Embed Size (px)
Citation preview
the guide to RFID solutions
The institute has come to the end ofthe first phase of the RFID researchand partner programme instigated onyour behalf in February 2004 wherewe have brought together many ofthe industry leaders who are puttingforward information to educate you asto the application of RFID within thesupply chain.
In recognition of the importance of RFID
and the technologies ability to transform supply
chain operations in relation to visibility and
security euroRFID has been produced in
conjunction with our partners to act as a guide
to the industry and the many solutions now
available to you. Unfortunately some
organisations were unable to meet the deadlines
for inclusion but the guide will be updated and
increased in size and content later in the year
and all partner information is available to
members on our website.
I would like to thank all our supplier
partners and contributors for their assistance in
producing the guide and for the quality of the
information put forward.
The RFID programme will be ongoing
throughout 2005-2006 and we will be keeping
you regularly updated with all developments in
the industry and solutions available.
I trust that you will find euroRFID a valuable
reference source when planning to implement
RFID.
John Connors
Director
EILT
www.eilogistics.org
4 5
FOREWORD www.rfidbusiness.orgINTRODUCTION
Although the basic RFID technologyhas already been part of our life forover 50 years, a majority of thepopulation has not yet taken itsexistence into account. The reason forthis is that the identification of goodsand products through the transmissionof data is done via radio frequencyand cannot be recognized by eyeonly. Many of us, however, havealready unconsciously used theadvantages of this technology, e.g.by using a ski pass at a cablewaystation, by going through the accesscontrol at the main entrance of youroffice, or just by using your car key tostart the engine.
Meanwhile, today there are more than
one billion RFID transponders on the market, used
in many different applications and markets. The
majority are in-house applications called closed
system solutions, where the transponder is used
only for improving an internal process and is not
used outside of the company. Typical closed
loop solutions are found in production steering,
quality control, asset management, access
control, warehouse management and internal
logistics. Those early adapter companies saw a
clear competitive advantage in implementing
RFID and are therefore not willing to publish their
business cases and for sure not to speak about
return on investment.
RFID technology will not completely
replace barcodes within the next few years, but
it will surely continue to be used where barcodes
reach their limitations. Due to the major benefits
of RFID, such as contactless and fast
identification of good and the bulk reading
capability, the implementation of RFID in supply
chain processes becomes very interesting.
During the last five years, RFID technology awoke
from its beauty slumber. Some major retailers
have identified the high potential that RFID
represents for their supply chain processes; they
have become major drivers that have led many
other companies to also strongly focus on RFID
solutions. Meanwhile, the contactless technology
is now seen as one of the most promising
technology trends of the coming years and is
expected to change our lives just like mobile
communication has.
Nevertheless, RFID technology still has
some challenges to overcome. RFID is in its hype
stage, which inevitably involves a wide
spreading of faulty information. First of all, people
must understand that RFID technology will not
solve every problem, as it has its limitations, too,
just like every technology. It is very important for
the future of the RFID market that the
expectations from this technology stay in the
range of the feasible. Secondly, the possibility of
integrating an RFID transponder into a product
for anti-counterfeiting, traceability and after
sales applications brings up the issue of privacy,
which concerns a fair number of people. This
delicate topic is a psychological issue which
cannot be solved by introducing hardware tools
called “transponder blockers” or “transponder
neutralisers”. Only the physical act of destructing
the transponder would give the end customer
the certainty that it is not longer able to transmit
data. In my opinion, the privacy issue can only
be solved by informing end users about the
limitations of this technology. RFID transponders
are not that simple that anyone can decipher
the information on your clothes while you are
walking on the street. There are many technical
limits that protect from abuses. In order to read
and decode the data stored in the chip, many
different conditions have to be fulfilled, such as
the right frequency, knowing the chip type, the
structure of the chip, and last but not least the
interpretation (= decoding) of the information. It
is worth remembering here the time when
privacy was a discussion point with mobile
phones. Today, nobody would renounce to their
mobile phone just because they might be traced
around the world. The convenience has
surpassed the privacy issue. With RFID I see a
similar development within the near future, once
people will be more aware of the many benefits
of RFID applications.
The next few years will be very exciting
for RFID. Additional standards will allow the
implementation of RFID worldwide and will allow
companies to launch open system solutions in
high volume. New manufacturing technologies,
such as with polymers, are promising and will be
able to reduce the price of the RFID transponder
significantly. Speaking about prices, today we
have the classical chicken and egg problem.
The industry is waiting for the volume, and the
market is waiting for the prices to come down.
The development is similar to that of personal
computers: you can always wait for a better and
cheaper one. Also, we can expect high volume
projects to go live within the next years, which will
contribute to reducing the price of transponders
dramatically.
One of the major topics of the coming
years will be integration: new systems will have to
be able to communicate with many different
existing in-house but also external infrastructures.
The transponder will be equipped with an
increasing number of functions and sensors in
order to become more autonomous. The RFID
readers will also become more intelligent and will
be able to form their own network and read
different chip types and frequencies.
To sum up, RFID offers many chances
and opportunities to improve processes if you do
a step-by-step implementation, if you use RFID in
the correct operational processes, if you accept
that RFID is not a „plug & play“ technology, and
if you understand its vast possibilities but also its
limitations. RFID will become part of our life: the
sooner you start to make your experience, the
better it will be. Don’t wait to start – take now the
opportunity to explore the exciting world of RFID.
Stephane Pique
Stephane Pique
Stephane has more than 12 years of experience in RFID
and is a worldwide recognized expert in this field. His
business experience brought him to the unique position
of knowing RFID from all necessary components such
as the chip, the transponder and card, the middleware
and data management up to the complete RFID solution.
Stephane worked with Philips Semiconductors for 8
years culminating in his appointment as business unit
manager for the Identification market in Switzerland
and his role as member of the European core team.
During this time, he also represented Philips in the
Swiss ISO standard committees.
Later he worked as International Sales and Marketing
Manager for a Swiss RFID transponder and card
manufacturer, Nagra ID, which is part of the Kudelski
Group, the world leader in digital set top boxes.
In 2000, he moved to Philadelphia to develop the Global
ID business in North America and then returned to
Switzerland at the end of 2001 to take over the
responsibility of Vice President Sales and Marketing.
Global ID is a provider of complete ‘turn-key’ RFID
solutions and part of the Sokymat Group – the world
leading manufacturer of RFID transponder.
Since 2004, he is Vice President Business Development
RFID at the German software and integration company
SEEBURGER and holds the worldwide responsibility on
RFID.
Stephane is co-founder of the “International RFID
Business Association” and had speaking engagements
at more than ten major RFID events such as Frontline,
RFID Forum, BVLA, BVL, EDIFICE, ID World, RFID
Integration days and many more.
TIBCO . . . . . . . . . . . . . . . . . . . . . . . . . INSIDE FRONT COVER
INTRODUCTION - INTL RFID BUSINESS ASSOCIATION . . . . 3
INTEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PHILIPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SOKYMAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
INFINEON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
X-IDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
METRO GROUP – CASE STUDY . . . . . . . . . . . . . . . . . . . . . 12
TOSHIBA TEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
AVERY DENNISON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PRINTRONIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
DATAMAX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
PAXAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CISCO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ACCENTURE – JUMPSTARTING THE PHARMA CHAIN. . . . 30
SAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
HP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
UNISYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
DABAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SIEMENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
EKAHAU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
CONTENTS
All rights reserved. All trademarks and copyrights in this publication are recognised,and acknowledged where possible. If we have failed to credit your copyright thenplease do contact us – we will happily correct any oversight. Any material submittedis accepted on the basis of a worldwide right to publish in printed or electronic form -be sure to clearly label all discs. All contents © euroRFID. The views expressed in thisissue are those of the contributors and are not necessarily shared by euroRFID.
6 7
www.philips.com
product that doesn’t meet basic quality
regulations and endangers users’ health.
Additionally, copycat manufacturers undermine
prices, limiting legitimate firms’ ability to recoup
research and development costs and reducing
the incentive to develop new drugs. However,
using RFID, each dose can be uniquely identified,
guaranteeing quality and protecting both health
and profits.
Medical practitioners are also looking at
RFID technology to improve the quality,
timeliness and cost of patient diagnostic tests.
With greater automation in pathology
laboratories, problems of recruitment and staff
shortages can be eased. In addition, with all the
data in electronic format from the start,
integration of results into patients’ records is
quicker and simpler.
In the United Kingdom, Proxximity
Systems Ltd. has developed a system using
Philips’ I•CODE RFID technology to accurately
track blood samples. In initial trials at the
Pathology Laboratory of the Portsmouth National
Health Service Trust, Proxximity’s BioTag Positive
ID System has already shown major reductions in
administration time, both during sampling and
laboratory processing. With more than 100 million
blood tests performed annually in the UK and
more than 3 billion worldwide, the potential
rewards from streamlining this process are
immense.
In addition to streamlining the supply
chain and making medical applications safer,
RFID can also protect consumers’ health by
ensuring the food they eat is high-quality. The
livestock industry has experienced a number of
problems in recent years with disease outbreaks,
including foot and mouth and mad cow. As
such, the farming industry has begun to invest
heavily in resources for tracking animals
throughout their lifetime. The U.S. government is
currently reviewing a draft Animal Identification
Plan. In addition, legislation such as that
adopted by the European Council of Ministers for
the individual tagging of sheep and goats using
RFID technology is expected to further its
adoption.
Philips offers RFID technology with a
substantial read range over distances and a high
transmission speed, especially for enabling
accurate, automated livestock tracking to help
provide the basis for secure food supply chains to
the end consumer. For example, a cow fitted
with a Philips HITAG-S-enabled ear tag can be
identified from the rest of its herd as it passes by
an antenna-fitted gate. Information pertaining to
that animal – including vaccination records,
genealogy and place of origin – can be stored
on the chip and downloaded by vets, farmers
and officials alike.
The Philips system allows up to 200
tagged animals in the reader field to be scanned
simultaneously. The scanning of a single tag
takes approximately 6 milliseconds. This
technology is in use today, for example, in Spain
where 2,500 cattle farmers in the largest farmers’
association in the European Union are using it to
track 300,000 animals.
Around the world there is a growing
interest in the use of RFID technology among
libraries. The demands of checking-in and out
thousands of articles, as well as the need to
organize and be able to find item quickly places
great demands on libraries. Contactless smart
label tracking solutions using Philips
Semiconductors’ I-CODE technology have been
implemented by some 200 libraries around the
world. These include new libraries in Singapore
designed to use the latest technology; the oldest
Catholic University in the world at Leuven, near
Brussels, which has implemented an RFID content
management and security system for its library
and others in the UK, the Netherlands and Korea.
