Key To RFID ROI: Exploiting The Six Senses Of Visibility V3

Key to RFID ROI:Exploiting the Six Senses of Visibility

June 13th, 2007

Auto-ID TechnologiesAutomatic identification encompasses a wide range of technologies which have as

their purpose the automation of the data entry process. These technologies include:

04/13/23Key to RFID ROI: Exploiting the Six Senses of Visibility Page 2

2D-Barcode

Barcode

Magnetic Stripe

Optical Character Recognition

Magnetic Ink Character Recognition

Optical Mark Reader

Smart Card

Contact Memory Buttons

Voice Recognition

Wireless Auto-IDBiometrics

Cellular+ GPS

Near FieldPassive RFID

Wireless Auto-ID …. aka RFID

SAW Passive RFID

Non-Beaconing Active RFID

FlexPlexRoad Loop Picture Frame

Ceiling

Battery Assisted Passive RFID

WiFi RTLS

UWB RTLS

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Far FieldPassive RFID

Active RFID + GPS

NFC

EAS

ZigBee

Beaconing Active RFID

What Is an EPC?

• A hierarchal numbering scheme that uniquely identifies all objects

• Accommodates current and future numbering methods

• Connects physical objects to computer networks

• Entry point for the EPCglobal Network

• Header– identifies the length, type, structure, version, and generation of the EPC

• EPC Manager Number– business entity responsible for maintaining the subsequent partitions

• Object Class– identifies a class of objects, such as, “Model ABC”

• Serial Number– identifies the specific instance of an object

HeaderEPC Manager

NumberObject Class Serial Number

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Two Innovations: EPC & RFID

• The Electronic Product Code (EPC)– Gives a unique identity to individual physical objects: items, cases,

pallets, locations, loads, assets, etc.

– Open Standards and Architecture for Implementation

• Radio Frequency Identification (RFID)– Cheap sensing of objects

• The Yin and the Yang– EPC enables new, value-creating business processes

– RFID will make those processes practical

EPC

RFID

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RFID: Why All the Excitement?

• Market Events– Wal-Mart, DOD, Boeing, Albertsons, Target, other “Big Buyer” mandates– Dramatic reduction in tag prices (19 to 12.9 to 7.5 cents/tag for orders of 1M+ passive

tags)– Major vendors/providers are entering market/improving offerings (e.g., Cisco, SAP, Intel,

Microsoft, etc.)– Resolution of intellectual property disputes

• Market Size– Research firm VDC Corp: market reached nearly $1.8 billion (2004), will reach $5.9

billion in 2008– The Wireless Data Research Group: market will grow from $1 billion in 2003 to $3

billion by 2007– Frost & Sullivan Research: European market will grow to over €5 billion in 2007

• Regulatory & Standards Events– FDA recommend use of RFID to fight drug counterfeiting and diversion– FAA approval of passive RFID use on aircraft; active RFID presently being studied– EPC global industry standards groups are expanding

• Efficiencies– Cost saving potential to the supply chain– Enhanced security

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What is New Here? …. Emphasis on Visibility

• Emphasis on location and business events, not just automated data entry

• Collaboration with partners via data sharing

• Open Standard driven all the way from interfaces, to system architecture, down to networking concepts

• Action at a distance

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Why Visibility Matters

• Counterfeiting: – Affects 5-10% of all global trade, costing

$350B ($30B for pharmaceuticals alone)

– 192,000+ deaths in China due to fake meds -- increased liability

• Terrorism: – Single container incident could cost $58B

• Theft & Diversions: – Affects 1-3% of goods in the supply chain,

costing $50B/year

– Critical asset loss (financial institution have lost tapes containing customer data)

– Identity theft, new electronic fraud, and increased privacy regulations have increased Financial Institutions’ liability, cost & potential for lost consumer trust

• Volatility & Uncertainty:– Labor strikes at ports could cost $1B/day

– Political risk and uncertainty limits corporate spending by $800B/year

– 20% price fluctuations in steel, manufacturing – “the China effect

• Blind Spots & Gray Areas: – Containers shipped internationally require 17

handoffs;

– Large shippers can’t account for 10% of shipments

• Rising Overhead: – Logistics/transportation = 9.5% of U.S. GDP

• Lost Sales: – Retailers lose 4% of sales to out-of-stocks

• Mandates:– Big buyers: RFID adoption by 2005 for Wal-

Mart, Tesco, Metro, Albertsons, U.S. DoD

– Regulatory: FDA, U.S. Customs, Department of Homeland Security

Growing Global Threats Cost of Complexity

Visibility is a prerequisite for success in a hyper-connected, globalized economy.

You can’t manage or protect what you can’t see.

The most urgent issues and biggest risks can’t be addressed without visibility.

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What is Visibility?

