1. doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobalSlide 1 Project: IEEE P802.15 Working Group for Wireless Personal Area Networks (WPANs) Submission Title: [EPCglobal Raison d’Être ] Date Submitted: [10 March 2009] Source: [Ian Robertson] Company [GS1 EPCglobal Inc.] Address [] E-Mail:[irobertson@epcglobalinc.org] Re : [] Abstract:[EPCglobal RFID Supply Chain and Operations Improvement] Purpose:[A look at why GS1’s EPCglobal standards enable supply chain & operations improvements] Notice :This document has been prepared to assist the IEEE P802.15. It is offered as a basis for discussion and is not binding on the contributing individual(s) or organization(s). The material in this document is subject to change in form and content after further study. The contributor(s) reserve(s) the right to add, amend or withdraw material contained herein. Release:The contributor acknowledges and accepts that this contribution becomes the property of IEEE and may be made publicly available by P802.15.

2. doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobalSlide 2 EPCglobal Raison d’Être A look at why GS1’s EPCglobal standards enable supply chain & operations improvements V4 16 th February 2009

3. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission A Different Perspective….. March 2009 Ian Robertson, GS1 EPCglobal3 Much attention has been given to explaining RFID technology and EPCglobal standards and how they enable the use of this technology in supply chains and retail operations. But understanding the technology and the standards is not enough unless their use is put into the most important context of all – that of the business that is using them. This presentation illustrates how they can help improve business from the perspective of an imaginary Vice President of Operations. Although a fictional manufacturing operation is illustrated, the KPI’s and benefits are common to most operations

4. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal4 It’s The Only Reason For Doing It There are many ways to do this and many parties may be impacted, but ultimately this is why a member will embark upon implementing our standards and keys. To gain business benefit

5. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal5 It’s The Only Reason For Doing It There are some basic and natural groupings for how those benefits are realised They will be familiar to operations executives ! To gain business benefit

6. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal6 Efficient Use Of Capital Maximise use of Property, Plant & Equipment Minimise inventory levels Maximum speed of inventory through supply chain Minimise inventory obsolescence & write off Minimise Accounts Receivables

7. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal7 Operational Efficiency Minimise process duration Minimise process steps Minimise process delays & interruptions Minimise down time Make right first time Deliver right first time

8. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal8 Customer Focus Right product made & delivered on time Minimise Time To Market Provide key progress information Right price Right quality

9. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal9 Operations “Layers” 5th March 2009 Level 1 is the management of an individual item, service or information through the operation’s processes. It focuses on individual processes and transformation of material into the saleable item. 1 Level 2 is the management of the operation on an overall and periodic basis rather than on an individual process. It uses data collected during the processes to establish trends, monitor performance, identify bottlenecks etc. 2 Level 3 is the management of the assets, property, plant, equipment, buildings and capital used. It also focuses on long term and strategic planning. Accurate data is essential for this task. 3

10. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal10 Data “Layers” 5th March 2009 Level 1 data is information about the progress of an individual item, component or service through the company's operations. Level 2 data is summary data that provides data ontrends, throughput, supplier and vendor performance etc. It is based upon aggregation of Level 1 data Level 3 data is information about capacity utilisation, capital utilisation, ROE, customer & market requirements. It is based upon aggregation and analysis of Level 2 data

11. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal11 Operations Additional Focus  2006 EPCglobal Inc In addition to managing the layers, Operations mangers have to manage two other very important aspects of their operations Customer – provide the customer with information on order acceptance, order execution, dispatch, tracking and delivery Processes – execute the minimum work necessary to transform the materials into saleable goods or services consistent with stated quality goals

12. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal12 Managing An Item Where is this item in the process ? Is this item on schedule ? Has it gone through all planned processes ? Does someone need to intervene in the process ? Will this item meet customer schedule ? Does it have all planned components ? Has it passed all necessary tests ?  2006 EPCglobal Inc Single Item Associated Single Item

13. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal13 Managing An Operation How was production last month against plan ? Where were my process bottlenecks ? What vendors performed to agreed SLA ? How did operations compare to each other ? How do we compare to others in our industry ? Did we meet commitment to our markets ? What supply issues impacted production ? Did we ship things on time ?  2006 EPCglobal Inc Printer Factory Line Performance Analysis

14. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal14 Managing Fixed Assets  Can I delay facilities expansion and avoid non linear increase in fixed assets allocation ?  When will peak demand exceed available capacity ?  Are my facilities in the right place ?  Will supply chain flows continue to support our markets ?  Is my Landed Cost still competitive ?  Can I improve seasonal capacity planning ?  Do I need different types of facilities ?  2006 EPCglobal Inc Property, Plant & Equipment Inventory & Carrying Cost

15. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal15 Current Assets – Pipeline Inventory  For many industries, this is a significant cost in the whole chain  If I can better see what is where in the pipeline I can better trust supply chain information  If I can ‘trust’ this information I can reduce my ‘buffer’ inventory and reinvest the capital  Knowing what is coming at production enables better production planning  Less inventory requires less space and less handling !  2006 EPCglobal Inc Printer Engine $100 Quad Core CPU $677

16. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal16 Managing Customer Service  Once they have ordered, customers want information  Is my product being made ?  Have you shipped it to me ?  Can you get it to me when I have requested it ?  Where is it now ?  When will it reach me ?  2006 EPCglobal Inc

17. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal17 Managing Processes  What work can I eliminate ?  Are there any duplications ?  Are we doing work because of poor visibility ?  Where are my choke points ?  What work could be done in parallel >  How much effort do we spend going after item information ?  2006 EPCglobal Inc

18. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission Managing Business Benefits March 2009 Ian Robertson, GS1 EPCglobal18 Item Progress Printer Factory Process Performance Analysis Property Process Improvements Improving operations can take many forms and involve many parts of the company as well as its suppliers and customers Inventory & Carrying Cost Plant & Equipment Customer Information

19. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal19 Interdependent Benefits These benefits are often interdependent and even overlapping. The same improvement can provide multiple benefits We can illustrate this by means of the “Benefits Matrix

20. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal20 The Benefits Matrix

21. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal21 Hidden Problems But none of this matters at all if you can’t see what’s wrong in your operation. You can’t fix a problem that you don’t know you have! The key to “seeing” your problems and opportunities for improvement is to “see” what has happened in your operation And that requires “visibility” of what has happened.

22. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal22 A Shared Common Basis  2006 EPCglobal Inc Visibility is not the goal of implementing GS1/EPCglobal standards and RFID technology. It is a means to an end, and that end is those business benefits. But all of these improvement techniques are improved dramatically by accurate and timely visibility of what took place in the operations VISIBILITY

23. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal23 Elements Of Visibility  What something is  Where it was  When it was there And it really helps too if I can know  Why it was there  What condition it was in  2006 EPCglobal Inc But VISIBILITY is knowing.. This simple approach to collecting “event” data is the key to correctly identifying problems in operations, which is the key to improving operations!

24. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal24 How To Get Visibility 1.Have a way to identify an item 2.Have a way to capture that information 3.Have a way to exchange that information 4.Have a way to enquire about that information  2006 EPCglobal Inc And to know those things you have to

25. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal25 Did That Seem Familiar ?  2006 EPCglobal Inc Shared Service Interactions EPCglobal Core Services and other Shared Services EPCglobal Core Services and other Shared Services Company A Company A Exchange of Physical objects with EPCs Exchange of data about EPCs 1010101010101 Company B Company B 1. IDENTIFY 2. CAPTURE 3. EXCHANGE

26. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal26 But Why RFID ?  2006 EPCglobal Inc This pallet has at least one “inner core”. That means that there are cartons inside the pallet with no line of sight to their labels Verifying all cartons present means you must Drop the pallet Break it down Line up the label and scan the barcode on each carton Rebuild and re-label the pallet RFID can possibly read all labels as pallet passes the antennae without stopping at all

27. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal27 But Why RFID ?  2006 EPCglobal Inc It is possible to do all of this using barcodes. We must remember that barcodes have served the world well for more than 30 years. But sometimes the time and effort required means that it is not viable to capture visibility data other than at critical points in the overall process. The main advantage of RFID as a technology is that it enables the viable capture of identity and other data at many more points in the processes than was previously possible. And it can do that without interrupting the physical flow of items… And barcodes can help by providing a secure backup to RFID. They even enable the implementation of RFID in stages across processes and trading partners. VIABILITY

28. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal28 So Identify, Capture & Exchange…  2006 EPCglobal Inc Identify Exchange + = Capture +

29. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal29 Gives Us Visibility Of …..  2006 EPCglobal Inc What, When, Where, Why & How Identify Exchange + = Capture +

30. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal30 Supporting Managing Benefits  2006 EPCglobal Inc Process Improvements Optimised Inventory Pipeline Velocity Customer Service Asset Management Trend Analysis Vendor Performance = What, When, Where, Why & How Identify Exchange + = Capture +

31. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal31 Which Explains Raison d’Être !  2006 EPCglobal Inc This is why the GS1/EPCglobal standards are an excellent support in achieving supply chain improvement and optimisation……… To gain business benefit

32. ©2008 GS1 EPCglobal doc.: IEEE 802.15-09-0200-00-004f Submission March 2009 Ian Robertson, GS1 EPCglobal32 Questions? Ian Robertson +1 832 283 1790 irobertson@epcglobalinc.org