Demand for RFID solutions will require
continued investment in the development of this
technology to meet the needs of various
industries. Whether the demand is to ensure a
favorite product is stocked on a store’s shelves or
protecting food and pharmaceutical quality or
enabling people to borrow a popular book.
Philips will continue its involvement in
standards organizations to guarantee that the
implementation of RFID technology is regulated
and privacy issues are addressed. The company
will also work to ensure that customers
understand the issues and benefits associated
with RFID and that system integrators and other
organizations understand how to best implement
the technology to experience optimal effects
and protect their customers’ and their own
private data.
Philips RFID products for supply chain
management and related applications:
Philips specific chip portfolio for smart
labels / tags and readers covers all relevant
frequency bands including 125 KHz, 13.56 MHz,
UHF and 2.45 GHz. Major application areas for
ICODE, UCODE and HITAG ICs are supply chain
management, logistics and retail, livestock
tracking and car security systems. As a driver in
standardization issues, products meet
corresponding standards, including ISO 15693,
ISO 18000, ISO 11784/85 and ISO 14223/1 as well
as upcoming products will meet the EPC
standard.
9
The market for RFID tags which wasworth around $300m worldwide lastyear will be worth $2.8 billion by 2009,research firm In-Stat has predicted.The figures come at the start of 2005,an important year in the developmentof RFID. Major retailers including Wal-Mart, in the US, Tesco in the UK andMetro in Germany have announcedthat they will require logistics andsupply chain systems to have RFIDtechnology implementation duringthe year. Retailers are only one of alarge number of industries which haverecognized RFID offers them a hugecompetitive advantage.
Philips Semiconductors has been in the
RFID market since 1988 and was the first to
release an IC compliant with EPCglobal HF Class
1 (Electronic Product Code global), a worldwide
standard driving RFID’s universal acceptance.
With over a billion RFID-based chips sold to date,
Philips Semiconductors is the world’s leader in the
design and manufacturing of contactless chips
used in smart cards, smart labels and tags as well
as in car access and immobilizer systems. Philips’
RFID-based technology is used across a diverse
set of applications – such as supply chain
management and logistics functions, including
pharmaceutical and livestock tracking, as well
as in various transportation applications.
The company offers its RFID technology
as an open platform and is an active promoter of
global standards to build the foundation for
widespread adoption. With new applications in
the consumer retail market on the horizon, Philips
has already built a complete catalog of RFID-
based chip solutions that spans the application
range of smart labels, contactless smart cards,
car immobilizers and the corresponding reader
components.
Philips is also working with privacy
organizations and government officials to ensure
a responsible rollout of RFID in the retail
environment. In addition to participating in
industry dialogs on the topic of RFID and
consumer use, Philips has included a
disablement feature in chips that enables the
deactivation of smart labels when it is desired.
The In-Stat report predicts that the
biggest segment in coming years will be in the
supply chain. Efficient supply chain
management on both item-level and
pallet/case-level results in a superior retail
experience for consumers, including:
• Improved on-the-shelf availability:
Shelves of key items can signal an alert
for replenishment.
• Fresher goods: Improved and controlled
logistics processes enable the more
rapid availability of products.
• Anti-counterfeit protection: Certification
that an item is what it claims to be.
• Transactional speed: Shortened
checkout.
One of the earliest adopters of RFID is
German based Metro Group, the world’s fourth
largest retailer with operations in wholesale,
food, retailing, consumer electronics, DIY and
department stores. In addition to the use of
Philips RFID technology in their Future Store in
Rheinberg, Germany, also their subsidiary,
Kaufhof Warenhaus AG, together with fashion
brand Gerry Weber has recently completed the
first trials of RFID for individual item tracking.
In the trial clothes carrying the Gerry
Weber label were delivered from the
manufacturer to two outlets via Kaufhof’s
distribution centre. The aim was to improve the
interaction between Kaufhof’s suppliers and its
logistics hub. RFID labels – based on Philips’
ICODE ICs – were attached to the clothes at the
manufacturer and tracked to the point of sale at
which time the labels were removed.
Uwe Quiede, project manager, RFID,
Kaufhof said: “The biggest benefits of RFID are in
inventory control, electronic article surveillance
EAS and checkout at the point of sale. With this
system we can have complete visibility of the
clothes throughout the journey from
manufacturing to our department stores.”
In another key industry for RFID, smart
label trials with leading parcel services have
achieved read accuracies of almost 100
percent, compared to around 92 percent using
conventional technologies. Based on a typical
figure of 50 million pieces per year, this represents
a significant reduction in the number of
misrouted parcels. These trials also demonstrated
the mechanical reliability of smart labels, which
are far more physically robust than other
solutions, which can be difficult to read when
affected only by simple scratches. In fact, the
stability of an RFID label ensures they can still be
read even when covered, for example, with
packing tape if the parcel had been damaged
and repaired at some stage
RFID also provides its benefits along the
manufacturing process, such as at Toyota for
instance. Toyota implemented phase two of its
RFID Vehicle Tracking System (VTS) at its South
African vehicle production facility. VTS, which
uses Philips’ I•CODE read/write tags, tracks cars
through numerous vehicle production stages, all
the way through to final assembly. This function is
a significant landmark in RFID application, most
notably because of the use of both reusable and
disposable tags in the same installation. As a
result, fitment and distribution planning greatly
improved and required business information was
received in a timelier manner by distribution
yards.
Similarly, the pharmaceutical industry
relies on the integrity of many forms of data. From
initial drug trials to production and distribution,
RFID’s ability to ensure the validity of data within
the pharmaceutical industry is providing many
new opportunities to reduce costs while
improving both drug safety and the quality of
products.
The high cost of many modern
pharmaceuticals makes these products a
natural target for counterfeiters. Counterfeiters
can supply the market with a substandard
8
RFID – DELIVERING VALUE ALL ALONGTHE SUPPLY CHAIN
FOCUS – PHILIPS
www.sokymat.com
packaging material), prelams, wristbands, and
CCD labels (used mainly in DVD rental stock
management).
The Food and Animal division develops
and produces a wide range of full-duplex (FDX)
RFID transponders designed to identify individual
animals. The product portfolio includes both
standard and customized transponders such as
glass tags, disc tags and electronic units
developed for identifying livestock, pets, fish and
exotic animals. All these products comply with
the ISO standards defined for animal
identification (ISO 11784/85) and have the ability
to conform to any future legislation that might
require the traceability of animals from “stall to
steak”.
Another growth area for Sokymat is the
use of transponders to track fish and exotic
animals. Commercial salmon hatcheries, mainly
in Norway and Chile, use glass tags to collect
data about breeding and growth patterns and
to control the population of Pacific and Atlantic
salmon, and zoos are using the tags to identify
their animals for internal management and
exchange programs. The tags are also starting to
be used to prevent poaching and the
exportation of endangered species and rare
breeds.
The Industry & Logistics division offers an
extensive choice of transponders with different
chips, sizes and types of packaging that can be
adapted to meet various types of requirements
and to produce customized transponders.
A state-of-the art tracking and sorting
system using Sokymat’s Logi TAG family of RFID
transponders is being adopted across the
laundry industry as the ideal solution to upgrade
and gradually substitute Motorola’s process
automation system.
Until recently, it was not possible to
consider the application of RFID transponders on
and within metal. Since 2001, Sokymat has
successfully worked together with its Japanese
partner Hanex Co., Ltd and has succeeded in
making RFID technology work also in metallic
environments.
Radio frequency identification (RFID)
technology applied to automotive tires: the key
to the revolution in tire identification and supply
chain management.
11
Soktmat: +41 21908 0100
Sokymat was founded in 1964 inSwitzerland and in 1977, ÅkeGustafson, co-inventor of the TetraPack brick, bought the company,which was manufacturing coils, microcoils and the machines that producedthem. In the late ’80s, the company’sbusiness shifted from coils totransponders for animal identification.Åke Gustafson invented the “directbonding” technology, whichautomated the assembly of atransponder by soldering the coppercoil of the RFID antenna directly ontothe pads of the silicon chip. Thisenabled the company, which filed thepatent for the technology in 1991, tomass-produce cost-efficienttransponders since the early ‘90s.
This was the start of a knew technology
and explains the very deep knowledge and
experience of the RFID world Sokymat has and
the development of its own manufacturing lines
and patented assembly technologies that make
Sokymat transponders unique.
Milestone:
• 1991 – first automatic production
machine for transponders with patented
direct bonding technology
• 1992 – first generation of automotive
transponders for immobilisers
• 1998 – new structure with Business Unit to
optimize market specific customer
support which are logistics, access
control and animal identification
• 2003 – part of the Assa Abloy Group
which focuses on current and emerging
identification solutions within the RFID
and smart card markets.
• 2004 – Sokymat, Metget and Cubit join
forces under the name of Sokymat and
becomes one of the largest tag
producers in the world providing RFID
solutions
Sokymat has now a production
capacity of 100 million. The company specializes
in RFID transponders and boasts expertise
encompassing all areas of radio frequency
identification, both in terms of frequencies
(125/134.2 kHz, 13.56 MHz and UHF) and in terms
of RFID system components (chips, tags,
antennae and readers). Thanks to its unique
know-how in packaging technology, the
company is capable of designing and
manufacturing virtually any type of custom
transponder, perfectly suited to the specific
operating environment and packaging material
requested by the customer - including metal.
Sokymat, which employs 280 people
worldwide, has both a research and
development centre and manufacturing plants
in Granges - Switzerland, Ronneby – Sweden and
Erfurt - Germany. In addition to its headquarters
in Switzerland, Sokymat has offices in Australia,
France, Germany, Spain, Sweden, the United
States and the United Kingdom, and distributors
worldwide including in Brazil, Canada, Denmark,
Italy, Japan, Singapore and South Africa.
With the three business units access and
security, food and animal, industry and logistics,
the company is present in all the major market
segments that express a strong interest in the
benefits of RFID technology. By adding Cubit’s
expertise in the area of 13.56 MHz RFID
transponders, Sokymat has acquired a
competitive advantage on the side of
technology.
In addition, the company develops tags
for some unusual projects. For example, Sokymat
worked with the U.S. Army to see if RFID tagged
bees could detect landmines. And the company
supplied tags for Panasonic’s RFID-based
personal inventory management solution for
visually impaired people. The system consists of
an RFID reader featuring an integrated voice
recorder and 50 differently shaped tags,
operating at a frequency of 125 KHz. The tags
operate in virtually any environment, so they can
be used to identify bottled or canned goods,
frozen foods, medicines and clothes that can go
in washing machines.
