1 Welcome RFID: The Future of Intelligent Logistics February 10, 2006 Heljä Salomaa, Logistics Director, Finland Post Tomi Pienimäki, Chief Technology.

1

Welcome

RFID: The Future of Intelligent Logistics

February 10, 2006

Heljä Salomaa, Logistics Director, Finland PostTomi Pienimäki, Chief Technology OfficerMika Lindholm, Business Development Director, Capgemini Mark Prichard, Product Director, EMEAIan Broughton, Business Development, EMEA

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Agenda10:00 – 10:05 Welcome

10:05 – 10:20 BEA: OverviewMark Prichard, Product Director, BEA Systems

10:20 – 10:50 Finland Post: RFID: Providing Information not Data for ‘Intelligent Logistics’Heljä Salomaa , Logistics Director, Finland Post Corporation

10:50 – 11:05 The BEA Approach to RFIDIan Broughton, Business Development, BEA Systems

11:05 – 11:25 COFFEE BREAK

11:25 – 11:50 Proven Process of DeploymentMika Lindholm, Business Development Director, Capgemini

11:50 – 12:00 The Future is ‘Intelligent Logistics’Tomi Pienimäki, Chief Technology Officer

12:00 – 12:30 Q & A / Lunch

12:30 – 1:30 Tour (optional)

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BEA Systems: Overview

February 10, 2006

Mark Prichard, Product Director

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Company Overview

Who We Are & What Do We Do:

World leader in enterprise infrastructure software

Simplify enterprise computing

Improve business responsiveness through a service-oriented architecture (SOA) approach

The Objective: Align IT with business needs – providing the right information to those that need it.

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Company Background

Customer Base & Financial Strength & Stability

> $1B in Sales

31 consecutive quarters of positive cash flow

15,000+ customers worldwide, including majority of Fortune Global 500Acquired more than 30 companies in 10 years: including ConnecTerra for RFID

Global Presence

75 offices in 36 countries

Over 3,000 employees

Strategic Industry Influence

More than 1,300 systems integrators, independent software vendors, and application service providers

Driving innovation into standards – Active EPCglobal Member

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Service Orientated Architecture: The Power of a New Approach

Support CustomersEngineering

General ServicesEnterprise Applications Databases

SalesB2C PartnersB2E

Shared Services Management and Security

Standards-based Connectivity

Shared Application and Business Services

“Service-Oriented Architecture is an IT strategy that organizes the discrete functions contained in enterprise applications into

interoperable, standards-based services that can be combined and reused quickly to meet business needs.”

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RFID Within the SOA VisionINFORMATION

RE-USABLE SERVICES

INFORMATION INFORMATION

INFORMATION INFORMATIONINFORMATION

RE-USABLE SERVICES

RE-USABLE SERVICES RE-USABLE SERVICES

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Alignment of RFID with an SOA Strategy

Allows RFID ‘data’ to be enriched and delivered as ‘information services’

Build once, re-use many times - leverage existing RFID services e.g. workflows to highlight mis-shipments through a portal

Reduced development times for new projects – RFID Accelerator Kit

Reduces cost and risk for integration with internal systems such as WMS & ERP as well as external data repositories.

Allows business to respond quicker to new RFID requirements that demonstrate value & relevant information for intelligent logistics.

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Finland Post Corporation

RFID: Providing Information not Data for ‘Intelligent Logistics’

February 10, 2006

Heljä SalomaaBusiness Director in Logistics

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Finland Post Background

Distribution network, post offices

Finland Post Group

Messaging€808,0 million

Informationlogistics

€176,0 million

Logistics€254.1 million

Net turnover of €1235,2 million

• 23,297 postal employees

• 2.6 billion items per year

• 7000 standard delivery routes covered/day

• 2.5 million delivery addresses

• 25 million parcels per year

• 5,500 vehicles

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Three Key Trends inOperating Environment

Inter-nationalisati

on

Digitalization of processes

Enhancing operationefficiency

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Challenges for Posti’s Businesses

Customers and other operators are expecting increasingly detailed and proactive information on supply chain status

Finland Post is constantly looking to improve operational processes that improve customer service and reduce costs

Physical or electronic delivery Recipient

Delivery process management

Information management

Sender

I N T E L L I G E N T L O G I S T IC S

Client bases Databases Profile data

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Background to the Pilot

Initial RFID discussions took place 18 months ago

BEA wanted to understand Finland Post’s thinking on RFID and its potential uses within their environment

Was Reusable Asset Tracking an issue and did the business case stack up?

