RFID technology & stds - barcode solutions technology & stds September 29th, ... No Anticollision Pallet/container RPC ... The RFID industry and application standards groups

Wireless pervasive e-Business

© Copyright IBM Corporation 2003

RFID technology & stds

September 29th, [email protected] and I/T architect

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Business Consulting Services


Agenda

• Tag everything• Drivers of RFID adoption• Standards and technology• Challange• As Is• To Be• Questions

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History

IBM first worked with RFID more than 10 years ago and has some of the earliest patents on RF technology.

The concept of RFID systems originated in the 1940s as a means of distinguishing friendly aircraft from enemy aircraft. Large powe red RFID tags, or transponders, were placed on friendly aircraft. When interrogated by a radar signal, these transponders would give the appropriate response to identify the carrying aircraft as “friendly.” This IFF (Identify: Friend or Foe) system was the first obvious use of RFID and present day aviation traffic control is still based on IFF concepts. The invention of the microchip and subsequent technological advances led to the design and use of passive RFID tags.

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Tag everything


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We see opportunities scaling from pallet to item level tagging

Source: IBM Business Consulting Services

PALLET TAGGING

CASE TAGGING

ITEM TAGGING

Low

High

Op

po

rtu

nit

ies

& B

enef

its

6 months Time +5 years

§ Product diversion§ Supplier VMI/replenishment§ Production planning§ DC/Goods receipt§ Put-away§ Inventory Control and storage§ Real-time ATP inventory

§ Inventory reduction§ Labor efficiencies§ Throughput increases§ Case shrink§ Retail OOS§ Demand planning§ Supply planning§ Subcontracting/re-packer

visibility§ Pick, Pack & Ship§ Physical counts Cycle counts§ Consign/Hold inventory

§ Out of stocks§ Store level promotions and

pricing§ Enhanced consumer

experience§ Safety stock reduction§ Unit/item shrink§ Pay-on-Scan§ Consumer understanding§ Product R&D§ Aging/Quality control § Product assortments§ Product recall/warranty

process

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Drivers of RFID adoption


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The retail sector is being shaped by four fundamental driving forces

Increasingly well-informed Comfortable with multi-channel shoppingDemand higher value (personalization) at lower costFickle and explicitly conscious about value exchange

Fundamental Retail Industry Trends and Drivers

Source: IBM Institute for Business Value Analysis

Empowered Consumers

Competitive Darwinism

Technological Tipping Points

Workforce Productivity

Reaching market saturationExpansion across segment and geography boundariesUndifferentiated competitors being killed off

Historically high employee turnoverWide variability in employee and store performanceInformation visibility hampered at key juncturesEnhanced productivity tools difficult to access

Available information increasing exponentiallyDrive toward common infrastructure and seamless integration Emerging transformational technologies

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Standards and technology


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The Auto-ID Center

• The Auto-ID Center was created to develop the infrastructure and standards of an intelligent supply chain using RFID

• The center is an industry-funded research program founded in October 1999 by the Uniform Code Council (creators of the UPC), MIT, Procter & Gamble, Wal-Mart, and Gillette

• It promotes an open, standards-based system that facilitates collaboration among value chain partners

• The base of the Auto-ID system is the EPC – a robust labelingconvention that is embedded into each RFID tag

• Information related to each object (tag) is stored and accessed via the internet

• The Auto-ID center will go back into Auto-ID Labs at the end of October 2003 and the Auto-ID Inc will take over as the registry for the EPC ongoing- this is a global organization sponsored by UCC and EAN

• Clients can become members of Auto-ID Inc by calling Brooke Peterson in the US at 1 617-230-7886

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The sponsors of Auto-ID include leading organizations from a variety of industries – and the list is growing daily

Source: Auto-ID Center

Philips SemiconductorsSAPSiemensSun MicrosystemsSymbol Technologies

AC NielsenCatalina Marketing GroupCheckpoint SystemsIBM Business Consulting

Services

Information Resources, Inc.IntelIntermecMatricsNCR Corporation

Selected Technology Board Members

Sara LeeTargetTesco Stores Ltd.Toppan PrintingUniform Code CouncilUnilever United States Dept. of DefenseUnited States Postal ServiceUnited Parcel Service (UPS)Visy IndustriesWal-Mart Stores, Inc.WegmansYeun Foong Yu Paper Manufacturing