Location

Specificity

State

Compliance

Integrity

Authenticity

1. Location: Where, exactly, is the object at all times?

2. Specificity: What is the object exactly? What is its color, size, expiration date, etc.?

3. State: Has the object been in the proper environment? Is it in a safe/good condition?

4. Compliance: Have all relevant regulatory, trade and documentation requirements been met?

5. Integrity: Has the object been breached or compromised in any way?

6. Authenticity: Is this exactly the product it is supposed to be?

The Six Senses of Visibility

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But Visibility Needs Vary

Location

Specificity

State

Compliance

Integrity

Authenticity

State

Compliance

Integrity

Authenticity

Location

Specificity

Uni

sys

Six

Sen

ses

of V

isib

ility

Aut

o-ID

& R

FID

Cap

abili

ties

arrival / departure, environment, within a building or room, shelf location, specific v&h coordinate

unique ID, description of object, history of it activities, chain of custody, hierarchal relationship

active / in-active, physical condition, static / motion, provisioned

meet regulatory requirements, SLAs, process conformance

breached, improper handling, unauthorized possession

counterfeit or real, proper source, modified

Selection of auto-ID / RFID capabilities is entirely dependent on the visibility needs of the individual business

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Industries Have Different Value Propositions

ProtectThe Patient

ProtectThe Brand

OptimizeThe SC

Life Sciences Value Proposition

Client Specific Requirements

SOXCompliance

EliminateLoss

OptimizeUtilization

Asset Management Value Proposition

Client Specific Requirements

Reduce Outof Stocks

EliminateShrinkage

OptimizeThe SC

Retail Value Proposition

Client Specific Requirements

ReduceBaggage Loss

Real-TimeCargo Status

OptimizeGSE

Air Transportation Value Proposition

Client Specific Requirements

Selection of value proposition is driven by individual client and industry needs and the auto-ID / RFID capabilities need to support & complement

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State

Compliance

Integrity

Authenticity

Location

SpecificityU

nisy

s S

ix S

ense

s of

Vis

ibili

ty

ProtectThe Patient

ProtectThe Brand

OptimizeThe SC

Life Sciences Value Proposition

Auto-ID EnabledCapabilities to Achieve

Business Outcomes

Aut

o-ID

& R

FID

Cap

abili

ties

Client Specific Requirements

Life Sciences Visibility Framework

Timely FulfillmentPerfect Availability

Real-timeLocation / Stock

Status

Near-real timeVisibility and

Physical Control

PositiveProductIdentity

Item / SKU(Packaged)

Management

Visibility / Controlof Lots / Batches

EnvironmentalProduct Quality

Standards

AppropriateHandling and

Storage

EnvironmentalMonitoring alongthe Supply Chain

AutomatedChain-of-Custody

Record

Visibility toAuthorized Sellers

& Trade Req’ts

Ease ofDocumentation ofReg. Compliance

Tamper-evidenceat carton / bulk

levels

ReducedShrinkage / Loss

LocationMonitoring

EPC-basedMass

Serialization

DocumentedChain of Custody

Tag matching to Centralized

Records

1. Unisys integrates Life Sciences business and supply chain requirements to identify Auto-ID capabilities.

2. These identified capabilities are analyzed for value and priority in subsequent steps.

3. Unisys works with Life Sciences company to identify capabilities:

• Interviews

• Data Collection Tools

• Key Performance Indicators

• Analytic Assessments

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State

Compliance

Integrity

Authenticity

Location

SpecificityU

nisy

s S

ix S

ense

s of

Vis

ibili

ty

SOXCompliance

EliminateLoss

OptimizeUtilization

Asset Management Value Preposition

LocationMonitoring

Near-real timeVisibility and

Physical Control

Timely FulfillmentPerfect Availability

PositiveObjectIdentity

PositiveObjectIdentity

ImprovedDemand Planning

Ø ØAppropriate

Handling andStorage

AutomatedChain-of-Custody

Record

AutomatedChain-of-Custody

Record Ø

Ø Tamper Evidenceof Object

AssuredAvailability

UniqueMass

Serialization

DocumentedChain of Custody Ø

Auto-ID EnabledCapabilities to

AchieveBusiness Outcomes

Aut

o-ID

& R

FID

Cap

abili

ties

Client Specific Requirements

Asset Management Visibility Framework

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• The Business Challenge– Last know location of passenger

– Man over board detection

• The Problem– Putting the tag in a wallet or purse

will attenuate the power, making the tag difficult or impossible to read

• Solution Approach– Tag must be very non-intrusive

– Room keycard is the ideal form factor

Source: http://www.shipfoto.co.uk/SouthamptonNews.html

An Example: Cruise Industry

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Location of tag

The Ideal Form Factor An Alternative Form Factor

An Example: 1st Decision is Physics & Form Factor

• Tags antenna infrastructure can exist anywhere on the keycard, as long as it doesn’t interfere with the magnetic strip used for door opening

• Lanyard will encourage the wearing of the keycard

• RF tag will be part of the lanyard (or on card)