Sokymat’s Access and Security division
develops and manufactures application-specific
transponders for access control, employee time
and attendance tracking, tickets for recreational
venues and public transits, and other security
applications such as e-passports and
identification cards. Its product portfolio includes
ISO cards (compliant with the ISO norm 7816-1,
type ID-I), clamshell cards, keyfobs, E-Units (the
electronic units inside the laminated material –
some suppliers buy the E-Units then add their own
10
SOKYMAT
FOCUS – SOKYMAT SA
Part of this article first appeared in RFID Journal.
www.iq-paper.com
Most companies and organizations are
aware that sooner or later they have to
face the integration of RFID technology
(Radio Frequency IDentification) into their
business environment. Recent mandates
by major US and European retailers, the US
Department of Defense and the FDA, fuel
the discussion about RFID being a
technological revolution to innovate
information landscapes and business
processes. However, as for every other
revolution, it is essential to manage the
risk that comes along with the transition.
RFID solutions have to link the real world
to the virtual representation in IT networks
and systems. Due to the current RFID hype
the capabilities of this technology are
often overestimated and cannot fulfil every
expectation. Another aspect is the
permanent innovation cycle in the field of
RFID and IT.
How to protect your infrastructure
investment long term? How to choose the
right RFID technology and system to
benefit from future innovations? Who will
be responsible when installed RFID
systems do not perform like everyone
promises?
AAddddrreessssiinngg tthhee RRFFIIDD ssyysstteemmiinntteeggrraattiioonn ggaapp
Ident Solutions (RFID) at Infineon
Technologies, an established Top-5
semiconductor supplier and worldwide
market leader in security chip card
products, focuses on successful RFID
solutions including system integration,
products and services in supply chain
management and lifecycle asset
management.
Founded in 2000, Infineon Ident Solutions
has grown to become one of the leading
suppliers of RFID solutions. Our expertise
in this area has been proven through
successful RFID roll-outs in the textile,
high-tech industrial, automotive and
aerospace & defence industries. Our strong
technical team can draw on further RFID
competences from a wide network of
wireless and software capabilities within
Infineon. We are a major supplier into
public sector applications worldwide, and
are an accepted security provider for the
US Department of Defense.
The Ident solutions team has the freedom
to define solutions using the best and
most effective technology available on the
market. Being RFID vendor independent,
we can design tailor-made solutions and
provide full installation, operation and
maintenance services worldwide. We
partner with world leading large scale
system integrators and enterprise
application software companies to create
best value for our customers. Our products
and services bridge the technology gap
between innovative RFID technology manu
facturers and the large consultancies and
enterprise software companies.
AA UUnniiqquuee RRFFIIDDSSyysstteemm IInntteeggrraattiioonn PPllaattffoorrmm
You-R® OPEN is the unique RFID OPerating
ENvironment and system
integration platform. It operates as a
“translator” between the heterogeneous
RFID components and complex IT land-
scapes, from SAP modules to proprietary
software systems.
You-R® OPEN is a dedicated RFID
Operating System that links a company's
existing ERP landscape to the RFID-
supported logistics system. You-R® OPEN
supports the entire RFID infrastructure –
from smart labels to readers, PCs and
severs. This allows integrating RFID
systems into a company's internal ERP
landscape using J2EE, Microsoft .net, http,
C++, XML or PML programming.
Furthermore it is possible to perform
maintenance, diagnose faults and update
the software for the RFID hardware via a
remote connection. You-R® OPEN provides
comprehensive tools and functions to
develop, install, operate and maintain the
best fitting RFID infrastructure.
LLeett uuss mmaannaaggee yyoouurr RRFFIIDD iinnffrraassttrruuccttuurree rriisskk
The success of RFID technology in
logistics applications will depend on
its optimum integration – with all its
advantages and restrictions – into
existing logistics infrastructures. Our
experience in the radio frequency
protocols, IT and RFID logistics process
management uniquely positions Infineon
as a single source provider of RFID system
solutions. Our solutions are
suitable for integration into a broad
IT landscape and are designed for
simple and trouble-free introduction of
RFID technology.
12 13
FOCUS – X-IDENT
Infineon Technologies AG, Ident Solutions (RFID)
Address: P.O. Box 800949, 81609 Munich, Germany
Tel: +49-89-234-81279, Fax: +49-89-234-81130
Email: [email protected]
Website: http://www.infineon.com/rfid
X-ident technology, supplier ofintelligent tickets and labels, realisedtwo projects that give an impression ofthe variety of RFID solutions.
BEEF UP YOUR BUSINESS:X-IDENT TECHNOLOGY WINS A CONTRACT FROM
BELL AG
X-ident technology GmbH has won a
contract from Bell AG, one of the leading players
in European meat industry. Deciding factors
were X-ident’s experience and expertise, not
only in electronics but also in paper and
adhesives. With this collective know-how, X-ident
was best able to meet Bell’s special requirement
that the labels be able to withstand very high
and very low temperatures.
The advantages for Bell: it is now possible
for Bell to record information such as date, batch
number, production line etc. on goods arriving
from the slaughterhouse. Within the automatic
production process, this information can be used
for controlling production and documentation.
Automatic operation, economy through
reusability of the transport boxes without new
labelling (saving of new information is possible)
and complete traceability are the results of
implementing RFID that secure a decisive
competitive advantage for Bell AG.
X-IDENT TECHNOLOGY DEVELOPSINNOVATIVE CARDS:1,000,000 FLEXI PLASTIC CARDS FOR FRENCH SKI
RESORT
X-ident technology together with the
Italian system integrator Alfi, is equiping the
Savoyens ski resort with a ticketing solution for
access control. More than one million tickets will
be produced, each with a security chip based
on HF technology from the French supplier,
Inside. Developed by X-ident technology, the
Flexi Plastic Card is the first card that meets the
demands on price, performance, security and
re-usability. This is why the French ski consortium
Espace Diamant, after critical examination of the
available products, chose to equip the affiliated
resorts of Les Saises, Notre Dame de Bellecombe,
Crest-Voland and Flumet with the powerful Flexi
Plastic Card tickets. The impetus for the
development of the tickets can be traced back
to a new production process at X-ident.
The ticket will be given at the loan cost
of ? 2,00. This amount is paid back after use and
return of the ticket. The use of this handsfree card
is the only way to skiing within Espace Diamant
resorts. For the future it is planned to expand the
card’s functionality.
ABOUT X-IDENT TECHNOLOGYX-ident technology GmbH belongs to
the Austrian Trierenberg Holding, one of the
world’s leading companies in producing paper
for the cigarette industry. X-ident specializes in
laminating transponders in flexible paper and
film material which is marketed under the brand
name IQ-paper®. This includes self adhesive,
electronic labels, tickets and tags for automatic
applications such as access control, item
management, automatic sorting, product
identification, process control and many more.
X-ident technology offers the highest
quality standards, with every product
undergoing a functional test. The company’s key
to success is the core idea “solutions for systems”.
An experienced team of Radio Frequency
Identification (RFID) experts and specialists in the
field of paper/film deliver conceptual ideas for
RFID solutions. For each segment, X-ident
recommends partners: specialists for readers,
printers, system integration and software who
generate innovations based on identification
and information. X-ident has a current annual
production capacity of 160 million electronic
labels per year.
Further information is available at
www.iq-paper.com.
IN CASE OF RFID:X-IDENTTECHNOLOGY
Press contact:
TEMA Technologie Marketing AG
Birgit Merx
Theaterstraße 74
52062 Aachen
Germany
Tel: +49 (0)241 88970 -13
Fax: +49 (0)241 88970 - 42
email: [email protected]
Internet: www.tema.de
Company contact:
X-ident technology GmbH
Martin Vincenz
Kreuzauer Strasse 33
52355 Dueren
Germany
Tel: +49 (0)2421 597-561
Fax: +49 (0)2421 597-327
email: [email protected]
Internet: www.iq-paper.com
Intel, SAP, IBM, and some 40 other collaborators
from the IT, consumer goods, and services
industries1, METRO Group launched its Future
Store Initiative in September 2002. The project
goal was two-fold: first, to bring together the best
of retail merchandising and retailing technology
in support of each other; and second, to test the
new solutions in an actual retail environment. For
the first time, the technologies which will shape
the retailing sector in the future would be
combined and tested under real-world
conditions. “Retailing is undergoing a
fundamental modernization process,” says Dr.
Gerd Wolfram, executive project manager of the
Future Store Initiative at METRO Group. “The
METRO Group Future Store Initiative represents
the convergence of traditional retailing and
emerging technologies, as a strategic initiative.
The objective is to advance innovation in
retailing on an international basis and to increase
customer satisfaction.” By launching the
Initiative, METRO Group took over a leadership
role for the entire retail sector.
MULTIPLE OPPORTUNITIES, CLEARGOALS
With many new technologies
approaching market-readiness, METRO Group
wanted to explore a number of them in an
integrated fashion. Before starting the design of
the Future Store Initiative, METRO Group
established a set of clear goals:
• Utilize technologies to enhance the
shopping experience and measurably
increase customer satisfaction
• Utilize technologies to lower selling and
operating costs
• Explore how wireless technology and
RFID can increase competitiveness
• Explore ways to bring richer information
to shoppers in compelling forms
• Increase employee productivity
Working with its key partners, METRO
Group was able, over a period of seven months,
to design and implement the first “store of the
future” at its Rheinberg, Germany “Extra” brand
location. The Extra Future Store reopened in April
2003, and included multiple new elements.
Though it works seamlessly now, getting these
technologies to work together effectively was
the challenge. The following sections discuss the
solution elements, how the challenges were met,
and the actual impact of these solutions on
customers and on competitiveness.
BEHIND-THE-SCENES ELEMENTS:LOWERING OPERATING COSTS AND OPTIMIZING
INVENTORY
Some elements of the METRO Group
Future Store Initiative are unseen by the
customer, and lower costs by increasing the
efficiency of the delivery chain, from supplier to
warehouse to back-store to product shelf.
Radio Frequency Identification (RFID):
one of the core elements of the METRO Group
Future Store Initiative is the extensive use of RFID.
The RFID goods flow solution uses standards-
based RFID tags as the next generation of
barcode technology. This provides visibility into
inventory in the store and throughout the supply
chain. Product is RFID-tagged at the pallet and
carton levels by suppliers, by distribution partners,
or at METRO Group’s Essen Distribution Center.
From there, all product movement is
automatically tracked by RFID scanning gates.
Scanning takes place when product leaves the
distribution center, as it arrives at the delivery
area of the Rheinberg store, whenever it leaves
or enters the back-store area, and on the shelf
itself. This allows instant inventory management
throughout the supply chain. Using this solution
greatly simplifies ordering, delivery, and
warehousing of merchandise. Realtime visibility
of stock levels allows tighter management of the
supply chain by management, in-store staff, and
suppliers. Based on open standards, RFID systems
are integrated with many different IT
applications. This allows METRO Group to
optimize inventory management and greatly
reduce lost sales due to out-of-stocks.
