Apics 2009

October 20th, 2009

Welcome Nashville APICS GroupWelcome Nashville APICS GroupPresenter:

Paul Reed, President, BRS1585 Mallory Lane, suite 105, Brentwood, TN 37027

615-377-8849 x2903Paul@ThinkBRS.com

RFID OutlineQuestions we’ll cover:

• What is RFID Technology?

• How does it work?• Who currently uses

RFID?• How is RFID being used

today?

• What are the limitations?

• What are the advancements?

• What does the future of RFID look like?

• How do I implement RFID?

What is RFID?• RFID = Radio Frequency

Technology• RFID uses a Radio

Frequency Field to identify a person, animal or object

• It includes an antenna, transmitter and a reader and a tag

RFID offers:• Faster and Unique ID for

track & trace• Security: Not easily

replicated or counterfeited

• Large memory and high read-write

• RFID Tag acts as transmitter with memory (microchip) embedded within

• Types of Tags: o Active: use a battery to

transmit a signal (~500 + ft)o Passive: No battery but draws

power from reader (~50ft)

Components of RFID•Reader: An electronic device used to retrieve data from a tag •Antenna: Receives and transmits electromagnetic waves

How Does RFID Work?

Reader Antenna

Reader broadcasts signal through antenna

RFID

Tag Tag receives signal

Computer System

Reader sends info/data to computer system for collecting, logging and processing

Tag is charged with enough energy to send back an identifying response

• Barcode technology must look to scan, one item at a time

• RFID can scan the chip without visual contact• RFID can scan numerous items (10-100 tags)

simultaneously• Barcode = Sight• RFID = Sound

RFID vs. Barcode

How is RFID used Today?• Supply Chain

Management• Passports or ID cards• EZ Pass on Toll Roads• Access Cards for Security• Airport Luggage• Library Check outs

• Real time inventory control

• Tracking surgical equipment

• Homeland Security• Counterfeit Identification• Ensures Quality and

freshness of produce

• Department of Defense• Healthcare Facilities• Airports• Warehouses• Ranchers (Livestock) • Wal-Mart• Many more

Who uses RFID?

• RFID cannot not easily function near or on o Liquido Metal

• Radio Frequency Interferenceo Too many RF devices can interrupt the signal

• Environmento Outside (extreme cold or heat)

• Readers don’t need line of sight to read tag but can only read in certain area

Limitations

Advancements in RFID• New Tags designed to

function on metal• Tags and readers built to

withstand extreme conditionso Humidityo Extreme cold and heat

• New Equipment with Further Read rangeso 500+ feet

• RFID in Healthcareo Medical/surgical devices,

O.R.• RFID in Fashion

o Counterfeit prevention• RFID in Trucking

o Tire monitoring: pressure, mileage, rotation

• Automated Grocery Store Check outso A World Without Checkout Stations

• RFID Patient locator in Hospitals in case of disaster• RFID teaches the deaf how to sign• Strides towards an RFID robotic seeing eye dog• RFID in Agriculture:

o Use of RFID to monitor strawberry temperatures during shipments

The Future of RFID

• Case Study 1: Chicago Aquariumo RFID Interactive submarine

• Case study 2: Pneumonia in Pakistano Doctors track patients and

symptoms• Case Study 3: Newmont's Leeville Gold

Mine (NV) o Use RFID to track workers and

equipment

Case Studies

• Problem: A medium size Belgian Logistics company was debating the use of RFID but didn’t know the ROI

• Goals:o To deploy the use of Passive Ultra High Frequency Tags

(UHF) that meet the EPC standardso To use a permanent UHF tag for each container

• Advantage: Deployment of RFID typically saves labor cost and reduces error

• Disadvantage: If RFID does not save labor costs near 50% or reduce errors by 10%, the ROI may not be worth deployment

Logistics Case Study Overview

• Step 1:o The Logistics Company tested and recorded their

current shipping and processing time (~ 30-40 shipments/wk)

• Step 2: o The Company then deployed and tested their average

time and shipments with RFID

Logistics Case Study – RFID and ROI

• Total cost for RFID implementation for Logistics Company (i.e. tags, readers, handheld readers, software, training and maintenance) is ~ $172,200

• The average Belgian employee’s salary = $26.05/hr• Cost of 1 employee’s labor for average shipment without

RFID= $69.30 (2.66 hours at employee’s $26.05 pay rate)• Without RFID= 35 containers/wk which equals 1,680

containers/year• 1,680 containers x $69.30 = $116, 424 total annual labor

cost per employee

The Actual Cost without RFID

• Total time for shipment with RFID recorded as 36min. 30 seconds VS. 2.66 hours without (as displayed on chart)

• Total cost for shipment with 1 employee with RFID equals: $15.89 (.61 hours x $26.05)

• Total Annual cost for 1,680 containers = $26,695 (15.89 x 1,680)

• Total Annual Savings = $89,730 ($116, 424 - $26,695 )

The Actual Cost with RFID

ROI with RFIDImplementation Year 1 Year 2 Year 3

Savings in Labor Cost

$89,730 $89,730 $89,730

Implementation Cost

$172,200

Maintenance Cost

$10,000 $10,000 $10,000

Net Savings -$172,200 $79,730 $79,730 $79,730

Solution: Payback period would be around 24 months, meaning implementation of RFID would be a wise decision

• Know RFID Standards • Technological updates found on EPC Global website:

epcglobalinc.org • Evaluate your resources• Determine times for compliance and develop a budget

for implementation• Estimate your ROI for the project• Determine if you want to incorporate a compliance

package (i.e. Wal-Mart, DoD, Metro) with your existing auto tracking

Implementation

Thank YouIf you have any questions about RFID, Barcode Needs or

Custom Software, Think BRS!

www.ThinkBRS.com

Paul Reed, President1585 Mallory Lane, suite 105,

Brentwood, TN 37027615-377-8849 x2903Paul@ThinkBRS.com