RFID in a 3PL Enviornment

Dick Pocek, Director of Logistics

Jim Dean, Manager of Customer Supply Chain

About Energizer

- Energizer Holdings Inc. - (Eveready Battery Company & Schick-Wilkinson Sword )

Energizer Holdings, Inc.(Energizer), incorporated in 1999, is one of the world's largest manufacturer of dry cell batteries and flashlights, and a global leader in the dynamic business of providing portable power

Energizer is the successor to over 100 years of expertise in the battery and lighting products industry, formerly Eveready Battery Company 1905 -1999

Prior to Eveready name, known as National Carbon Company from 1886 -1905

Energizer’s battery and flashlight subsidiaries offer a full line of products in five major categories: alkaline, carbon zinc, miniatures and rechargeable batteries; and lighting products

In January 2003 Energizer announced purchase of Schick-Wilkinson Sword razor business from Pfizer Inc. for $930 million

Schick-Wilkinson Sword is the second-largest shaving-products company in the world

Energizer, Eveready and Schick-Wilkinson Sword brands are marketed and sold in over 140 countries

National Carbon Co. 1st dry cell battery

American Ever Ready Co.

first tubular flashlight

Ralston Purina buys Eveready

Battery Co

1896 1914 1986 April 4, 2000

National Carbon buys American Ever

Readyand forms Union Carbide

Eveready Battery Co. becomes a subsidiary of independent Energizer

Holdings Inc., NYSE ticker symbol ENR

Invent first dry

cell battery (CZ)

Invent first commercial

Watch battery

1896 1898 1931 1955 1957 1959 1980 1990 1995 2001

First to freshness

date batteries

Invent first

alkaline battery

Invent first flashlight.Invent first

D size battery.

Invent first

miniature battery

for hearing

aids.

Invent first lithium battery(AA)

First zero-added

mercury battery

First on-

battery tester

First hearing

aid battery

dispenser

A History of Innovation

Energizer innovation extends to branded and private label products, as well as our account teams and approach to category management.

Kenya

Sri Lanka

SingaporeMalaysia

Philippines

Indonesia

Tianjin, China

Egypt

La Chaux De Fonds, Switzerland

AsheboroMaryville

St. Albans VT

Bogang, China

Bennington VT

Singular Focus + Global Supply Chain = Efficiency

A Global Production Complex

Garrettsville, OHMarietta, OH

Walkerton, Canada

Caudebec, FranceTanfeield Lea, U.K.

Wal-Mart Pilot

Wal-Mart Detailed Expansion Step 1: January 2005 – 3DC’s, 102 Stores, 36 Clubs

– 6068 Sanger, TX (RDC)– 6064 Cleburne, TX (GDC)– 8235 Desoto, TX (X-Dock)

• Step 2: June 2005 – 7 DC’s, 241 more Stores, 73 more Clubs– 6016 New Braunfels, TX (RDC)– 6036 Palestine, TX (RDC)– 6056 Terrell, TX (GDC)– 6083 Temple, TX (GDC)– 7010 New Caney, TX (GDC)– 6698 Dayton, TX (X-Dock)– 8234 Searcy, AR (X-Dock)

• Step 3: October 2005 – 2 DC’s, 202 more Stores– 6018 Searcy, AR (RDC)– 6048 Opelousas, LA (RDC)

• 2005 Total: (12 DC’s), 545 Stores, 109 Clubs = 654 facilities

Wal-Mart

80% of SKUs are Break-Pack and will not be tagged initially.

Private Label SKUs will not be tagged

Ship mostly mixed pallets not requiring pallet tags

Sam’s

TL environment

100% of SKUs will be tagged at case and pallet level.

Energizer and SWS SKU Landscape

Energizer RFID Lab

Tag and Product Testing

Tested different carton types

Tag orientation

Tag placement

Different Tags

Energizer’s 3PL RFID Expectations

“Slap and Ship” implementation

Processes that are easy to transfer between sites

Costs spread over customer base

Flexible systems

Tracking capability

RFID Energizer/3PL Issues

Cartons cannot be opened at the warehouse due to the use of wrap-around automated carton forming upstream

Size limitation of some cartons

Order cycle time issues

The Future of Barcodes

External

UPC

ITF14

UCC128

Internal

EAN128

UCC128

Energizer’s position on bar code utilization is that there will be no change to our use of barcodes near term.

Current internal projects will continue as scheduled.