Capgemini & BEA’s RFID assessment included:

Prove the business case existed around Reusable Asset Tracking

Provided answers to the following questions:

1. Is there a business case?

2. Will it give Finland Post the information it needed?

3. How could it be deployed?

4. How long would it take?

5. How much would it cost?

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The Business Case: Developed Around…

Reducing Shrinkage

Losing over 17,000 cages per annum

1.3 million euros per year in replacement costs

Increasing visibility of roll cage movements:

Major dwell times of roll cages at customer sites

No visibility of cycle times

Increasing availability and utilisation of the assets

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Improving customer service at peak times.

SLA’s were suffering due to lack of these assets

Opportunity to uncover ‘Value Added’ services

The Business Case: Developed Around…

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Project ScopeThe project was carried out by Finland Post in co-operation with Capgemini and BEA Systems Oy

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Objectives of the Pilot

To evaluate the technologies and pilot RFID process To use RFID technology within the production process as standalone systems (i.e. without integration into the normal production systems)

How well would the technologies work:Functioning of tags, antennas, readers (Long range and hand-held)

Usability of hand-held readers (software and hardware)

Endurance of readers and tags in the different climatic conditions

Determine the best options for tags, packaging and tag location on Roll cages

How to attach the tags as easy and fast as possible

Minimize breaking and losing the tags

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Objectives of the Pilot

Identify Roll Cage MovementsIncrease visibility of roll cage movements:

Identify dwell times of roll cages at customer sites

Obtain info about how long a roll cage had been in service

Increasing availability and utilisation of the assets

To take the data from the readers and expose that as information – to identify:

Usability and usefulness of collected tracking information

Added value of new collected information compared with present tracking information

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RFID Pilot Layout & Process:3 Doors and 300 Tagged Roll Cages

Sorting areas

Transport routes

Roll cages movementin the Post Terminal

Long range readers

Pilot Roll cage storing

Post office

Helsinki Post Terminal

Logistics Centre, Vantaa

1

CustomerHand-held readers

2

3

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Pilot Environment: Read Rates

UHF RFID portal was used to track Roll cages automatically

100 % reception with every long range reader tested,

Tags designed especially for Finnish Post metal Roll cages

93% of empty trays (plastics letterboxes) inside of a Roll cage with standard tags were seen by the readers (without optimizing the tuning or antenna design of the letter box tag)

some changes to the tag would enable 100% reads

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Overview of Technical Architecture

The BEA RFID Solution

WLANWLAN

WLIWSRFID Device

Edge-Server

DB Control CustomControl

JPF

BEA WebLogic Portal Server

BPM

RFID tags

FixedTag

Long range reader

HHT reader

DB

LAN

BEA WebLogic Integration Server

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Data Collected in the Pilot

In the pilot limited amount of information was collected:

Day and time

Driver id

Roll cage id

Customer id

Event

pick-up / delivery

load / unload

empty / full Roll cage

License plate on the tag – cheaper & more secure

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Benefits

Improve asset management through visibility

Reduce total cost of ownership

Improving control, availability and maintenance costs

Ensuring assets in the ‘right place, right time, right quantity’

Accurately charge customers for their use of roll cages

Analytically information on:

Asset cycle times

Dwell times

Utilisation rates

Shrinkage points

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Turning Data into Meaningful Information

Finland Post now has total visibility of roll cages

Information is available via the online portal providing information such as:

Circulation of Roll cages

Number of events per customer or per route

Number of Roll cages per customer during a day

Demand of Roll cages per day / week / route / customer

Example Portal Information >>

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Summary of Roll Cages at each site.

Ideal for identifying those customers who are hoarding roll cages.

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Finland Post: Operations Portal

This screen shows individual roll cage events for a given tag id

It can be used to track the movements of an individual roll cage.

Provides information on error tracking and helps with rollcage hunts.

