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1 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. SESSION 1 State of the art and Market Trends Stefan Therond Accenture Technology Labs Silent Commerce Lab Director
2 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Popular misconceptions about RFID… n RFID has been around for many years and is widely used in specialised/close loops applications. n RFID is not to be confused with RF (i.e. Wireless LANs) already used the Retail supply chain. n RFID is not a plug & play technology. n One frequency fits all is a myth. n Technology is evolving but physics has limitations. n RFID is tested now for open supply chain applications and deployments will be going on for multiple years. n Supermarket self-checkout is probably years away from us, if it ever happens. n RFID does not solve data inconsistency within and across enterprises. The key is to identify which data are important for which application. n Management of this new physical infrastructure has been underestimated. n And remember: it is all about people
3 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. It is not only about the tags… Tags Read Points Installation & Tuning Middleware Software Integration Change Management Product & Process Changes …even at 5 cents each…
4 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. RFID concerns Practical implications of RFID Many clients are still in a wait and see mode n Concern about ROI (just another technology wave) n IT budget restrictions & high infrastructure/solution costs n Not always a clear business case within the enterprise n Uncertainty around standards n Difficult to achieve competitive advantage through technology alone n What do I need to do to comply? What are the mandate requirements? What will this cost me? How much can I charge to the organization driving the mandate? n What do I do first? Second? And how can I take a phased approach? n What needs to change in my existing systems and business processes to integrate RFID? n How long will it take to make that happen? Will I be ready in time? n What else will be required in the future? What other retailers will soon require RFID? n And most importantly, how can I leverage the technology for my own benefit? What is the business case? Concerns about the practical implications of this new technology have left many companies wondering what to do next
5 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. RFID can be used at various tagging levels Non Resaleable Management Consumer Supply Chain Management Level of Tagging / Time Cumulative Value Customer insight Shelf availability Self checkout Innovative payment mechanism Return management Maintenance Track & Trace Inventory management Asset management Quality Control Distribution Productivity Track & Trace Inventory management Asset management Shelf maintenance High value goods management Truck/AssetTote/PackagePallet/Case
6 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Look for Burning Platforms… Shrink Enhanced check of products at receiving and exit bays Counterfeiting Full tracking of goods from plant to client. Also applies to grey market Regulatory Requirements Full tracking of goods from raw materials to shipment. Genealogy. Quality Batch tracking in manufacturing, inventory & fulfilment operations tracking Stock-Outs Excess Inventory Enhanced inventory visibility, due to improved entry / exit checks, and permanent physical counting Todays most Common drivers of value are…
7 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. A roadmap for suppliers Understand the Opportunity What are the benefits of this new technology? What is the opportunity for supply chain improvement? What is the retailers contribution to revenue and profitability? Can this be a competitive advantage? What is the typical investment required? What are the time constraints? What are the budget constraints? How does this fit in with other business and IT change initiatives? Does this constitute a burning platform? Is there consensus throughout the organization? What technology components will be utilized? What vendors will be utilized? Where will the pilot be executed? How will the technology be implemented? What business capabilities offer the most value? What business capabilities will be pursued? What parts of the business will be affected? In what sequence will the business capabilities be pursued What is the business case for building the new capabilities? How will the benefits be measured? Create an AgendaBegin building Capabilities Formulate a Strategy A successful RFID program begins with a clear understanding of how to proceed…
8 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Enhanced ROI using groundbreaking RFID industry solutions EPC Pharma Jumpstart EPC Electronics Jumpstart A consortium of manufacturers, distributors and retailers across the pharmaceutical industry Working together to prove the business value of Electronic Product Code (EPC) and radio frequency identification (RFID) within the supply chain Focus on the following areas: –Safe and secure supply chain –Returns management –Operational efficiencies –Establish standard industry operating models for each of these areas and encourage EPC usage throughout the pharmaceutical industry Abbott Laboratories Procter & Gamble Johnson & Johnson Cardinal Health McKesson Rite Aid CVS Pharmacy Abbott Laboratories Procter & Gamble Johnson & Johnson Cardinal Health McKesson Rite Aid CVS Pharmacy Leverage approach successfully used in Pharmaceutical Prove out RFID business value in an end-to-end supply chain context Jumpstart RFID uptake and help establish the industry operating model Accelerate the technology learning curve for all participants Harness the momentum currently developing individually at companies Dell Sony HP Flextronics Haier Best Buy Circuit City Wal-Mart UPS Nokia Dell Sony HP Flextronics Haier Best Buy Circuit City Wal-Mart UPS Nokia Participants Potential Participants
9 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Is RFID mature to fit the retailers mandate? Standards Partial worldwide data standards Country-specific frequencies allocation Market HW & SW Vendor market is fragmented Value chain collaboration Technology Performance & robustness HW & SW costs Data synchronisation & integration People Afraid to change work habits and re-focusing on mainstream tasks Privacy and Trust
10 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Putting it all together requires a wide range of expertise… Solution Delivery Accelerator Speeds up the delivery of RFID solutions S&BC Build Test& Refine Execute Pilot Scale and Realize Benefits S&BC Build Test& Refine Execute Pilot Scale and Realize Benefits Methodology Vendor Alliances Accenture Technology Labs Technology and Vendor Selection Tool Reference Architecture Enterprise integration Accelerator Cost/Benefit Estimator Assets Tools Methods Procurement Service
11 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. …bringing a phased approach throughout the implementation cycle
12 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. The Wal-Mart Mandate - A Retailer Plan for Action n Jan 2005 – All cases/pallets shipped to 3 DC (Texas) and the 150 associated Stores n Scanning at 5 Places… n DC: receiving & shipping dock n Store: receiving dock, backroom to store and trash compactor n # 1 Goal is store backroom inventory visibility n Inventory Management n Visibility to Suppliers n Inventory shrink n Asset tracking n The pace of domestic expansion dependent on progress and technology evolution and is expected to be announced in the summer. n Tagging individual items 10 to 15 years away. n This is only the beginning of the journey…
13 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Accenture provides a One-stop shop solution Accenture Third-Party Consulting IT Software Hardware Infrastructure RFID Middleware RFID Selection Installation & Adaptation Installation Deployment Execute Strategy, Processes, Organization, IT ArchitectureSelection Deployment Adaptation & Integration PMO
14 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Some take away n It works n There is no simple recipe book. But it is not black art either. n Understand business benefits n Gain top management support n Manage expectations n Technology is evolving / physics has limitations n Hype curve position is extremely high n Start now and use a phased approach n Focus on 4 KEY components n Data collection / physics n Data management / architecture n Business process n ROI capture n And remember: it is all about people
15 RFID and Telecommunication Services 25th May 2004 DATA BASE forum © Accenture All Rights Reserved. Conclusion Visit our web site at… …
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