Smart Shelves: RFID readers built into
display shelves allow automatic tracking of
placement, removal, and misplacement. The
Smart Shelves are linked to the central RFID
goods flow control system, and automatically
notify staff when product needs to be
replenished or refreshed.
Employee Personal Digital Assistants
(PDAs): Wireless PDAs2 allow staff to instantly
connect to store systems to request and provide
information, thus increasing staff productivity
and customer satisfaction. Staff use the PDAs to
access business intelligence, to check stock
levels, to request item information, to trace
goods receipt, to replenish goods directly on the
shelf, for price marking, to change messages on
electronic advertising displays, and to manage
customer requests.
Employee Portal: Staff members have in-
store access to the ‘myMetro’ employee portal.
Based on SAP technology, the portal is accessed
using back-room information kiosks.3 This gives
employees ready access to company
information, scheduling, notices, and training.
Tablet PCs: Fully functional, wireless-
enabled tablet PCs4 allow staff real-time access
to their applications throughout the selling floor.
Enabling staff to spend more time on the selling
floor increases customer contact and customer
satisfaction.
In-Store Wireless LAN: An in-store WLAN5
based on IEEE 802.11b enables all data
communication for PDAs and Tablet PCs, as well
as numerous customer-facing devices, such as
Personal Shopping Assistants, Information
Terminals, and Electronic Advertising Displays.
Over 120 in-store devices are connected via the
WLAN.
Server Hardware: Application servers6
are 2-way and 4-way systems based on Intel®
Xeon™ processors and Intel Xeon processors MP.
The modular design of these servers allows
flexible and cost effective scaling of the server
infrastructure as requirements grow.
Content Bus: The Extra Future Store has
20 separate applications that use content, and
designers realized that managing complex
content over multiple devices and applications
would be challenging. The team developed the
so-called “Content Bus” based on PIRONET’s
Pirobase* content management system. The
content bus integrates structured and
unstructured information, and constitutes a
central information source for applications and
media output within the store.
15
CHANGE ON THE HORIZONRetailers are increasingly aware thatemerging technologies areindispensable in meeting thechallenges facing them. Multiple newtechnologies are poised to changethe industry significantly. Wirelesstechnologies and the increasingpower of low-cost platforms for in-store and warehouse use will changeretailers’ business practices – andeven business models. The promise ofthese technologies is lower costs,more efficient supply chains, andenhanced shopper experiences.There is little disagreement aboutwhether the changes will occur, and awide variety of potential solutions arecoming into the market. But manyquestions remain about when andhow they should be implemented.Broad adoption of new technologiesby a retailer is a formidableundertaking that carries significantrisk.
But as margins continue to get thinner,
retailers are compelled to employ new
technology solutions to reduce operating costs.
Retailers are under relentless pressure to
streamline processes, increase the effectiveness
of sales and marketing programs, and share
information in real time across store, channel,
and system boundaries. Managing inventory well
is vital. Getting key products on the shelf and
turning inventory at or above plan is what makes
or breaks a retail operation.
At the same time, competition and
customer expectations are both increasing,
motivating the search for creative solutions that
deliver a better shopping experience. Customers
are demanding more and more information
about the products and services that a retailer
offers – in all types of retail environments. At the
grocery store, customers want information about
the origin of meat and fish products. At fast food
locations, customers want information about the
nutritional content of various offerings. At
electronics stores, customers want to know
details about compatibility, usage, and the
features and functionality that a product offers.
Emerging technologies hold a key part of the
answer to these challenges. Which technologies
to deploy, and how to deploy them cost-
effectively, are the questions.
TAKING ACTIONMETRO Group is the largest retail group
in Germany and one of the largest retailer in the
world. It operates 2370 stores in 28 countries
across Europe and Asia, which generated more
than €53 billion annual revenue in 2003. METRO
Group wanted to explore how these emerging
technologies might change retailing. The
company particularly wanted to explore wireless,
radio frequency identification (RFID), and rich
content delivery technologies. At the outset
METRO Group was determined to assess the
impact of these technologies on relationships
with their customers and suppliers. Together with
14
IN SHAPEFOR THE
FUTURE OFRETAIL
CASE STUDY – METRO GROUP RFID INNOVATION CENTER
1 For a complete list of participating companies, seewww.future-store.org.
2 Wireless PDAs are based on Hewlett Packard’s iPaq* andSymbol’s PDT-8100 with Windows* PocketPC* 2002 operatingsystem.
3 Employee portal kiosks supplied by IBM.
4 Tablet PCs supplied by Fujitsu-Siemens
5 In-store wireless network and access points supplied byCisco.
6 All application servers are HP Proliant* systems.
7 Loyalty card solution developed by Loyalty Partner GmbH..
8 Wincor Nixdorf developed the overall PSA solution, basedon Fujitsu-Siemens Stylistic* 4110 tablet PC powered by theMobile Intel(r) Pentium(r) III Processor M.
9 The shopper’s location in the store is determined by atriangulation system that analyzes the PSA’s signal strength.
10 Information terminals solution supplied by IBM.
11 Electronic shelf labels developed by NCR.
12 Intelligent scales supplied by Mettler Toledo; “VeggieVision” developed by IBM.
13 For more details on the Intel technologies used, see theSolution Blueprints at www.intel.com/go/retail.
14 For more information on Auto ID Infrastructure, seewww.sap.com/solutions/netweaver/autoidinfrastructure.asp
15 Extensive measurements of customer usage andsatisfaction were performed by Boston Consulting Group.Full results are available at www.future-store.org.
HP, Procter & Gamble, Kraft Foods, Henkel,
Gillette, and Coca-Cola, among others.
INTEL AND METRO GROUP FUTURESTORE INITIATIVE: A PLAN AND ANARCHITECTURE
Intel and METRO Group had a
longstanding relationship, and had worked
together on enterprise solutions before. In the
early stages of conception, METRO Group asked
Intel to help create a plan for incorporating RFID
and WLAN technology into a future store
concept. Intel invested US$4 billion in R&D in
2003, and actively drives transformative business
processes and technologies in numerous industry
sectors, including Retail. Under a 3-month
contract, solution architects from Intel® Solution
Services (a professional services organization
focused on architecture transitions) created a
common solutions framework, and documented
both store and supply chain solutions. This set the
stage for METRO Group’s Future Store Initiative.
Once the METRO Group Future Store
Initiative was launched in summer 2002, Intel was
involved in the overall technology project
management. This included recruiting and
managing the technology partners; developing
detailed project plans and working packages;
and defining milestones, deliverables, and
project success metrics. Here, Intel’s broad
network of relationships came into play. “We
have a unique, catalyzing role within the IT
industry,” says Jon Stine, Intel’s Global Industry
Manager, Retail-Consumer Packaged Goods,
“and our investments in the retail sector are
sizable. So our network of working relationships
with hardware, software, and services vendors
focused on retail is very large.”
Intel had deep relationships with many
hardware and software vendors poised to take
advantage of the advances in store, wireless,
and RFID technologies. Intel alsohad relationships
with key stakeholders in numerousleading
consumer packaged good (CPG) companies.
Intel utilized this network to attract the right
participants into the project. Key technology
providers are IBM, SAP, Microsoft, PIRONET, Cisco
Systems, NCR, Wincor Nixdorf, HP, Oracle, Philips,
Symbol, Fujitsu Siemens, Intermec, Mettler Toledo,
multiQ, Online-Software, and others. Key CPG
companies include Procter & Gamble, Kraft
Foods, Gillette, Coca-Cola, Johnson & Johnson,
Nestlé, and Henkel. With such a large number of
collaborators involved, tight integration of
project plans was crucial to success.
“With a project this complicated,
success depends on solid project management
and just plain hard work,” notes Dieter Kilian,
METRO Group Future Store Initiative Project
Manager for Intel. For example, one of the “use
cases” (an envisioned activity) required that
when an employee updated a price using a
PDA, that price update would be reflected in the
POS system and on the in-store multimedia
displays. Making that happen involved
integrating with Oracle’s 9iRAC* database, with
PIRONET’s Pirobase* Content Bus (to feed the
multimedia displays), with NCR’s Electronic Shelf
Labels, and with IBM’s POS system.
The METRO Group Future Store Initiative
is built, frontto-back, on hardware and software
products that are based on Intel architecture.
Intel architecture offers a standards-based
building block approach, with high
performance, low cost, standardized
components. This results in the greatest flexibility
and very attractive price/performance.
Key elements based on Intel
architecture include:13
• SAP application servers: 4-way rack-
mount Intel Xeon processor-based
servers, 4-way Intel Xeon processor MP-
based servers, and 2-way Intel Xeon
processorbased blade servers.
• PDAs: Based on Intel Personal Internet
Client Architecture (Intel PCA)
processors.
• PSAs: Based on the Mobile Intel
Pentium(r) III Processors – M.
• Content Bus servers: 2-way and 4-way
Intel Xeon processor-based servers.
• Electronic Shelf Label system servers: 2-
way Intel Xeon processor-based servers.
• RFID readers: Based on Intel PCA
processors.
• Network: Based on Intel Internet
Exchange Architecture (Intel IXA)
network processors.
• Desktop clients: Based on Intel Pentium 4
processors.
• Laptop clients: Based on Intel
Centrino(tm) mobile technology.
• Information kiosks: Based on Intel
Pentium 4 processors.
SAP AND RFID: “IN THEORY, IT’SSIMPLE…“
Conceptually, RFID is straightforward: a
passive antenna attached to an item gives item
data to another device. In a real-world retail
environment, the practical issues are numerous.
With extensive expertise in enterprise
CUSTOMER-FACING ELEMENTS:ENHANCING THE SHOPPER’S EXPERIENCE
Attracting customers requires making
the shopping experience convenient, engaging,
and customized. From the beginning, the design
of the METRO Group Future Store Initiative was
approached from the consumer’s perspective.
Their in-store experience is a composite of
merchandise, display,
pricing, location, store
ambiance, access to
information, exposure to
promotion, check out,
and knowledgeable and
helpful staff. Also, each
shopper is unique, so any
capability to tailor or tune
these elements to
individual shoppers will
further enhance the
shopper’s experience.
Many elements of the
METRO Group Future
Store Initiative are
customerfacing, and
bear directly on the
customer’s experience.
