RFID without the hype: Best practices and lessons learned Presentation Title November 9, 2018 RFID without the hype: Best practices and lessons learned LGO Alumni Webinar Ronak Shah May 20, 2005 Speaker Name

Agenda Background RFID and enabling operational efficiency Conclusion Presentation Title November 9, 2018 Agenda Background What is RFID? RFID capabilities Industry adoption RFID and enabling operational efficiency Developing a business case Performance and reliability The Raytheon Integrated Air Defense Center Conclusion Key takeaways Other resources 11/9/2018 Speaker Name

RFID Technology – How it works Presentation Title November 9, 2018 RFID Technology – How it works Network RFID Tag Interrogators Middleware / ERP An interrogator emits RF waves, which are picked up by tags nearby A tags modulates the signal and responds with its unique identifier The interrogator filters the responses to identify events like tag arrivals and departures These events are communicated to enterprise middleware software which understands the business process impact of this activity. Pass out RFID Tags now 11/9/2018 Speaker Name

Accelerating pace of development Presentation Title November 9, 2018 RFID History 1970s Livestock 1999 Auto-ID Center 2004 Raytheon kickoff 1940s IFF 80s-90s Retail theft Fastlane 2003 RFID mandates published Accelerating pace of development 11/9/2018 Speaker Name

What does it look like? 4 inches 8 inches x 12 inches Presentation Title November 9, 2018 What does it look like? 4 inches 8 inches x 12 inches 11/9/2018 Speaker Name

What does it cost? Software costs are highly variable Presentation Title November 9, 2018 What does it cost? Hardware subcomponent Cost in US Dollars Active tag (limited functionality) $1.50 Passive tag $0.25 EPCGlobal™-compliant fixed interrogator $2,000.00 Antenna $200.00 Software costs are highly variable Licenses for middleware solutions $18K – six figures Implementation costs high because it still has emerging technology problems Change management costs can be substantial Training, installation, re-engineering processes 11/9/2018 Speaker Name

Existing technologies Presentation Title November 9, 2018 Existing technologies standard barcode 2D barcode Mobile tracking systems Old-fashioned way! 11/9/2018 Speaker Name

RFID enables more efficient supply chains Presentation Title November 9, 2018 The promise of RFID RFID’s three key advantages over traditional barcode… Field-based: does not require line of sight or manual scans High throughput: 10s – 100s of scans / second Storage capacity: allows product serialization and more Working under the constraints of: Cost: currently $.10 - $.25 per tag Performance: what if the tag is cannot be read? Ubiquity: information is more valuable when it is shared Interoperability: still difficult to integrate with enterprise systems RFID enables more efficient supply chains 11/9/2018 Speaker Name

Drivers of adoption EPCGlobal™ Mandates Presentation Title November 9, 2018 Drivers of adoption EPCGlobal™ Industry consortium with a goal of reducing barriers to adoption for RFID Set standards for tags, readers, middleware Forum for discussing intellectual property issues Knowledge-sharing Allocation of global identifiers Members include Wal*Mart & DoD, their suppliers, RFID component providers, and system integrators Mandates First Wal*Mart and DoD, now many others Requires suppliers to tag shipments and transmit the information in advance of the arrival. 11/9/2018 Speaker Name

Developing a business case Presentation Title November 9, 2018 Developing a business case RFID teams creating business cases have the same questions: What “future state” can we achieve using RFID? What data do I need to be looking for? What usage scenarios should I implement and what should I tag? These are often difficult to answer Root cause is two key complexities with RFID: Separating what RFID can offer from what can be achieved using other process improvement efforts Systems interactions drive both costs and benefits Large upfront cost associated with hardware, training, installation Gets easier to add elements to an RFID system 11/9/2018 Speaker Name