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Long Term: Posti’s Answer to Customer Expectations

2005 20zz20xx200x

RFID process pilot with Roll cages

Implementation of RFID everywhere in Finland – to every Post Terminal and all kinds of containers

RFID tag in deliveries (e.g. parcels, value letters), increases transparency of the process

Process control

with RFID,

guidance and

sender information

storage in the tag

Time

Benefits

Shared standards

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The BEA Approach to RFID

February 10, 2006

Ian Broughton, Business Development, EMEA

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Mission for RFID

RFID Mission

INTEGRATED

COST EFFECTIVESTEPS

SCALEABLE& RE-USABLE

RFIDPLATORM

TARGETEDSOLUTIONS

3021 of the these companies use BEA products21 of the these companies use BEA products

Why Is BEA Investing In RFID?Many existing customers want a single sw infrastructure vendor

Retail Federal

USArmy

USDHS

USAF

UKHMRC Schering-

Plough

Pharma

USDLA

• Counterfeit Reduction• Diversion Control

• 3PL Services• Asset Tracking

• Supply Chain Visibility• Asset Tracking

Standardize on WebLogic

• Reduce Out-of-Stocks• Reduce Shrinkage

Logistics

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Solution Framework

SUPPLIER

RFID HARDWARE

BEA WEBLOGIC INTEGRATION

ACCELERATORKITS

ERP

BEA EVENT REPOSITORY

SCM

EPC

ONS

OMSWHM

EVENT ENRICHMENT

ANALYTICS

CUSTOMER

PORTAL B2B

BEA WEBLOGIC PORTAL

BEA WEBLOGIC RFID EDGE SERVERFILTERING DEVICE MGTCONNECTIVITY

BEA WEBLOGIC ENTERPRISE SERVERDATA MGT LOCATION SERVICESTAG PROVISIONING

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Market Analysis

$26.23 billion Global Market*

$2.71 billion Global Market*

Contributory Factors

2006

2016

Reducing Tag/Inlay prices

Reducing reader prices

Increasing Focus on the Business Case and less on Market Hype

RFID Forecasts, Players & Opportunities 2006 – 2016,

IDTechEx

* = includes software & services

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Focus on Business Case / ROI

RFID Market Research, 2005. Conducted by KRC Research on behalf of BEA Systems

Which of the following do you think your company would be focused on most in implementing RFID? (%

saying…)

2%

9%

10%

12%

13%

16%

26%

Other

Process change

Tech issues relatedto implementation

Organisationalchange

Cost of RFID tag

Establishingbusiness case

Ensuring ROI

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Small Steps Lead to Big Benefits

Understanding & Awareness of RFID & where it could be used with

chance of positive business case

Investigate Business Case

Achieve Simple RFID Proof of Concept

– no integration

Pilot the Process – with integration and supporting infrastructure

Awareness &Understanding

RFID Assessment

RFIDLaboratory

Wide ScaleDeployment

PilotIntegration

Cost, Effectiveness & Value

Time & Experience Required

1

5

3

4

2

Roll-out and Collaborate based on Information not Data

Repeatable Deployment

Low CostLow Risk

…but in which direction?

A journey of a thousand miles begins with a single step. Lao-tzu, The Way of Lao-tzu

Chinese Philosopher (604 BC - 531 BC)

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Assessment & Laboratory

HardwareTechnologyDefinition

OperationalProcesses

Benefits &Cost

Development

Assessment – Flexible Phase Approach

Laboratory /Pre Pilot Study

Progress to Pilot & Then Roll Out

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What Questions Does this Answer?

Quite simply:-

1. Is there a business case?

2. Will it give me the information I need?

3. How can it be deployed?

4. How long will it take?

5. How much will it cost?

1. GO2. NO GO

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Coffee Break

February 10, 2006

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Proven Process of Deployment

February 10, 2006

Mika Lindholm, Business Development Director, CapgeminiMark Prichard, Product Director, EMEA

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Transformation ConsultingTransformation Consulting• Business

• Technology

Architecture ServicesArchitecture Services• Systems Architecture

• Solution Design

Systems IntegrationSystems Integration• Application Packages

• Development & Integration Services

• Data & Content ServicesInfrastructure ServicesInfrastructure Services• Systems Engineering

• Network Engineering

• Security

Business Business

OutsourcingOutsourcing• Business Process

• Outsourcing

IT OutsourcingIT Outsourcing• Applications Management

• Infrastructure Management

• Network Outsourcing

OTACEOTACE• Over 94% on Time

• 92% meeting or exceeding customer expectations

ASE/ADC Design Shop ASE/ADC Design Shop TM

Process ConsultingProcess Consulting• Customer Relationship

Management

• Supply Chain Management

• Finance & Employee Transformation

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1.