Abbott LaboratoriesAhold USABest BuyCanonCHEP InternationalCoca-Cola CVSDai Nippon PrintingEAN InternationalEastman KodakGillette Home DepotInternational Paper

Johnson & JohnsonKellogg’sKimberly-ClarkKraftLowe’s MeadWestvacoMetroMitsuiNestlePepsi PfizerPhilip Morris USAProcter & Gamble

Current Board of Overseers (as of April 15, 2003)

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EPC is a Standardized Naming Convention that is Embedded on the RFID Tag in the Auto-ID solution

EPC of each shipment

EPC of each pallet

EPC of each case

EPC of each item

01.00142F.001COE8.0010298730

01.000142F.001COF3.0000319280

01.000A571.003459.000E9FC61B

01.0016CA2.000104.0000005910

…and is flexible enough to capture identification information at any level

The EPC can catalog over 1.3x1016 discrete items annually (about the number of grains of rice consumed globally each year)…

21.203D2A9.16E8B8.719BAE03C

Version — 8 bitsMfg. — 28 bits(> 268 Million)

Product Class — 24 bits(> 16 million)

Serial Number — 36 bits(> 68 billion)

Source: Auto-ID Center, IBM Business Consulting Services analysis

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Internet

The EPC is Passed from the Reader Level, Across a Network Where Greater Levels of Data Relative to an Object is Stored

Electronic Product Code (EPC) – As every car has a Vehicle Identification Number, each item could have an EPC - a distinct, 96-bit code with the flexibility to track shipments, pallets, cases, or individual items

RFID Tags and Readers – Readers reach out for tags with radio waves, which activate the tag to send back its EPC

Application Systems

Physical Objects with EPC Enabled

Tags

Reading Systems

(Interrogators)

Open Architecture Middleware

RF Transmission

ONS Server

Product Information

(PML Format)

1

2

3

4

1

2

3

4

Object Naming Service (ONS) – A server that receives the EPC through middleware and links it to an internet address where much more detailed information about the object is located

Physical Mark-up Language (PML) – A standard vocabulary for all product information – location, shipment history, interactions, movement, etc.

The Auto-ID System

The Auto-ID system provides an open environment that facilitates collaboration among many business partners in the product value chainSource: Auto-ID Center, IBM Business Consulting Services analysis

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The GTAG initiative

ReaderTag

GTAG complements and in fact relies to some extent on the RFID center’s EPC work to provide the base item numbering schema

1 2

The GTAG initiative has four elements:

Harmonization of frequency and power level regulationsDevelopment of standards for interoperable tags and for the air interfaceDevelopment of standards for data management on the tag, and Technology pilots

21.203D2A9.16E8B8.719BAE03C3

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GTAG technology

GTAG has chosen to specify high-frequency tags and air interface, leaving much of the reader specification to manufacturers

The driving objective is that a GTAG compatible reader from any vendor can read any GTAG–compliant tag from any vendor

GTAG has chosen Ultra High Frequency (UHF) spectrum in the 860 – 930 MHz range§ This high frequency tag specification has the advantage of higher relative read ranges and some immunity to

metal or moisture barriers§ This spectrum also has the best chance for global harmonization or frequency and power regulations

Readers specifications and application interfaces are largely left open by GTAG§ Readers will need to comply with the specifications for air-interface (to the tags), but may interface with

controlling applications as manufacturers see fit§ There may be an API published in the future to guide reader interface standards

GTAG pursued the vision of separating the data carrier technology from the data content§ GTAG prescribes the data carrier format, relying on others (such as the Auto-ID Center with their EPC) to

establish data formats which will drive adoption§ Data formats are thus free to evolve independently of the data carrier format

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Tag technology

There are a number of RF ranges for tags, including: 100-140 kHz, 13.56 MHz, 862-928 MHz, 2.45 GHz–each have specific market applicability

Frequency Capabilities Applications

125 kHz

Read Range - up to 18"Good Penetration in Moist EnvironmentsSlow Data RangeCostly TagsNo Anticollision

