1. HP’s RFID Privacy Program
Dan Swartwood Data Privacy Officer

2. Really Frantic Implementation Date
RFID Defined
Really Frantic Implementation Date
WHY RFID??
Current State:
Currently out of stock of top 200 SKU’s is 38% on busiest shopping days
Invoice/Delivery reconciliation costs $40B annually
Counterfeiting/Grey Market costs are estimated at $500B
Forrester 2004
November 18
HP’s RFID Program

3. What is an RFID tag?
RFID (Radio Frequency Identification) tag/label is a tag that at least has an identification number that can be electronically read at a distance even when not visible
RFID tags have few problems of orientation and obscuration when compared with barcodes, magnetic stripes, etc.
Thus, can be used for more than just tracking or payment
RFID tags can include electronic chips, storage, local power source, and other functionalities that make them very versatile
RFID systems are comprised of tags, reader/writers to identify and communicate with the tags, and a controller that manages the information interface with a computer system
Sources: ABI, VDC, Philips, IDTechEx, HP Internal
Sources: ABI, VDC, Philips, IDTechEx, HP Internal
November 18
HP’s RFID Program

4. Example RFID Uses Function Example Tracking FMCG supply chain Tracing
Anti-counterfeiting
Entertainment
Safety
Security
Auto-rejection
Transactions
Proof of ownership
Anti-tamper, anti-theft
Example
FMCG supply chain
Monitor prisoners, children
Verify authenticity covertly
Voice activation in toys
Pharmaceutical use instructions
Personnel tagging in secure areas
Electronic handshake requirement
Electronic road-tolls
Tagging of valuable products
Real-time detection, identification
Sources: ABI, VDC, Philips, IDTechEx, HP Internal
November 18
HP’s RFID Program

5. Limitations of RFID Difficult to read through metal or liquids
Does not geo locate
Only works at very limited ranges ( a few feet)
Can not read through walls
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HP’s RFID Program

6. Why Now?? Wal*Mart Mandate:
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Why Now??
Wal*Mart Mandate:
1 EPC tag per carton – 100% read on conveyor
1 EPC tag per pallet – 100% read at Inbound dock
Conveyor speed of up to 600 feet per minute
3 Texas Distribution Centers
By January 2005
Other mandates:
US Dept of Defense
Target
Metro
Carrefour
Albertsons
Commercial Customers requests
November 18
HP’s RFID Program

7. What Does HP Stand for? Rules from the Garage
Believe you can change the world
Radical ideas are not bad ideas
Invent different ways of working
Believe that together we can do anything
Invent
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HP’s RFID Program

8. HP RFID Strategy Business Driver & Objectives
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HP RFID Strategy Business Driver & Objectives
HP’s business objectives
create an agile data infrastructure accessible at any time
Get accurate distribution & sales information related to products
Product life cycle information from manufacture to retail channels
enable low touch processes & improvements on Supply Chain cost structures
increase material & finished goods velocity thru Supply Chain
quality tracking at key processes in manufacturing
reliable information capability for Reverse Distribution processes
faster shipping and receiving processes
HP’s business drivers
Provide RFID enabled goods to Customers who request them
Use RFID / EPC internally to save costs
Help other companies to implement
Develop RFID / EPC related technology
Support and enable global standard business processes
November 18
HP’s RFID Program

9. I just know that RFID justification is in here somewhere…..
November 18
HP’s RFID Program

10. Potential Consumer Benefits from RFID
Reduced costs
Reduced out of stock
Faster, better targeted product recalls
Faster service
Reduced drug fraud/incorrect prescriptions
Better food supply management

11. The Supply Chain Business Case
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The Supply Chain Business Case
Retaining your Customer
Tagging goods that your Customer asks you to tag
Improving Supply Chain Efficiency
Do things at less cost by reducing labor involved
Increase Supply Chain velocity by taking less time to do the same work
Do thing better by increasing first pass accuracy
Lessen Supply Chain risk by increased in transit accountability
Improved Data Collection
RFID reduces effort & cost to identify item
Which can make identification viable where it wasn’t before
And this can improve overall Supply Chain visibility
Which should reduce second guessing of events

