1. RFID without the hype: Best practices and lessons learned
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November 9, 2018
RFID without the hype: Best practices and lessons learned
LGO Alumni Webinar
Ronak Shah
May 20, 2005
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2. Agenda Background RFID and enabling operational efficiency Conclusion
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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
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3. RFID Technology – How it works
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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
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4. Accelerating pace of development
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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
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5. What does it look like? 4 inches 8 inches x 12 inches
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November 9, 2018
What does it look like?
4 inches
8 inches x 12 inches
11/9/2018
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6. What does it cost? Software costs are highly variable
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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
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7. Existing technologies
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November 9, 2018
Existing technologies
standard barcode
2D barcode
Mobile tracking systems
Old-fashioned way!
11/9/2018
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8. RFID enables more efficient supply chains
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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
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9. Drivers of adoption EPCGlobal™ Mandates
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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
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10. Developing a business case
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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
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11. Excel™ RFID Calculator
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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
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12. Stage 1: Mapping w/ RFID swim lanes
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November 9, 2018
Stage 1: Mapping w/ RFID swim lanes
11/9/2018
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13. Stage 2: System setup Presentation Title November 9, 2018 11/9/2018
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14. Stage 3: Usage scenarios
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November 9, 2018
Stage 3: Usage scenarios
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15. Stage 4: Financial results & sensitivity
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November 9, 2018
Stage 4: Financial results & sensitivity
11/9/2018
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16. 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
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17. Fishbone diagram: Tag read reliability
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November 9, 2018
Fishbone diagram: Tag read reliability
11/9/2018
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18. Raytheon’s experience & my internship
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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
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19. Overhead view Presentation Title November 9, 2018 11/9/2018
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20. Incoming conveyer (not used)
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November 9, 2018
Incoming conveyer (not used)
11/9/2018
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21. Vendor, UPS, and Raytheon Receiving labels
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November 9, 2018
Barcoding process
Vendor, UPS, and Raytheon Receiving labels
11/9/2018
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22. Penco bulk storage Presentation Title November 9, 2018 11/9/2018
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23. Main stores carousel 27 carousels total Presentation Title
November 9, 2018
Main stores carousel
27 carousels total
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24. Results of the internship
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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
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25. Key takeaways Key differentiators between defense and commercial:
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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
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26. Other resources Shameless plug: My thesis! www.autoidlabs.org
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November 9, 2018
Other resources
Shameless plug: My thesis!
11/9/2018
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