Pallet/containerRPCWindshield decalLabel insertsCredit card

13.56 Mhz

Read Range up to 3'Good Penetration in Moist EnvironmentsPoor Performance in Metal EnvironmentsMany Standards in Financial MarketAnticollision (10-40 tags / sec)

Pallet/containerRPCWindshield decalLabel insertsCredit card

869, 902-928 MHz

Read Ranges up to 15'Fast Data RatesGood Performance in Metal EnvironmentAnticollision (50 tags / sec)Many Standards in Logistics / Supply Chain

Metal mountLabel insert

2.45 GHz

Read Range up to 3'Good Performance in Metal EnvironmentsPoor Performance in Moist EnvironmentsFast Data RatesAnticollision (50 tags / sec)

Metal mountLabel insertHardened tag formatReusable form factor

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Reader technology

There are three basic choices for reader technology – based on the job or type of work to be performed

nEntrances - portalsnConveyors across

assembly linesnPoints of salenOverhead

StationarynHand-heldnWireless or batchnOne-piece or two

piece tagging

MobilenMobile service agent

PCMCIA

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Challange

• Tag everything• Drivers of RFID adoption• Standards and technology• Challenge• As Is• To Be• Questions

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Privacy and security

RFID is a powerful technology. As its deployment grows, industry leaders like IBM have a role to play, alongside customers and

government, to ensure that technology is developed and deployed responsibly. The RFID industry and application standards groups are currently working to address consumer privacy and security

concerns. The clear benefits of RFID technology, both for retailers and consumers have to be carefully balanced and considered

alongside the needs and concerns of the consumer to find beneficial solutions for all parties concerned.

Not everyone should be able to read your Tag. A burglar with a “Reader”.

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Co-operate and using standardization technology

Retailer CPGMany to many relationship

AUTOIDRFID

Open std

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As Is

• Tag everything• Drivers of RFID adoption• Standards• Challange• As Is• To Be• Questions

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Several industry-wide pain points continue to challenge traditional retail business models… (As IS)

Consumers Employees Enterprise/Vendors

§ Anonymous consumers§ Out of stocks§ Shelf searching§ Lost sales/defection§ Price sensitivity

§ High labor costs§ Employee turnover§ Training time & costs§ Overburdened

managers§ Disconnected

applications§ Best practice sharing

§ Manual and error-prone processes § Limited inventory

visibility§ Point to point supply

chain integration§ Reliance on

markdown selling§ Lack of local market

assortment planning

Pain Points

> Industry overview

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To Be

• Tag everything• Drivers of RFID adoption• Standards• Challange• As Is• To Be• Questions

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…and has forced retailers to respond to three key imperatives (To Be)

“Transform theExperience”

“Take outCosts”

“Enable yourPeople”

• Build differentiated market position

• Re-invigorate customer relationships

• Embrace emerging technologies –selectively

• Influence customers during the entire shopping process

• Focus on the core retail business

• Optimize and strengthen supply chain

• Automate interactions with trading partners

• Create common/shared infrastructure

• Integrate applications and data across functions

• Maximize operating efficiency

• Increase employee productivity

• Deliver real-time information to associates and managers

• Enhance employee experience and extend their tenure

> Industry overview

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Our analysis identified many potential benefit areas across the value chain (To Be)

Physical Product Flow

Demand/ Information Flow

PullPull Pull Pull

Sales uplift –readers @ home drive one to one

consumer relationships

Reduced close outs/run offs -improved rollover execution

Sales uplift - improved promotions execution

Transportation savings - reduced internal

transfers

Reduced finished goods inventory

Reduced holdings of RM and

Finishing Supplies

Improved manufacturing reliability - enhanced

production scheduling

Lower net landed supply

cost

Reduced deductions -Automatic POD

Sales uplift - reduced out of stocks via shelf-driven replenishment

Supplier Plant & DC Retailer DC Retail Store Home

Improved margins -identification of sources of

diversion

Improved labor efficiencies

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Questions


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Questions

Documents

RFID technology & stds - barcode solutions technology & stds September 29th, ... No Anticollision Pallet/container RPC ... The RFID industry and application standards groups