cargo Visibility and Security: Vic Verma Chairman, President and CEO Savi Technology AIDC 100 "Truth in Technologies."— Presentation transcript:

1 Leveraging RFID-Enhanced Networks for Ocean Cargo Visibility and Security: Vic Verma Chairman, President and CEO Savi Technology AIDC 100 "Truth in Technologies 2005: Supply Chain RFID"

2 Challenges to Supply Chain Efficiency Supply Chains Have Become Increasingly Complex Increasing Outsourced Off Shore Manufacturing 20+ Entities Participate In The End-to-end Movement Of An Ocean Container Shippers Vary Manufacturers & Service Providers For Best Price & Service Carriers Vary Schedules And Routes For Maximum Efficiency Security Issues Threaten Supply Chain Disruption Potential For Weapon Of Mass Destruction Smuggled In Ocean Containers Subsequent Impact To Global Commerce Would Be Significant Anti-terrorism Regulations Increase Complexity And Costs U.S. Initiatives 24 Hour Manifest Rule, Seal Checks International Initiatives ISPS codes for ship and facility security World Customs Organization

3 Recent Drivers Accelerating Change US CBP expected to pass verification rule rollout to industry early next year –Driving collaboration among carriers, shippers, terminal operators and tech companies to finalize e-seal standards Wal-Mart and DoD compliance continuing to next wave of suppliers –Driving companies to look for ways to gain value in international logistics operations –Source tagging growing as mechanism to comply Bonner recent comments on Greenlane –December 31 st goal to define benefits of use of “smart containers” Standardization among allied militaries for global container tracking IBM/Maersk joint initiative

4 Ocean Cargo Supply Chain Executive Priorities Reducing Inventory and Assuring Container Security are the most important issues supply chain executives are managing (n = 24) Source: A.T. Kearney interviews 5 Most Important 1 Not Important 3 Moderately Important 2.1 2.2 2.4 2.7 2.8 3.0 3.1 3.3 3.5 3.7 3.9 4.0 Complying with RFID Mandates Reducing Insurance Costs Reducing Shrink Increasing Mfg Uptime Assigning Liability Locating Lost Containers Reducing Labor/Fees Managing POFR Preventing Lost Containers Reducing Stock Outs Reducing Lead Time Var. Reducing Inventory Assuring Container Security

5 Savi Networks Commercial Launch HPH and Savi Launched Savi Networks in April –service for container tracking and security In August, 0 false tamper field trial of 3rd generation RFID sensor tag on Mitsui containers Officially launched SaviTrak service last week –Consumer goods manufacturer operational program –Full source tagging and nested visibility solution

6 Business Model Savi Networks is a utility service –Installs and operates a shared network infrastructure –Operates the service to collect data, monitor the network and provide information to customers Savi Networks provides integrated hardware, software, services, and tags necessary for users to connect –Manufacturing and consolidation facilities that originate cargo –Distribution centers receiving cargo –Enabling nested visibility and source tagging Savi Networks provides data to carriers, shippers and/or other customers –Hosted view of the information –Integration to backend systems –Per transaction or subscription basis

7 Features Solution Enables: –Continuous supply chain performance improvement –Exception management and Supply chain analytics –Tamper alerts and audit trails for loss prevention and risk management –Data availability and accuracy improvements –Passive tag reads for manifest creation and “nested visibility” –Enables retail RFID mandate compliance as source –Automated ASN creation and other documentation –Automated monitoring and alerting during import transport segments –Electronic securing by authenticated users and chain of custody controls –Chain of custody control at key hand offs in the supply chain Anticipated future capability: –Satisfy government requirements for “Greenlane” treatment of imports –E-Seal verification once standard is completed

8 Device-Level Solution Connectivity to users on the ground, verifying people, automating processes, validating security, capturing origin and destination physical location and status

9 Chain of custody control through confirmation of physical movement and container status at process points like the port crane operations Reader Solution

10 Nested Visibility: Supports Source Tagging GPS Integrated, global, multi-modal Hardware Software

11 Container Movement vehicle Unit Load Transport unit PackagingItem Savi Software Supports Multiple AIDC Technologies Zebra Symbol Intermec Phillips Intermec Matrics Alien TI SAMSys Thing Magic Qualcomm @Road PAR Wherify Barcode GPS Passive RFID Gen 2 ISO 18000-6 SmartChain Software ISO 18000-7 Active RFID

12 Networked Software Networked software application provides users specific data security, alert and reporting capability for exception management, audit and analytics information, and operating system integration (ERP, TOS, TMS)

13 Savi Networks Hosted Software Savi Networks is Implementing an ISO Standard RFID Network Including a Hosted Application to Provide Global Visibility To and Manage The Security of Ocean Cargo Containers Managed Services

14 Savi Networks Hosted Software Shippers Implement Compatible RFID Infrastructure At Supply Chain End Points, Connecting To Savi Networks Hosted Software Extending The Network Across The Global Supply Chain Managed Services

15 Savi Networks Hosted Software 6 Web Based Services Data Services Alert Services Savi Networks Will Provide Visibility and Security Transaction Priced Services To Shippers Through Web Portal Alert Services Direct Enterprise Data Integration Managed Services

16 Scan Burn & Apply Verify Customer Example: Mitsui and Large Japanese Consumer Products Manufacturer Factory Border Crossing Gate-In Vessel Quay-side Gate-Out Vessel Quay-side Receiving DC Shipping Receiving Storeroom Floor POS StorePort of LoadingPort of Unloading Fully compliant EPC generation, labeling, & verification Nesting of floor-loaded Cases into the Container Automated ASN generation & dissemination Seal Container Location, Environmental, and Security Status monitoring of the Container and its contents throughout the journey Ability to graphically monitor the location of the goods as they move from point of stuffing through the point of unstuffing Ability to automatically manage by exception Factory #1 Dongguan, China Factory #2 Guangdong, China Port of Yantian China Port of LA/LB USA Fontana, CA USA

17 Key Findings Approximately 95% of the total benefit derived from the offering savings are driven by four factors —Reduced inventory carrying costs —Reduced out-of-stocks —Reduced lead time variance —Increased manufacturing uptime Reducing labor and fees (3%), increasing security (2%), preventing lost containers (1%), and reducing insurance costs (0%) combined for 6% of the total benefit Note:(1) Reducing insurance costs showed zero benefits or the benefits could not be provided, according to the interviewees Source: A.T. Kearney Interviews; A.T. Kearney analysis Reduce Out- of-Stocks 30% Increase Mfg. Uptime 16% Reduce Inventory 31% Other 6% Reduce Lead Time Variance 17% Supply chain executives estimated the total average benefit per container from Savi Networks Solution is approximately $1,150 (1) Value to Shippers

18 Leveraging RFID-Enhanced Networks for Ocean Cargo Visibility and Security: Vic Verma Chairman, President and CEO Savi Technology AIDC 100 "Truth in Technologies 2005: Supply Chain RFID"

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