Excel™ RFID Calculator Presentation Title November 9, 2018 Excel™ RFID Calculator Four stage process for evaluating RFID Inputs: an understanding of RFID and process mapping abilities Outputs Decisions on what you should implement and what to tag NPV / ROI / Payback you’ll achieve Ability to gauge sensitivity to various scenarios Process mapping System-wide Parameters wizard Usage scenario detail ROI / Payback optimization Current & future state Does not use Value stream mapping! Usage scenarios Materiel types Reader sets IT Modules Replace barcodes w/ RFID scans Asset visibility Cycle counting Others…. Manual or automatic optimization Allows sensitivity analysis Financial results in standard FCF terms 11/9/2018 Speaker Name

Stage 1: Mapping w/ RFID swim lanes Presentation Title November 9, 2018 Stage 1: Mapping w/ RFID swim lanes 11/9/2018 Speaker Name

Stage 2: System setup Presentation Title November 9, 2018 11/9/2018 Speaker Name

Stage 3: Usage scenarios Presentation Title November 9, 2018 Stage 3: Usage scenarios 11/9/2018 Speaker Name

Stage 4: Financial results & sensitivity Presentation Title November 9, 2018 Stage 4: Financial results & sensitivity 11/9/2018 Speaker Name

Presentation Title November 9, 2018 RFID tag performance The ability for a non-battery tag to communicate with a reader can be negatively affected by a number of factors Fishbone diagram follows This is a big problem for some manufacturers! Performance is getting better, but will it approach some asymptote below expectations? 11/9/2018 Speaker Name

Fishbone diagram: Tag read reliability Presentation Title November 9, 2018 Fishbone diagram: Tag read reliability 11/9/2018 Speaker Name

Raytheon’s experience & my internship Presentation Title November 9, 2018 Raytheon’s experience & my internship First Andover internship outside of Operations / Engineering Company has a large compliance project underway and a site in Texas had just begun a pilot project for cycle counting Wanted to evaluate RFID for supply chain efficiencies in Andover, Massachusetts Lots of support for the internship Andover, MA plant = Integrated Air Defense Center (IADC) 1.2M sq. ft. facility with 3,000 employees Very few will have seen the IADC on tour, so… 11/9/2018 Speaker Name

Overhead view Presentation Title November 9, 2018 11/9/2018 Speaker Name

Incoming conveyer (not used) Presentation Title November 9, 2018 Incoming conveyer (not used) 11/9/2018 Speaker Name

Vendor, UPS, and Raytheon Receiving labels Presentation Title November 9, 2018 Barcoding process Vendor, UPS, and Raytheon Receiving labels 11/9/2018 Speaker Name

Penco bulk storage Presentation Title November 9, 2018 11/9/2018 Speaker Name

Main stores carousel 27 carousels total Presentation Title November 9, 2018 Main stores carousel 27 carousels total 11/9/2018 Speaker Name

Results of the internship Presentation Title November 9, 2018 Results of the internship Evaluated materials distribution process to the manufacturing floor only Much harder to get data for manufacturing lines, and far less discipline in handling once you get downstream Volumes become very small 13 usage scenarios, 6 material types, 219 solutions RFID is not appropriate for the IADC at this time A few solutions were 5-year NPV positive, but Only when evaluated as a risk-free project Ignoring costs for change management High expectations of RFID tag performance Sensitivity analysis 4X reduction in HW and tag costs helps, but Only when it’s easier to integrate will RFID make sense for internal use 11/9/2018 Speaker Name

Key takeaways Key differentiators between defense and commercial: Presentation Title November 9, 2018 Key takeaways Key differentiators between defense and commercial: Short distribution chain precludes popular usage scenarios Years before we can expect material tagged by our vendors Cost-plus contracts result in different accounting methods for inventory carrying cost Two methods for approaching RFID “Paving the cow-paths” (Prof. Jonathan Byrd) New, future-state processes enabled by technology adoption Separating usage scenarios in which RFID is an enabler from those in which RFID is a distraction RFID can work very well in unique tracking scenarios! FastLane, Cow leather (!!!) 11/9/2018 Speaker Name

Other resources Shameless plug: My thesis! www.autoidlabs.org Presentation Title November 9, 2018 Other resources Shameless plug: My thesis! www.autoidlabs.org www.epcglobalinc.com www.rfidjournal.com 11/9/2018 Speaker Name