• Cannot remove the cardkey without breaking the lanyard

• Pro: Minimal change in current process

• Con: Antenna placement is critical for optimal reads

• Pro: Optimal tag location and allows for other technologies (e.g. active RFID or WiFi)

• Con: Increases price point and conformance could be a challenge

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An Example: The Cruise Ship Challenge

PassengerSafety

BaggageHandling

BusinessIntelligence

State

Compliance

Integrity

Authenticity

Location

Specificity

Last KnowLocation

Last KnowLocation

Association withPeople & Places

PositiveIdentity

PositiveIdentity Ø

Ø ØEvacuation

Confirmation

AutomatedChain-of-Custody

Record Ø

Ø TamperEvidence Ø

Ø DocumentedChain of Custody Ø

Food Safety

Where andHow Long

PositiveIdentity

Temperature

ØTamper

Evidence

Verification ofSource

Uni

sys

Six

Sen

ses

of V

isib

ility

Cruise Industry Value Preposition

Aut

o-ID

& R

FID

Cap

abili

ties

Client Specific Reqmts.

Ø

Fun &Relaxation

Ø

Ø

Ø

Ø

ØEasy and

Personalized Transactions

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An Example:RFID Application Areas for the Cruise Industry

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ROI Opportunities• Search Time reduction will minimize cruise personal distraction from assignment

– Missing Person

– Missing Baggage

• Security reduces recovery time for missing assets and “man overboard” situation

– Correlation of Person to Video Image

– Securing High Value Assets

– Monitor of Restricted Areas

• Supply Chain efficiency could be improved for ship replenishment

– Proof of Delivery

– Out-of-Stock Reductions

– Cold Chain Management and Food Traceability

• Evacuation process can be verified via automation

– Validate Presence at Assembly Area

– Identify Location of Missing Person

• Access Control could be done more efficiently

– Faster Embark / Disembark

“Soft” Opportunities

• Increased Sales– Targeted Product Marketing

• Business Intelligence– Time & Motion Analysis

– Identify Hidden Correlations

• “Touch Less” Processing– Data Gathering at a Distance

– Large Volumes Concurrently Processed

Our Learning's

• RFID is Relevant for Different Reasons in Different Application Sectors– Anti-counterfeiting and diversion in healthcare– Baggage, cargo and parts for airlines– Cold chain management for food products– Etc.

• Take stock of novel RFID technology– Can you exploit the existing WiFi infrastructure– Battery Assisted Tags can provide an ideally compromise between power and price– “Chip-less Tags”, such as SAW, can work under adverse environmental conditions

• Stimulation of business process innovations– Focus on business processes, not the technology– RFID not only makes “things” visible but also makes the underling process visible– For unstructured business processes, RFID show promise

• Mobile RFID can add flexibility– RFID readers for lift trucks, handheld readers, vehicle-mounted readers used with

stationary tags– mounted stationary reader can be constraining to the process and expensive

• Catalysts for the adoption of RFID– Start with a closed looped system where the process is chaotic or the assets have high

value– The initial justification for RFID can be to provides visibility for your client

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Is Visibility the Next Big Thing?

The World Is Flat: A Brief History of the Twenty-first Century by Thomas L. FriedmanFor Audio Discussion: http://www.npr.org/templates/story/story.php?storyId=4600258

“Visibility into the movement of goods is vital to our customers' success … Our

technology integration efforts are focused on enabling our customers to know, with a simple mouse click, if their shipment left

Europe on a plane, or on a ship crossing the Pacific and when it was delivered by truck in

Tianjin.” Dave Barnes, UPS's CIO, Sept 6th 2006 at the fourth annual

UPS Technology Summit

“Enterprises who are proactive and develop a Global Supply Visibility and Performance

Program have had fewer disruptions, reduce inventory and have increased quality over

companies that do not have such a program,”Sudy Bharadwaj, Sept 5th 2006, Vice President of Aberdeen Group.

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Where is my stuff? … Is my stuff OK?

• Visibility is highly valued by all the major industrial verticals because of their complex business operations

• Visibility can help a small business behave “big”

• Visibility provides individual consumers a greater security in there personal lives

I believe in the not too distant future, we will be able to inexpensively track and status nearly anything we care about. We will have near real-time answer to “Where is my stuff” … “Is my stuff OK”. We’ll not only be able to locate our car, pet or cell phone, but our pizza delivery or the power tool we loaned to the neighbor. This will come about because of convergence of emerging location technologies, low power wireless devices, ubiquitous networks, web-based services and standards.

Today we have service providers, service like voice & data from telecos, that are critical enablers. In the near future we will have “visibility Service Providers” who understand that visibility isn’t just data but an assurance to their customer to answer the questions “Where is my stuff” … “Is my stuff OK”.

Jeff IrlandOctober 2006

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Where is your stuff?

Is your stuff OK?