Post Office.

2.

Distribution Centre.

3.

6.

4.

Vehicle Loading @ Distribution Centre.Scanned Out using

Handheld Scanners & Scan-In through

Portals Gates

5.

Sender

Vehicle UnLoaded.

Scan-Out Full Roll Cage Deliveries& Scan-In

Empty Roll Cage

Collection

In-Transit

Finland Post: The RequirementInternal Process Control not part

of the initial Pilot. Roll cages are not

lost here!

Pilot focuses on activities that are

outside direct Posti Control.

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The process of moving forwardRFID is not like purchasing a new HP printer that can be taken out of the box connected to a PC and it works. Select a reliable experienced partner to guide you through an RFID adoption programme.

You need to understand the technology before you can exploit it.

Business case development (barcodes will be around for many years to come), take it in baby steps… Realise benefits and progress to next stage.

Do not select RFID based on price. Your environment, your processes and business applications will dictate the RFID technology selection that’s right for you.

Do not under estimate the importance of Operator training.

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Assessment & Laboratory

HardwareTechnologyDefinition

OperationalProcesses

Benefits &Cost

Development

Assessment – Flexible Phase Approach

Laboratory /Pre Pilot Study

Progress to Pilot & Then Roll Out

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Assessment & LaboratoryWhat Areas Were Covered?

Roll Cage Uses.

Roll Cage Dimensions.

Roll Cage Handling.

Roll Cage RFID Reader Considerations (I)

Roll Cage Potential Tag Positions.

Roll Cage RFID Reader Considerations (II)

Roll Cage Typical Damage.

Post Environment.

Roll Cage RFID Recommendations.

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RFID: Key message.

RFID Tags & Readers are very complementary, they will happily work alongside other Auto-id and RF wireless technologies. In combination with other such technologies, very compelling IT solutions are possible providing business users opportunities to track and trace assets and obtain real-time data not previously possible with barcode technology.

GPS Technology

Auto-id Technology

GSM/GPRS Technology

• RFID Reader Software • Application Software (WMS/Track & trace etc).• IT Infrastructure • EAI Integration• Business Process Transformation• Financial Transformation

RFID is simply a very good enabling technology

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RFID: The Future is ‘Intelligent Logistics’

February 10, 2006Tomi Pienimäki, Chief Technology Officer

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Themes for Technology Adoption

Location Based

Systems

Solutions For Reaching

Production

Efficiency

Emerging Opportuniti

es

Mobility

Enabling Innovativ

e Customer SolutionsIntelligent

Logistics

Event Manageme

nt

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Combining RFID, Location Based Systems and 2-D symbols

RFID and Location Based Systems will be essential technologies in the futureRFID should be combined with other technologies: Location Based Systems, 2-D symbols (and barcodes)

=> Comprehensive technology roadmap

Posti Strategy: Small scale deployments as technology matures

Piloting technologies with limited investments would ensure competitiveness in the future

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RFID Usage Areas and Effects in Posti

RFID FoundationProcess control, efficiency and quality

Removing manual work,Efficient work governance

RFID in Posti

Transportationfacilities tracking

Transparency- Shipment tracking

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RFID Roadmap Draft: 2006-2010

•Wide tracking of transports and shipments•Process control and optimization•Dynamic process control

• Tracking of selected shipments on item level

• Real time tracking and reporting of shipments and transports for clients

•Tagging of other transport units• Wider integration to customer processes

•Technology roadmap•Demo-/test environment to gen2 level•Architectural readiness•Tracking of selected transportation units•Tracking of high value deliveries

2008

2009

2010

2006 - 2007

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Summary of Morning Session

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In Summary

BEA is committed to RFID

Scaleable & robust infrastructure is central to a successful RFID deployment

Transform RFID data into relevant & timely information to improve decision making

Use a proven process of deployment

Experienced & knowledgeable partners are a must to make it happen.