Smart Loyalty
Card: An intelligent
loyalty card7 allows the
customer to begin
shopping before they
enter the store. Using a
unique number on their
personal card, a shopper
can use the METRO
Group web site to select
goods that they plan to
purchase in-store. This
electronic shopping list is
linked to their card
number; when they scan
their loyalty card into the Personal Shopping
Assistant mounted on the shopping cart, the list is
shown on-screen. For the customer this means
that selecting items can be done at home, but
they still have the flexibility of browsing in-store.
Personal Shopping Assistants (PSAs):
Touch-screen tablet PCs8 mounted on shopping
carts provide shopping lists downloaded from
METRO Group’s web site, product descriptions
and pictures, pricing information, and store
maps. The PSAs also have a built-in barcode
scanner; if the shopper scans items as they are
placed in the cart, the PSA displays a list of items
in the cart and their total cost. The PSA displays
special offers and advertising (which changes
depending on the shopper’s location in the
store9), and can search for in-store product
locations. The PSA can be personalized for the
shopper by use of the Smart Loyalty Card: the
shopper scans the card into the PSA, which then
displays shopping lists pre-selected from the
METRO Group web site, suggests items based on
previous visits, and displays special offers based
on the customer’s personal preferences.
Electronic Advertising Displays: Multiple
19-inch displays are mounted above product
areas, and offer extensive information and
promotion using video and animation. In the
drug, detergent, and snack areas, 42” plasma
displays run promotional videos and product
demonstrations. All displays are connected to
the Content Bus through the WLAN.
Information Terminals: Customer
information kiosks10 are located throughout the
store, and provide customers with a wealth of
information. The terminals can display a layout of
the store and show the exact location of any
product. Shoppers can get product information,
product reviews, overviews of similar and
alternative products, usage tips, and recipes.
Customers can also sample CD music tracks and
DVD video clips.
Electronic Shelf Labels: Shelves are fitted
with centrally controlled electronic price labels,11
connected through a dedicated wireless
network to METRO Group’s central pricing
system. Price changes are automatically
displayed on the
shelves and in the
POS system, making
pricing updates
instant and reliable.
I n t e l l i g e n t
Scale: Customers
weigh produce using
the intelligent scale,12
which automatically
recognizes the fruit or
vegetable being
weighed and prints
an adhesive
product/price label.
The image
recognition system
uses color, size, and
texture to identify the
item.
Self-Check-
out: Customers have
two options for
selfcheck- out. They
can use a self-service
lane, which utilizes a
u s e r - f r i e n d l y
touchscreen, a
scanner, and a
payment terminal.
Or, if they have pre-
scanned their items
using the PSA
barcode reader, they can “pay in passing” by
using the PSA’s “check-out” function, which
transfers data from the PSA to the payment
terminal.
MEETING MAJOR CHALLENGES WITHKEY PARTNERS
The METRO Group Future Store Initiative
is an initiative of companies from the retailing,
consumer goods, and information technology
sectors. In all, more than 40 different companies
have participated in the Future Store Initiative,
including consumer packaged goods
manufacturers, consulting firms, integrators,
service providers, and software and hardware
companies. These include Intel, IBM, SAP, Cisco,
16 17
used the technologies a minimum of
one time.
• The majority of them indicated that they
are "highly satisfied” with the store.
• Particularly the Self Check-out and the
Personal Shopping Assistant are
becoming more and more popular –
with older customers as well.
• Sales have increased considerably.
Increasing customer loyalty and
increasing revenue per customer have always
been key objectives for any retail operation,”
says METRO Group’s Wolfram. “We are very
pleased with the impact of the solutions we’ve
tested at the Extra Future Store.”
Greatly improved inventory
management: The RFID system can greatly
simplify ordering, delivery, warehousing, and
placement of merchandise. Because the
location of all products is known, the state of
inventory is known instantly, reliably, and at all
times. The location of any item anywhere in the
retail value chain can be known immediately.
Real-time visibility of stock levels allow tighter
management of the supply chain by
management, in-store staff, and suppliers. The
labor cost of inventorytaking has been greatly
reduced. Stock-outs have been reduced, and
reordering can be automatic. Better inventory
management and better item identification
allow METRO Group to more effectively reduce
shrinkage. The number of wrong deliveries (and
the associated cost) ha been reduced.
Higher employee productivity and
better decisions: Putting the right information in
the hands of the customer (through PSAs,
multimedia displays, and information kiosks) frees
staff for other activities, including other
customers. The PDAs and mobile PCs streamline
in-store tasks, help sales representatives to
respond to customer requests on the spot, and
allow staff to spend more time on the selling floor.
The Electronic Shelf Labels reduce the need for
staff to manage pricing updates manually. The
real time inventory system enables better
business intelligence, and allows faster, smarter
retail decisions (such as floor planning and shelf
allocation) by providing real-time access to sales
and inventory data.
Higher program productivity and
synergy: PSAs, multimedia displays, and
information kiosks all promote cross-selling and
up-selling, which increases revenue. Increased
business intelligence enables better product and
promotion decisions, as well as merchandising
campaigns that are more effective and more
integrated. The introduction of new products
and services has been streamlined.
Lower cost infrastructure: Basing the
METRO Group Future Store Initiative on the
standards-based building blocks of Intel
architecture reduces total cost of ownership.
From PDAs to kiosks to mobile devices to PCs to
servers, Intel architecture-based products
provide flexibility while maintaining enterprise-
class reliability and performance. Reducing the
cost of IT solutions allows more solutions that add
business value to be deployed.
FOR MORE INFORMATION
Overview information and detailed
information about solution components within
the Extra Future Store are available at
www.future-store.org
Detailed Solution Blueprints for RFID
and Rich Content Delivery in retail settings
(based on the METRO Group Future Store
Initiative experience) are available at
www.intel.com/go/retail.
For information on Intel’s other
activities and offerings in the retail sector,
contact your Intel representative or see
www.intel.com/go/retail
For more information on Intel Solution
Services, Intel’s worldwide professional services
organization, see
www.intel.com/internetservices/intelsolutionservices
For information on SAP’s other activities
and offerings in the retail sector, contact
Thomas Rhiehmer at
[email protected], or see
www.sap.com/solutions/industry/retail.
For information on IBM’s other activities
and offerings in the retail sector, contact Bernd
Bueker at [email protected] or see
www.ibm.com//industries/retail
Wireless connectivity and some
features may require you to purchase or
download additional software, services or
external hardware. Availability of public
wireless LAN access points limited. System
performance, battery life, wireless
performance and functionality will vary
depending on your specific hardware and
software configurations. See
http://www.intel.com/products/centrino/more_info for
more information.
applications, and long experience in retail
settings, SAP understood this coming into the
project. “In theory, RFID is simple,” says Thomas
Riehmer, Strategic Support Manager for SAP’s
Retail Group. “But not surprisingly, in real
applications, there are a number of issues that
must be managed.” SAP had been working on
pilot RFID deployments since 1999, and was one
of the original members of the RFID Networking
Forum. For the METRO Group Future Store
Initiative, SAP had responsibility for the overall
RFID software architecture for inventory
management.
The first challenge was managing
massive amounts of RFID data, not all of which is
useful. “RFID data must be filtered to remove
both incorrect and repeated ‘reads’,” notes
Christian Koch, Director of Strategic Retail
Program at SAP. “Then it can be useful
information.” SAP built the filtering logic into the
RFID reader drivers. Then the “clean” RFID data
can be interpreted into business logic form.
The second challenge was integrating
the RFID feeds into middleware and the
enterprise inventory application. “You want the
RFID architecture and the enterprise applications
to be integrated in such a way that the back-
end business logic has a ‘long arm’ reach into
the RFID devices,” explains Riehmer. “For
example, if an unexpected shipment arrives at
the loading dock, the staff on the dock need to
know in real time that it’s not expected. That’s
only possible if the inventory logic reaches a long
way towards the reader device on the loading
dock.” This is accomplished by middleware that
connects every device, provides device
management, and generates preprocessed
data to be handed off to the supply chain event
system and other enterprise applications. This
driver set and middleware are the foundation of
SAP’s new Auto ID Infrastructure application.14
The third challenge was creating the application
that would interpret the activity in the supply
chain. SAP designed the supply chain event
management application, which provides
tracking, tracing, and analysis of system events. It
then delivers this business intelligence using user-
specific portals for management, in-store staff,
and vendors.
IBM AND RETAIL: BUSINESS PROCESSAND INTEGRATION EXPERTISE
IBM has deep experience in systems
integration in the retail industry – making
complex sets of applications and devices work
together. IBM also has a 20-year relationship with
METRO Group. “IBM and METRO Group shared a
common vision,” says Dr. Bernd Bueker, Retail
Partner in IBM Business Consulting Services. “We
wanted to create a consumer-driven
environment for the store, focused on delivering
a superior consumer experience and an
enhanced supplier and employee experience.”
Once the project was launched, IBM
was responsible for overall systems integration for
all hardware devices. All of the RFID components
communicate through a single central hub,
developed specifically for the Future Store
application. “This is an extremely flexible
solution,” notes Bueker, “and this is the first time
that a complete network of this technology has
been integrated throughout one entire retail
store.” IBM’s integration expertise was key to
showing that RFID technologies have moved
from the laboratory into reality, and can provide
the cornerstone of an advanced inventory
system supplying real-time information on store
products and sales. IBM also provided the
customer information terminals, which integrate
multiple applications to serve different
departments, and the innovative “Veggie
Vision,” which powers the intelligent scales in the
produce department.
HAPPIER CUSTOMERS, HIGHER SALES,LOWER COSTS
Since the Future Store Initiative was
deployed at METRO Group’s existing Extra store
in Rheinberg, new technology solutions have
yielded positive, measurable results. Richer
customer experience: It is reasonable to assume
that giving shoppers greater convenience, more
useful information, and more interaction would
yield higher satisfaction, but the proof is in
measured results. The reactions and satisfaction
of shoppers have been carefully measured15:
• The number of customers has
significantly increased.
• At least one-third of the customers have
18 19
SIDEBAR – LESSONS LEARNEDBuild an RFID strategy now. RFID is
clearly on its way to broad usage. If retailers do
not build a strategy now, they will be late in RFID
deployment. “Even if it’s preliminary and is not
followed by a pilot, it’s imperative that retailers
begin thinking now about how wireless and RFID
will impact their business,” says Intel’s Kilian. This
strategy should comprehend current RFID
standardization, capabilities, and limitations.
Base wireless and RFID plans on
succinct business objectives and set explicit
goals. Convincing your retail organization to
invest significant resources in new solutions will
require a solid business case with clearly
defined benefits. Integrating wireless and RFID
solutions into existing business processes will be
complicated. Having clearly defined goals will
help keep the complexity from growing, and
keep the integration team focused on the right
activities. In order to determine if the goals are
being met, a retailer must define the success
metrics up front in the planning stage.