External bar code requirements will be dictated by the market place.

Energizer’s 3PL Expectations

Distribution technology leader

Innovator

Value added services

Stable management team

Global capabilities

Partnership

How Does RFID Compare With Other Major Information Technology Development & Deployment Milestones ?

Internet

Y2K

RFID

Similarities:

The development or deployment of new IT solutions

Potentially disruptive technology integrations

Fluid landscape with regard to products and vendors

Massive influx of resources to respond quickly

Market Position Consideration - Lead or Lag?

1999

Manufacturers Issues Regarding RFID Deployment In Supply Chain Applications

Customers Are Starting To Require RFID Use

•Retailers

•Government (i.e. DoD & FDA)

Limited Resources are available to meet the challenge

•Personnel

•Financial Resources

•Time

Many companies have varying degrees of success when using consultants

Can I really find an ROI for implementing RFID in my business?

How can you make RFID deployments operationally viable?

Few companies have real experience with this emerging technology

Who are my strategic partners that could help with this initiative?

Solution EvolutionMoving towards customer integration

LLP

Managed Transportation

Ord

er

Fulfi

llmen

t

Reverse

Log

istics

Vendor Managed Inventory

Value Creation Potential

Com

ple

xit

y

SCM

Managed Transportation

Ord

er

Fulfi

llmen

t

Reverse

Log

istics

Vendor Managed Inventory

Warehousing

Service Provider

X-DockingWarehousing Transport

Third Party Provider

5% to 10% typical cost savings 10% to 20% typical cost savings

$

RFID assists business integration in that it provides real time data and visibility,

involving logistical providers who service companies

throughout the supply chain

Generic Supply Chain Solution Sets

Supply Chain Management

Raw MaterialTransportation

Manufacturing WarehouseOperations

Finished GoodsTransportation

DC Operations /Finished GoodsInventory Mgt.

End Customer/Consumer

Suppliers(Domestic &

International)

Raw MaterialInventory

Management

Plant Shuttles

OutboundTransportation

Project Management

Continuous Improvement

Knowledge Management

Supplier Management

Inbound Raw Materials

In-plantServices

Raw MaterialsInventory

Finished GoodsInventory

Customer Management

InternationalFreight

InboundTransportation

InboundTransportation

OutboundTransportation

OutboundTransportation

InternationalFreight

Automatic identification and data collection technologies are used in all parts of the supply chain today, thus requiring the potential integration of RFID

into these areas in the days ahead.

RFID Can Be Used In Various Points Throughout The Supply Chain

• Manufacturing - discretely identify products, the facility in which it

was produced and the date of manufacture

• Distribution Centers - accurate inventory control and order

fulfillment activities

• Retailers - track shelf activity, trigger automated fulfillment,

improve customer checkout, billing and shrinkage

• Reverse Logistics - evaluate merchandise return speed to DCs,

disposition of returned products, financials

• Container/Yard Management - Real-Time Locating Systems

(RTLS) triangulate the relative position of tagged items. Useful also

for specialized Kanban systems (requires expensive RFID Tags)

• Asset Tracking – tracking items such as returnable containers and

high value products

Ultimately, the big cost savings and service benefits of RFID will come from a dramatically enhanced ability to manage inventory and orders across time and the supply chain. 3PLs are already firmly established in delivering these type of logistical applications.

RFID – How Can It Affect Supply Chain Partners In The Future?

• Customers will likely keep requesting the use of RFID

and other emerging supply chain technologies.

• Resources throughout the supply chain could

possibly be positively or negatively impacted by RFID

deployments (i.e. personnel, inventory, money,

equipment, space …).

• Supply Chain information technology

implementations will have special focus placed on

RFID integration

• Trading partners will have to figure out how to

manage the data collected from RFID applications and

use it for advanced demand planning strategies.

• 3PLs with RFID experience will be able to assist

companies across the entire supply chain.

3PL RFID Case Study: Exel PLC

Presentation courtesy of Exel PLC

Executive Summary (RFID)

The current state of RFID:

An emerging technology

Many critical issues

Ready for wide adoption in the supply chain?

As supply chain leaders, Exel is responding to this

technology by directing global and local teams to work

with customers, RFID experts, and vendors to

understand the value, cost, challenges and

opportunities related to this technology.

Given Exel’s market position, we have a unique opportunity to understand technology from multiple business applications, across different supply chains.