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Q & A / Tour

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Tour: A Top Level Overview

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RFID Pilot Layout:3 Doors and 300 Tagged Roll Cages

Sorting areas

Transport routes

Roll cages movementin the Post Terminal

Long range readers

Pilot Roll cage storing

Post office

Helsinki Post Terminal

Logistics Centre, Vantaa

1

CustomerHand-held readers

2

3

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Lunch & Close

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Portal Reader & Antenna

Antenna & Reader Portal LED Counter

BACK

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Handheld Readers

Roll cage tag

Customer’s Tag

Hand-held Terminal

BACK

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Posti Roll Cages

BACK

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Posti Roll Cage DimensionsSIDE VEIW FRONT VEIW

15 mm

35 mm35 mm

14

25

mm

15

60

mm

835 mm

680 mm

505 mm

520 mm

Wheel diameter100 mm

135 mm

BACK

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Delivering small and large format letters.

Delivering letter transportation units.

Posti Roll Cage Uses

Plus a Variety of other Consignments.

BACK

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Posti Roll Cage Handling

There are numerous Roll cage weighing and ‘tipping’machines in operation.

Roll cages are moved with speed and in numbersusing a range of fork lift trucks. From this pictureit can be seen that up to 12 empty Roll cages canbe moved at the same time using a single vehicle.

BACK

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Posti Roll Cage Typical Damage

Roll cage ‘base’ becomes saturated with snow/ice after being left outsidefor prolonged periods. The base and wheels have to be replaced regularly.

BACK

63

Roll Cage Potential RFID Tag Positions6 RFID tag positions have been considered;

SIDE VEIW FRONT VEIW

135 mm

15

60

mm

Position 6.

Position 3.

Position 1.

Position 2.

Position 4.

Position 2.

Position 3.

Position 5.

BACK

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RFID Reader Considerations.Read Range & Speed

Distance from Reader to tag.

Size of portal to be covered by reader.

Tag read data requirements (i.e. how much data stored on tag).

Maximum speed the tag will pass the reader.

Anti-collision requirements.

Number of Tags in the reader ‘field’ to be read at the same time.

Reader Position/Environment.

Mobile or fixed position.

Local environment, floors, ceiling and wall construction.

Potential sources of RF interference, inc. items tags attached to or being moved on.

RFID Tag Type

Passive or Active. Low Frequency (125KHz to 134KHz), High Frequency (13.56 MHz), Ultra High

Frequency (868 MHz) or Microwave Frequency (>1GHz).

BACK

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Read Range, Speed & Anti-Collision Requirements

Helsinki Post Office Posti Vehicle Roll Cage Stacking

BACK

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Reader Position/Environment

Large metal pipe-work, electric motors, metal roller doors, Electric Fan heaters with large metal heat exchanger matrix, power cables etc….

BACK

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RFID Recommendations.

Tag Position on Roll Cage.

We recommend that Position 5 and 6 should be evaluated within the Posti

operational environment. The RFID pilot will aim to establish the ‘read

performance’ based on the tag position and ability to address the RFID tag by

Posti operators.

We recommend UHF RFID technology to be deployed by Posti

UHF (868.5 MHz).

The RFID technology selection criteria has taken into account many factors,

including the operational and ‘physical’ specification requirements identified

during the Posti process reviews. Most importantly it has taken a view of the RFID

technology support and purchase costs for both readers and tags both today and

in the future.

Position 5 Position 6 BACK

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Review of assets/containers & compatibility with RFID

Tag positioning and tag attachment methods

Definition of RFID tagging strategy (when/who/how)

Reader requirements - read range and read speeds

An outline RFID IT architecture definition

Existing data collection technologies with recommendations for RFID integration

AssessmentHardware Technology Definition

1. GO2. NO GO

Back

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Current Process Map and Procedures

RFID Enabled Process Map and Procedures

GAP analysis

Review security, along with operator training

Health and safety issues - strategies comply with corporate strategy and legal requirements.

How is the change going to be managed?

RFID Operational Processes

Assessment

1. GO2. NO GO

Back

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RFID hardware technology costs (pilot/roll-out)

RFID software integration costs (pilot/roll-out)

RFID implementation costs (pilot/roll-out)

RFID Business benefit definition, immediate/future development

A total investment summary for both Pilot and roll-out implementation

RFID Benefits & Cost Development

Assessment

1. GO2. NO GO

Back

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RFID Laboratory/Pre-Pilot Testing

Objectives

Establish best performing hardware vendors

Appropriate tag format, position & mounting method

Assessment of readers to track other items using a range of operational scenarios.

Stable solution to take on-siteReduce

RiskIncrease

Experience

Back