Expect new technologies to change
existing business processes. For example, using
RFID tags on cartons caused METRO Group to
have to change the methods by which they
loaded pallets in the distribution center. On the
selling floor, staff had to learn to access
information from the merchandise
management system directly at the shelf using
mobile devices. To the extent possible,
anticipate these process impacts.
Work with technology partners who can
deliver. In many instances, METRO Group faced
the kind of significant technical challenges that
are inherent in first-use deployments. Working
with partners that had deep technical expertise
and significant retail sector experience was key
to solving these challenges successfully and
quickly. Solid project management is essential.
Utilize the expertise that already exists.
Many of the METRO Group Future Store Initiative
partners developed proven solutions through
the Future Store Initiative experience. They also
formed key relationships with each other,
resulting in synergies that will benefit many
retailers. To tak advantage of work already
done, see the section, “For More Information.”
BEYOND TECHNOLOGY PROMISE TOPRACTICAL POSSIBILITIES
In its Future Store Initiative, METRO Group
made a decision to pioneer promising in-store
technologies, on a comprehensive scale and in
a real-world environment. They started with
clearly stated business goals, and worked with
key partners that they knew could deliver. The
value of the technologies available today has
been proven by METRO Group’s experience
since the store opened: new customers,
increased customer satisfaction and loyalty,
higher sales per customer, lower operating costs,
and increased business intelligence. From the
beginning, efforts were designed to be scalable
within the METRO Group system, and plans are in
place now to roll out certain technologies of the
METRO Group Future Store Initiative in other
METRO Group stores.
The close links to the parent companyTOSHIBA releases an enormoustechnological potential, whichTOSHIBA TEC consistently includes inthe further development of newproducts. The objective is to providetrade partners with those productsand solutions which the modern retailtrade requires to implement newtechnologies into existingorganizational structures. Thepartnership within the framework ofthe Metro Group Future Store Initiativeis a consistent step forwards forTOSHIBA TEC in the important processof advancing and actively designingthe modernization process in the retailtrade. So TOSHIBA TEC is Silver Partnerof Metro Group Future store initiativefrom now on.
The Metro Group Future Store Initiative is
a cooperative project between the Metro Group
and SAP, Intel, IBM and other companies from
the fields of information technology and the
consumer goods industry. As a research and
development platform for technical and process
developments, the initiative has set itself the goal
of defining unified standards and thus advancing
the modernization process in the retail trade. In
this way, the Metro Group FSI wants to play an
active role in shaping the retail trade of the
future, developing today the correct solutions for
the challenges of tomorrow. In the process, the
Metro Group FSI is a pilot project for the entire
retail trade. In cooperation with reputable
partners the initiative is testing the
implementation and the collaboration of
different technologies under realistic conditions.
In this way advantages for the customers, the
retail trade and the consumer goods industry
should be achieved.
For the Metro the introduction of RFID is a
decisive initial step towards exactly monitoring
and controlling the path of the goods along the
entire process chain, right into the warehousing
of the market or department store. This is true of
all warehousing for Metro, along with the branch
stores of the sales outlets Metro Cash & Carry,
Real and Kaufhof.
RFID usage within the framework of the
Metro Group Future Store Initiative is a major
media theme currently, since the introduction of
RFID technology opens completely new
perspectives for the retail trade. In future, RFID will
not only be used in addition to barcodes, but will
open up new fields of application which are
simply not available to the barcode. The
progress of RFID technology can no longer be
www.toshibatec-eu.com
slowed down. In terms of product pricing and
labeling RFID is already cost-effective, because
the smart label can also be used simultaneously
as an anti-theft device. The advantages and the
higher usage in material flow monitoring from
production through warehouse administration,
shipping and goods delivery and final sales are
beyond any doubt.
As a research and development
platform for technical and process
developments, the initiative set itself the
objective of defining unified standards and to
thus advance the international modernizing
process in the retail trade. This is also true for the
efficient use of RFID technology. Here, the
initiative developed a requirements catalog
which is valid for Metro.
This catalog was presented to
approximately 20 Metro suppliers in the spring of
2004, with the objective of realizing the usage of
RFID technology in the field of palette labeling in
the logistics area. The requirements catalog
includes, amongst other things, the realization of
DESADV/NVE as information types in EDI. The
realization on the supplier side was to be
completed as fast as possible.
Thanks to the fact that the company
had already examined RFID technology in
depth, PAPSTAR was one of the very first
companies that were able to satisfy the Metro
requirements in a short time. The company,
which was founded in 1979 and has its
headquarters in Kall in the Eiffel region, is today
one of the largest suppliers in Germany for the
products as disposable plate, packaging and
hygiene products and decoration articles.
In close cooperation with the
developers at TOSHIBA TEC in Krefeld, the
firmware of the B-SX4 series label printer which
was to be used was changed at short notice. In
the process, the data is integrated into the
storage area of the chip using a simple barcode
command, in accordance with the EPC 1.19
standard. This means that expensive software
updating is not required, since existing shipping
unit numbers can be used as required. Together
with the label manufacturing company X-Ident,
from Dueren, the RFID tags were optimized to
meet the Metro requirements. At the test run in
October last year, PAPSTAR was already able to
present the new technology and was the first
20 21
TOSHIBA TEC ANNOUNCESRFID AS ONE
OF THEIMPORTANT
STEPS IN NEW MODERN
TECHNOLOGY
FOCUS – TOSHIBA TEC
www.rfid.averydennison.com
23
Metro supplier to deliver in accordance with the
Metro specifications whilst taking into account
the layout in accordance with the CCG
guidelines for EAN-128 transport labels. The
implementation took place without any
complications and the PAPSTAR product range
has since been fitted with the required RFID
chips.
The particularly easy programming of
transponders by means of a standard barcode
command is one of the outstanding features. This
facilitates the integration into existing software
infrastructures. One absolutely new feature is the
‘head-up’ function: when an RFID transponder is
being written, the print head is raised above the
chip. In this way the transponder is in no danger
of being damaged.
In the project, PAPSTAR uses printers from
TOSHIBA TEC, because these printers offer many
advantages. The B-SX series printers from TOSHIBA
TEC are high performance industrial printers of
the latest generation, characterized by high
power and reliability. They are fast, easy-to-use,
compatible and convincing through a multitude
of further functions such as internet capability,
email, FTP and XML. Additionally, they are also
fitted with barcode interpreters (BCI). The BCI
function permits the operator to use competitor
printers without the need for software
adjustment.
In addition, the B-SX4 and B-SX5 series
printers are, unlike competitor’s printers, flexibly
HF or VHF compatible. Another decisive
advantage of the TOSHIBA TEC B-SX4 printer is
the new development of the ‘head-up’ function,
whereby the print head is lifted over the chip to
protect the sensitive smart labels. This also
protects the print head. This represents an
absolutely new feature from TOSHIBA TEC.
For Metro, the introduction of RFID is a
decisive step towards exactly monitoring and
controlling the path of the goods along the
entire process chain and right into the
warehousing of the market or store in focus. This
is valid for all Metro warehousing and that of the
subsidiary stores Metro Cash & Carry, Real and
Kaufhof.
The successful introduction of the Metro
Group Future Store Initiative requirements not
only demonstrates once again the high degree
of competence at TOSHIBA TEC in terms of the
usage of modern information technology.
Thanks to close cooperation with TOSHIBA TEC,
the Papstar company was the very first supplier
to the Metro to satisfy completely the
requirements of the Metro Group Future Store
Initiative with regard to the delivery of goods
within the logistics system.
22
TOSHIBA TEC Europe has earned a
reputation as a leading manufacturer of retail
and industrial information systems through
product development that aims to anticipate
and uncover potential customer needs,
resulting in products that provide real value and
benefits to the user.
As a total solution provider, TOSHIBA
TEC Europe offers a complete package from
consulting and system design to system
installation, operation and maintenance of
electronic point of sale systems, electronic cash
registers, electronic scales, barcode printers,
dot matrix printers, peripherals and software
information systems.
Maintaining this philosophy TOSHIBA
TEC are producing products and solutions to
allow the seamless integration of RFID
technologies into its current and future systems.
The first step in this area is the launch of an
upgrade kit for the new B-SX barcode printers.
This flexible approach will allow the products
supplied now to follow the trends and
innovations in this developing field.
A member of the TOSHIBA TEC
Corporation, TOSHIBA TEC Europe has financial
stability from one of the world’s leading
technology companies, while still retaining the
high levels of customer service and efficiency
usually associated with smaller organisations.
TOSHIBA TEC Corporation has a global
turnover of 300+ billion yen through 72 offices,
employing over 13,000 people.
Contact Data:
TOSHIBA TEC Europe Retail Information Systems N.V./S.A.
Remko Smaak
European Sales Manager Identification & Printing Division
Celideestraat 33 Rue de la Célidée
1080 Brussels
Belgium
Phone: +32 (0)2 410 21 00
Fax: +32 (0)2 410 79 87
E-mail: [email protected]
www.toshibatec-eu.com
The barriers to RFID are falling.Retailers are deploying RFIDtechnology in their supply chains andasking their suppliers to do so as well.Industry consortiums are definingstandards and protocols to ensurecompatibility and limit adoption costs.Avery Dennison is at the forefront ofthe industry, devising newmanufacturing processes and RFIDlabel designs that will not only enablethe market to produce the highvolume required an affordable cost,but also ensure label success in avariety of environments.
More and more major retailers around
the world are adopting RFID and asking their
suppliers to ship RFID-labeled cartons and pallets
to enhance supply chain efficiency. Users will be
able to find, track, secure and count items faster
and more accurately without having to locate a
barcode to scan. The RFID label consists of an
inlay with an antenna and a microchip inserted
into a traditional label construction, and
communicates via radio frequency rather than
optical scanning. RFID readers obtain
information at key points in the supply chain by
activating the label through its antenna. An
Electronic Product Code (EPC) is often stored on
an RFID label. This is a unique number that can
be thought of as a UPC combined with a serial
number.
In addition to merely complying with
retailer requirements, some manufacturers are
opting to implement RFID voluntarily for their own
internal benefit. These benefits include increasing
revenue by reducing out-of-stocks (“is it in the
back room or is it on the store shelf?”), creating a
competitive advantage by superior supply chain
management, generating a knowledge base for
the future roll-out of RFID throughout the
manufacturer’s customer base.