Given Exel’s market position, we have a unique opportunity to understand technology from multiple business applications, across different supply chains.

Factors Driving Exel’s Response to RFID

Customers- Retailer compliance- Opportunity to provide customer

channel solutions

Operations efficiency- To be proven

Supply chain visibility in certain services…- Global freight management- Demand planning- Track/trace- Returnable containers

…and broader future visibility leading to enhanced supply chain performance and solutions

Exel’s RFID strategy positions Exel to better understand RFID and create value:

Exel RFID Organization

Global RFID Strategy

Team

RFID Core Team

Market Vertical & Account Specific Teams

Steering Committee

Communication & Consistency

Execution

Within each team all operational functions and market verticals are represented, thus making sure that RFID

solutions are looked at holistically and that best practices are shared.

Within each team all operational functions and market verticals are represented, thus making sure that RFID

solutions are looked at holistically and that best practices are shared.

So what has Exel done to date. . .

•Participated in some 8 – 10 major pilots globally Theatres – Americas, EMEA & APAC

Industry Verticals – Retail, Consumer & Technology

Standards – EPCglobal and non-EPCglobal RFID

•Became a member of EPCglobal

•RFID deployments/applications inclusive of: Numerous pieces of material handling equipment

Dock doors

Staging areas and pallet racking

Pallets

Stretch wrappers

Containers and high value assets

Exel RFID Application Examples

Dock Door RFID Portal

Fork-lift Mounted RFID

Garment On Hanger RFID Portal

RFID Enhanced

Stretch Wrap Machine

RFID Enabled Rack

RFID Enabled

Bulk & Staging Areas

RFID Centers of Excellence Overview

• Create a theatre specific RFID laboratories where Exel and partners can test RFID application

– Americas, Europe and Asia

• Involve RFID, WMS, system integration, material handling and other technology vendors as partners

• Multiple applications of the technology will be reviewed in these centers

• Vendor and technology “agnostic” due to fluid RFID landscape (standards and technology in a state of flux)

• Open to customers to test their RFID applications

Centers of Excellence activities will help our clients and our account teams determine the best applications for RFID in supply chain

applications.

Centers of Excellence activities will help our clients and our account teams determine the best applications for RFID in supply chain

applications.

RFID Center Of Excellence Preliminary Layout

Americas Facility

Center Of Excellence will focus on real-world tests for RFID usage in areas such as shipping & receiving, putaway & picking, label placement, material handling and

systems integration.

Center Of Excellence will focus on real-world tests for RFID usage in areas such as shipping & receiving, putaway & picking, label placement, material handling and

systems integration.

Computers & Desks

Rack Storage

Con

veyer

Rack Storage

53

'-1

1"

30

'-0

"

23'-8"

Bulk Storage (4 Deep)1

4'-

0"

12

'-0

"1

2'-

0"

13

'-0

"

Matrics Readers

RFID Project Challenges

• New and existing RFID products are not necessarily interoperable with other RFID vendor offerings

• Product availability and product development can delay pilots• Many companies are selling RFID products, but total RFID integration

can be a challenge (tags, readers, printers, middleware)

• UHF RFID hardware can interfere with existing 900 MHz RF systems operating within DCs, requiring countermeasures or upgrades

• Specific product & packaging combinations frequently prevent reading of cases at the center of a pallet

• EPCglobal Generation 2 RFID Standard Ratification Date ???• 6-12 month product development cycle after EPCglobal Gen. 2

approved• ROIs for RFID technology deployments can be difficult to obtain• Data management (EDI, visibility, order management) is not currently a

requirement from mass retailers even though this will be important

Exel Client RFID Activities & Observations

• Mass Retailer RFID mandates have generated the following:– Manual “slap & ship” of RFID tagged skus– Semi-automated tagging of skus (e.g. conveyor augmented solutions)

• Automated/semi-automated RFID tagging solutions need scalability and flexibility as part of a long-term solution

• SKU quantities used in RFID trials have been limited (20 or less typ.)

• RFID tagging is being pushed further into the supply chain based on the difficulty and expense of RFID tagging products at the plants

• Asset tracking is the primary means of deploying RFID outside of current mass retailer mandates

• Outside of the Retail/CPG Market activities, Pharmaceutical and Technology Market RFID applications are on the rise

• Exel has been and continues to be brought into RFID projects to assure operational viability and proper execution of RFID projects

QUESTIONS ???