12. RFID Potential To Returns Processing & Recycling
No decision has been made yet on a specific program – pending discussions on item level tagging
Returns have to be validated against the original shipment – RFID could enable such verification without reference to original order
Sorting material for disposition & recycling can be labor intensive – RFID would enable automatic sorting
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13. Potential Benefits Of Key Data On The Tag
Recording exact configuration at time of manufacture enables faster Returns processing
Date of sale enables accurate validation of warranty entitlement
Tagging material and components facilitates disposition and recycling in support of the environment
Tagging components for Rev Level control facilitates faster recalls and inventory rework
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14. Business drivers for promoting privacy
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Business drivers for promoting privacy
“91 percent of surveyed CEOs believe corporate and social responsibility management creates shareholder value.”
Managing CSR Report, Nima Hunter
“Corporate America’s Social Conscience”, Fortune, June 2, 2003
The business case for data protection has in it facets of privacy as a human right
Privacy enhances brand value, image and reputation:
70 percent of consumers will not buy products or give information when they do not trust a company. (Greenfield Online Survey 2001)
69 percent of customers are afraid personal data will be misused when buying online. (EU Online consultation September 2002)
“Major blowups” can cost companies over $1M in internal/external costs. (Surviving the Privacy Revolution, Forrester Sept 2001)
54 percent of consumers surveyed do not believe that most businesses handle the personal information they collect about consumers in a proper and confidential way. (Harris Interactive Survey, March 2003)
Minimizes risk of compliance breach
Builds the brand
Enhances trust
Reinforces global citizenship
customer
community
employee
shareholder
Privacy = Trust = Revenue
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15. HP Privacy Principles support the “fair information practices”
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HP Privacy Principles
support the “fair information practices”
give customers control over their own personal data
provide customers with choices that enhance trust and, as a result, grow the business
put customers in the lead to determine their relationship with hp
enforce the highest integrity and compliance in internal practices, and with all vendors and suppliers
support trust relationship with employees
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16. HP's RFID Privacy Efforts
November 18
RFID Brief Overview Since program was launched in May 2003, we have established…
HP's RFID Privacy Efforts
Formally invited to join Core Team –Nov 03
Privacy presentation to Core Team Dec 03
Joined EPC-Global Privacy group Feb 04
Weekly internal consultations
Developed internal policy position
Working with EICTA on RFID position
Working with NGO’s to influence USG
Periodic meetings with Partners/Customers
Present at the Wal*Mart rollout Apr 04
November 18
HP’s RFID Program

17. We need to foster constructive solutions to privacy concerns
November 18
RFID Brief Overview Since program was launched in May 2003, we have established…
HP's RFID Privacy Approach
Consumers should be given notice about the presence of RFID tags
Consumers should have the choice about removing or deactivating tags
Must be a practical&secure way to offer choices for linking PII with RFID data
Organizations that, with permission, collect and store PII with RFID
data must take appropriate security measures
Businesses need to do more to educate the public on uses/benefits of RFID
We need to foster constructive solutions to privacy concerns
November 18
HP’s RFID Program

18. HP implements the EPC Identification Label
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HP implements the EPC Identification Label
“91 percent of surveyed CEOs believe corporate and social responsibility management creates shareholder value.”
Managing CSR Report, Nima Hunter
“Corporate America’s Social Conscience”, Fortune, June 2, 2003
The business case for data protection has in it facets of privacy as a human right
Privacy enhances brand value, image and reputation:
70 percent of consumers will not buy products or give information when they do not trust a company. (Greenfield Online Survey 2001)
69 percent of customers are afraid personal data will be misused when buying online. (EU Online consultation September 2002)
“Major blowups” can cost companies over $1M in internal/external costs. (Surviving the Privacy Revolution, Forrester Sept 2001)
54 percent of consumers surveyed do not believe that most businesses handle the personal information they collect about consumers in a proper and confidential way. (Harris Interactive Survey, March 2003)
Will be on all packaging
November 18
HP’s RFID Program

19. Label on HP product packaging
EPC Text
EPCGlobal Logo
Will also be added to bar code label in future
RFID on back of the bar code label
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HP’s RFID Program

20. (shows antenna and chip)
Back of Box Label
(shows antenna and chip)
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HP’s RFID Program

21. Pilots To Date At HP
November 18

22. The Memphis Pilot
Scheduled impacted by change of Completion vendor and difficulties in switching vendor systems
Should be live in volume by August 2004
We are also working with our large Retailers to synchronize our efforts with their own pilots
Tagging pallets & cases with EPC Class 1 Standard tags
November 18

23. Chester Plant Pilot
Includes systems changes to Shop Floor Control and WMS
Chester receives inkjet cartridges in bulk and packages them for different markets and Customers
They are starting at pallet and case level outbound and will then “walk” back up the process chain to Receiving
November 18

24. Sao Paolo Printer Plant
Tags will be used to carry quality & control data thru the process with the unit as it is built
Sao Palo receive components and raw material and perform the full range of manufacturing and completion processes, shipping finished goods to Customer in the Latin America Region
They are starting at manufacturing processes and will then “walk” down the process chain to Shipping
November 18

25. HP’s RFID Privacy Program Summary
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HP’s RFID Privacy Program Summary
We are a technology company with a long solid reputation for innovation and privacy
Privacy is a legitimate concern of our customers and we will address these concerns in a pro-active and positive manner
We are implementing RFID in our own manufacturing & distribution operations and integrating privacy standards into those operations
We will lead by example in the privacy space
We can and will be a positive force to lead the RFID privacy discussion
Our internal experience has given us a competitive advantage

26. Where Do We Go From Here ?
We expect to contribute fully to the development and global implementation of the EPC standards and privacy implementations
We believe that HP has much to offer both as a very large user, as a privacy leader and as a technology solutions company
We are also supporting RFID related development at various universities and business schools
November 18

27. Q & A
November 18