The future is beginning to appear over
the horizon of day-to-day reality as the number
of retailer pilots and trials continues to grow. The
METRO Group in Germany, the world’s third
largest retailer, launched the first phase of their
roll-out in November 2004. The declared aim of
the RFID implementation is to localize the
logistical unit and the trading unit within the
supply chain by automatically verifying incoming
and outgoing goods at distribution centers and
the store’s warehouse and showroom and
automatically updating the inventory
accordingly. In phase one, defined Metro
suppliers are required to deliver pallets labeled
with an 869-MHz UHF tag, as per EPCglobal
standard class 1, bearing an EPC code to identify
the pallet and its contents. By the end of this
year, a larger number of suppliers, the so-called
THE FUTURE ISNOW - THE
DIMENSIONS OFTHE RFID
REVOLUTION
FOCUS – AVERY DENNISON
Triflex horizon: We, Avery Dennison, leverage our core
competencies in high-volume, roll-to-roll manufacturing,
pressure-sensitive materials science and RF antenna
design – the future is now.
Top 100, are required to tag both pallets and
cartons delivered to Metro with UHF labels. In
2006, the third phase will again step up the
quantities needed considerably when sub-
carton tagging is required of each of the major
suppliers. Another project currently underway
which will bring new dimensions to the RFID
market was launched by the US retail giant Wal-
Mart in January 2005. Here, the first suppliers
delivering to one regional distribution center are
required to UHF tag either the pallet or the carton
and further expansion is planned throughout the
year. These are just two of many pilots and trials
Avery Dennison is taking part in; projects that will
drive the development of the market in 2005. In
addition, companies like the French retailer
Carrefour, Tesco in the UK, Target and Albertson
in the USA have all announced their intention to
assess the potential of RFID.
As the market for RFID grows, the
bottleneck will not be chip supply - adequate
silicon foundry capacity already exists to satisfy
potential RFID demands. The bottleneck will
rather be in RFID label assembly. A revolution in
the manufacturing technology for inlays is
necessary to deliver the “billions” capacity that
will soon be needed. The historical method of
RFID label assembly will not be able to meet the
emerging demand. Avery Dennison is
developing a unique manufacturing process for
efficient, high-capacity label assembly. It is
based on our experience and expertise in label
materials and web-based, roll-to-roll
manufacturing, as well as on our heavy
technology investment in RFID inlay assembly.
Overall, the industry is working to meet the
demands, but supplies are likely to be tight for
some time to come.
But it is not only a matter of increasing
the production capacity for tags; standards
governing the technologies and protocols used
need to converge, a process which is already
underway with EPCglobal defining the EPC code
at 96 bits. New legislation covering frequencies
and power levels is also helping to establish
technical standards for compatible RFID systems.
All the RFID suppliers involved are integrating the
new-generation standards into their
components. End-users who were reluctant to
invest in proprietary systems can now feel
confident investing their budget in a lasting
technology.
MAKE THE RFID SYSTEM WORKA functioning RFID system requires full
system compatibility. A printer/programmer must
import data to the label. A reader must detect
and communicate with the label, and hardware
and software must be present and used to
interpret the data and enable communication
with other IT systems and/or people.
• RFID labels (include a chip that is
attached to an antenna)
• Printers/programmers (to program the
chip and/or print the label)
• Readers
• Warehouse management system and
middleware
• Interface to ERP system
• A business process and operating
environment that enables and makes
use of the added information the RFID
label provides.
The label must work in the in-house
system and in the systems of the trading partners.
Label selection usually starts with deciding on a
particular frequency and protocol. Subject to
this, the selected RFID label must minimize cost
while offering a good performance margin. The
two dominant factors in determining an RFID
label’s performance are the chip used, and the
design and construction of the antenna.
Because chip compliance and capabilities vary,
those implementing RFID should seek label
suppliers that are able to work effectively with a
variety of technologies. With new chip
introductions expected, RFID label users should
align with producers with strong in-house
antenna/tag design teams that can keep up
with industry developments.
Label performance is a complex issue
and difficult to predict; labels which function
perfectly well when they are initially applied can
become unreadable due to the environment in
which they have been operating. Avery
Dennison was able to design an RFID label robust
enough for tough environments, improving the
read rate to a level approaching 100% while
leaving the system and microchip unchanged.
The most fundamental measure of RFID label
performance is the ability to read it at the
necessary distance under a given set of
circumstances. Several key factors impact read
distance:
ORIENTATIONThe likelihood of the RFID label
transmitting to the reader’s antenna is increased
if the label is readable from any angle. This also
avoids potential logistical costs, e.g. requiring a
specific label placement on cartons. Whereas
many current RFID labels have blind spots in their
radiation patterns, Avery Dennison’s proprietary
3-dimensional antenna technology eliminates
these blind spots.
PRODUCT ENVIRONMENTRFID labels must be compatible with the
products onto which they are applied. Metal,
liquid and other carton contents can detune
typical RFID labels. Avery Dennison has devised
proprietary auto-compensating technology to
address this problem as well.
SIZE OF THE ANTENNAThe antenna size impacts the read
range significantly; when all other aspects are
constant, the smaller the antenna, the shorter
the read range. That said, some packaging
requires a smaller label and therefore a smaller
antenna.
Note that a smaller RFID label is not
necessarily less expensive. The chip, not the label
size, is the major cost driver.
RFID LABEL DURABILITYLabels have to withstand different levels
of physical abuse, depending on where and
how they are applied. It is important to
understand the environments that the label will
see – and to work with RFID label vendors who
understand the traditional failure modes of labels
as well as the added complexities associated
with the inclusion of RFID technology into the
label.
24 25
SMART LABELS FROM SMART PEOPLEIn response to this exciting opportunity
and to ensure that we are well positioned to
support all the key players in this new market,
Avery Dennison RFID has been established as a
new, separate division of Avery Dennison,
dedicated to offer a market-based portfolio of
high-quality, high-yield, best-in-class RFID media.
Our products will include 100 % good inlays and
labels with a focus on EPC retail carton and
pallet applications and a secondary
concentration on item-level pharmaceutical
applications. We support these by leveraging our
core competencies in high-volume, roll-to-roll
manufacturing, pressure-sensitive materials
science and RF antenna design. We also work
closely with our global Roll Materials sister division
who are already hard at work developing
optimized pressure-sensitive label stocks that will
maximize the RF performance of our products.
• We offer our RFID media products
through established, expert label
converters. However, to ensure that we
deliver robust RFID solutions, tuned to the
needs of the marketplace, we maintain
close working relationships with all
members of the labeling value chain.
• Avery Dennison is a global Fortune 500
company, headquartered in Pasadena,
California; with operations throughout
Europe, the Americas and the Asia-
Pacific region.
• We are specialized in technologies that
help businesses and consumers gather,
manage and distribute information.
• We have been a pioneer in pressure-
sensitive technology ever since Stan
Avery invented the self-adhesive label in
1935.
• We have a track record of making
billions of high-quality, high-
performance labels for a variety of
electronics, industrial, automotive and
retail applications.
• We offer high-volume roll-form RFID
inlays and labels, as well as service
bureau solutions for in-house RFID
labeling applications.
• We are an approved carton-label
provider for Wal-Mart and an RFID
solutions partner in the METRO Group
Future Store Initiative and Innovation
Center.
Author’s Biography:
Stan Drobac
Vice President of RFID Applications
Avery Dennison Inc., Pasadena, CA
Stan joined Avery Dennison as Vice President, RFID
Applications in October 2002. He is responsible for RFID
product development, applications engineering, sales and
marketing.
Stan’s background is in semiconductors and electronics
manufacturing, in functions ranging from engineering to
marketing and business unit management. Before joining
Avery Dennison, Stan was Vice President, Sales and
Marketing, for Alien Technology in Morgan Hill, California.
Prior to that, he served in key marketing, technical and
operational roles at Flextronics; nCHIP, Inc.; Advanced
Micro Devices; and Fairchild Semiconductor. He holds a
BS in electrical engineering from MIT and an MBA from
Harvard.
Description: High-quality, 100 % read rate, best-in-class
media – Avery Dennison delivers innovative tag design for
ultimate reliability, Triflex
RFID label: an inlay with an antenna and a microchip
inserted into a traditional label construction, communicates
via radio frequency.
Avery Dennison
RFID Division Europe
Miesbacher Str. 5
83626 Oberlaindern / Valley
Germany
+49 (0)8024 / 641 – 0
+49 (0)8024 / 6411-302
www.rfid.averydennison.com
www.datamaxcorp.com
2928
customers and your vendors, and RFID can help
you streamline that interface.
But have you reviewed your work-in-
process or manufacturing floor processes? If you
are required to implement RFID in your customer-
facing applications, then streamlining
backwards into your operations can provide you
a more favorable cost-justification. Are you a
build-to-order facility? Why not use RFID tags on
the manufacturing line to ensure that the
product is actually being built to order and allow
customers to track it as it is being built? That
information can be stored in a database
accessed via an RFID chip on a bin that follows
the item from cradle through to shipping. When
the product is packaged, the bin is scanned and
the RFID label generated for the packaging
material is cross-linked to that item’s entry in your
master product database.
In order to create the necessary cost
justification internally, the implementation
process must be phased sensibly. It will be
important to understand all aspects of the
project, even if that project has a limited scope.
To incorporate RFID means to disrupt many
different processes and establish new ones.
Remember that the door nobody ever uses
actually gets used quite a bit. As a bit of advice,
establish spending thresholds, spending without
cost controls is foolish. A pilot program with your
suppliers is one of the greatest learning
opportunities that your company can undertake.
The benefits from implementing RFID technology
might be initially driven more by business process
change than the technology itself. RFID will not
solve process discipline failures, but it can
certainly help highlight them.
Remember that RFID does not equal
EPC and vice versa. It is easy to get caught up in
this misconception but the fact is there are many
RFID technologies that exist today outside the
realm of EPCglobal. In most instances, these
technologies will provide greater return on your
investment because they are more stable than
the EPCglobal technologies. However, if your
RFID implementation is a compliance
requirement, you are most likely going to have to
implement elements of an EPCglobal RFID
system. RFID technology can have many
different performance capabilities. It is
important that the technology chosen is the most
appropriate version for the application.
RFID can and should be exploited in
areas where the technology can assist in
reducing costs, errors, reliance on human
processes or a combination of all of those.
Multiple re-entry of information can be
automated using RFID tags and an appropriate
portal infrastructure. Review all paper based
business processes to determine if there are
opportunities to incorporate RFID technology.
Paper based processes don’t have to be
eradicated, although electronic initiation can
begin to lead your company down that path.
Also, review human initiated business processes
for the same purpose. For example, every bar
code scan on the receiving dock might be a
human initiated process. Automating this process
provides for a beneficial by-product. As
products are automatically scanned upon
receipt, the system generates a cross-docking
report telling the receiving employee where
each item should go next to maximize products’
time in the distribution center.
To achieve the maximum benefits out of
implementing an RFID technology,
manufacturers, logistics providers, distributors,
and retailers must work together to share
information. Without this collaboration, any
individual company will be limited in the
potential benefits to be gained from using RFID
technology. Manufacturers will apply RFID tags
to outer packaging and use that data to build
pallets. This data should be sent via the logistics
provider to the retailer or distributor so that
incoming goods can be cross-checked via the
Advanced Shipping Notice (ASN) to ensure that
the correct products were shipped and to
identify their proper location within the receiving
facility, distribution center or retail outlet.
Most likely, the solution that is most
appropriate for your application or uses will be a
combination of uses within several different
application areas. Trust Datamax to assist you
through this process. Datamax specializes in the
design, manufacture, and marketing of products
for bar code and RFID labeling including thermal
demand printers, label, ticket and tag materials,
and thermal transfer ribbons. Headquartered in
Orlando, FL., Datamax has sales representative
offices throughout the United States, Singapore,
China and the United Kingdom, as well as label
converting and preprinting facilities in Robinson,
IL. Datamax markets its products exclusively
through a network of resellers in more than 100
countries worldwide.
Sarah Schabacker
Datamax Corporation
Business Development Manager
Sarah Schabacker has been working on developing new
markets and technologies for the Auto-ID industry for 5
years. Prior to her work with Datamax, Sarah worked
with Central Florida Innovation Corporation, an
incubator established to promote high-tech businesses
in Central Florida. Her work there included research to
support RFID and Real Time Locating Systems. Sarah
began her career with Datamax in 2000 where she
currently manages several product lines and vertical
market development activities. Sarah graduated from
Rollins College Crummer Graduate School of Business
with an MBA in 2000.
The best-case scenario forimplementing RFID technologyrequires the capability to controlmany variables, both logistically andfrom an expectations perspective.This can be a challenge, but RFID hasthe capability to create substantialbenefits, including reduced costs andtime associated with trackingparticular products or processes. Thebest-case RFID implementationscenario is not developed in avacuum, it depends on the type ofinfrastructure either already in placeor that can be built to accommodatethe technology.
This includes not only hardware, but also
software or middleware to actually process the
data collected from the RFID application. Over
the next few years, you can expect substantial
improvements in the performance of many of
the elements of an RFID tracking system, but not
the type of improvements that would require
changing the laws of physics! The main question
facing many executives today is whether RFID
technology can assist them in their operations in
its current state. The answer to this question is a
moving target and depends greatly on many
factors including the price of RFID technology,
and the expectations that the user has for the
technology in a given application.
Many stories in the press over the past
year(s) have latched on to the idea of RFID as a
tracking tool and have declared the death of
the bar code. To suggest that RFID will replace
bar codes is an aggressive and unrealistic
stance. It is not a good enough reason to cite
historical adoption of bar codes as the only
justification as to why RFID will not replace the
bar code. In fact, the two technologies are very
complementary based on current and expected
costs, benefits, and expected uses. Bar coding is
an excellent technology for tracking products or
processes that don’t require individual and
unique item numbers, have a low relative value,
or for items that can be easily scanned during
the tracking process. RFID, on the other hand, is
very appropriate for identifying products or
processes that need individual unique
identification, have a relatively high value, or
require unmanned tracking capabilities. Your
supply chain management processes will
certainly benefit from being able to uniquely
identify a pallet, especially in this day and age of
mixed pallets and LTL (Less Than Truckload)
shipments. Streamlining the receiving process
can help remove many costs from the supply
chain associated with labor, stocking, and
inaccurate data entry. Also, if your product relies
on a brand name to maintain its value, the ability
to uniquely identify every unit with minimal
invasiveness on the product or consumers must
be very attractive to you.
Bar codes continue to have relevance
today and into the foreseeable future. Bar
codes and RFID can work together to identify
products or processes at a level of detail
appropriate for the characteristics of that
product packaging level or process importance.
Whereas RFID can provide intricate detail about
a product or process, there are costs associated
with that capability. Many times, the cost is too
high for the product or process to be identified
and the justification is not within reach. For these
applications, bar coding will continue to remain
the preferred technology. Bar code will also
continue expansion into industries outside
“normal” bar coding applications, including
hospitals, law offices, banks, and nurseries. This
expansion will lead the way for more
sophisticated technologies such as RFID to
penetrate these industries at a point far in the
future.
To create the cost justification that will
support RFID, you must be able to analyze a
situation and identify when conditions are prime
for implementing RFID technology. This requires
substantial and objective analysis and the ability
to undertake this process might seem like a
luxury. But, reviewing one’s processes should be
an ongoing undertaking to ensure that your
organization is always as efficient as it can be.
You probably have an idea where costs are
accumulating within your facility. They are in
areas such as receiving where you are paying a
lot of people to sort and scan each item that
enters your space, inventory management,
where you are paying more people to keep tabs
on your current state of goods in-house, and
shipping where mistakes can account for up to
5% of your bottom line annually. These
applications are ideal for implementing RFID,
especially in a compliance environment. These
are the applications that interface with your
RFID & BARCODING:
WHERE IS THEJUSTIFICATION
FOR RFID?
FOCUS – DATAMAX
www.cisco.com
31
www.paxar.com
30
FOCUS `– CISCO SYSTEMS
CISCO SYSTEMS - MAXIMISING THESUPPLY CHAIN WITH RFID READYNETWORKS
Companies are finding that to achieve
long-term value, they need to unify their supply
chains into a global, end-to-end supply chain,
from the factory floor to the store shelf. Offering
end-to-end product visibility, RFID technology is
poised to revolutionize the supply-chain industry,
significantly reducing costs and helping to
enable differentiation. However, companies
adding RFID capabilities must also anticipate
new challenges in integrating this new data
collection technology into their current
environments:
Network Availability and Scalability: The
RFID system must have the infrastructure,
including switching and data storage, to handle
the new reader and software devices as well as
their incremental traffic on the network. Growing
amounts of critical item-level data will generate
thousands and, over time, millions of pieces of
information in the system, to be accessed,
prioritized, and managed.
Additional subscribers: Users throughout
the supply chain will need to access RFID
information, including manufacturers, transport
and logistics partners, warehouses, distribution
centers, and internal personnel.
Secure interoperability: Not only must
RFID tags transmit across vendors and partners,
but data must be in common formats. RFID data
must be secured across servers and networks to
protect confidential information such as new
product launches and financial information.
Maximizing analysis: RFID information
offers new opportunities to analyze and
maximize customer information, as well as the
flow of products throughout the supply chain.
RFID systems must be able to utilize existing
systems and analytical software to optimize this
information.
Companies are anxious to leverage
existing network assets, lower costs, and minimize
disruption to their business during
implementation of the RFID capabilities. They
also want to preserve bandwidth by keeping
decisions close to the edge, an especially vital
concern given the potential for staggering
amounts of ePC-related traffic on the network.
By 2010, reader populations may exceed 75
million (Frost & Sullivan), meaning that the ability
to manage RFID devices will be critical.
THE CISCO SOLUTION: THE RFID-READYNETWORK
Cisco’s RFID-Ready Network is a tightly-
integrated wired and wireless network with the
ability to classify ePC traffic to prioritize it
anywhere in the network. Cisco’s resilient and
robust networks support using and directing RFID
information across the enterprise. By making such
information available throughout the
organization, Cisco facilitates the complete
supply chain that is proving so valuable to
retailers, government, and industry. Based on
Cisco networks, companies are able to respond
more quickly, track assets more accurately,
improve adaptability, and create a highly
effective, sustainable end-to-end supply chain
based on RFID technology.
Rather than offering RFID technologies
as an isolated system, Cisco networks simplify
implementation by adding RFID information as
another data type to its already powerful
networks. Based on these proven network-
centric systems, inventory information is shared
among suppliers, partners, distribution centers,
and logistics. Cisco provides the expertise,
experience, and a complete set of resources
needed to respond to today’s retail RFID
networking requirements. Users also take
advantage of Cisco’s complete data, voice,
and wireless capabilities over the same IP
network.
Network Availability and Scalability:
Basing your RFID implementation on Cisco’s fully
scalable, EPC-compatible open architecture
allows large-scale implementations to grow to fit
the need of the organization.
Additional subscribers: The RFID-Ready
Network’s power and scalability also enables
complete access to RFID information across the
supply chain, accommodating changes in
customers, partners, products, and contracts.
Secure interoperability: Cisco self-
defending networks provide encryption
technology that enables complete security on
wired and wireless networks. Services include
total interoperability, confidentiality, integrity,
authentication services, non-repudiation
capabilities, and high availability.
Maximizing analysis: Cisco’s standards-based
architecture supports and automates real-time data
availability between RFID tags, readers, middleware,
and systems including customer systems, analytic
software, and inventory and warehouse management
systems to shorten data analysis timelines.
The Benefits of the Cisco RFID-ReadyNetwork
A successful supply chain is driven by the
free flow of real-time information. By tracking the
status, location, movement, amount, and
inventory of products, companies are able to
maximize their sales opportunities and sustain
business growth. Cisco’s RFID-Ready Networks
support the power and agility of organizations
seeking to add these capabilities to improve
their ability to compete.
RFID builds on Cisco’s Intelligent
Information Network in the same way as other
network applications or data types such as voice
and video. The Intelligent Information Network is
therefore critical to a successful RFID
implementation that is secure, manageable,
flexible, and scaleable. Cisco’s RFID-Ready
Network will benefit multiple industries—including
retail, manufacturing, government, defence,
and healthcare—around the world.
Companies require RFID-ready solutions
that work transparently with existing
infrastructures, can be implemented quickly and
with the least business disruption, and will scale
with supply chain requirements over time. More
than 80% of the world’s Internet traffic already
travels over Cisco equipment. Cisco’s RFID-
Ready Networks are built upon the company’s
20 years of success in the technology industry.
Grounded in our proven intelligent networks, the
RFID-Ready Network extends the power of Cisco
networks into the new RFID data type. The
company’s unique history can also help
companies reap the benefits of combining
advanced technologies such as IP
communications, wireless, and other
applications into today’s RFID requirements.
Cisco Systems
200, Longwater Avenue
Green Park
Reading
RG2 6GB
Telephone +44 (0) 208 824 3128
Email: [email protected]
Andy Lee
RFID Marketing Manager, EMEA
James Browning, Group ManagingDirector of Paxar UK, a global leaderin the identification and tracking ofconsumer products worldwide,addresses the need for businesses toadopt RFID into their supply chainsahead of new compliance regulationsthat will come into effect from January2005.
Over the last few years, Radio
Frequency Identification (“RFID”) has grown from
a luxury to a pure necessity for businesses
worldwide. With the ability to read product
details at different points in the supply chain and
produce the information which can be used to
ensure that the right goods are delivered to the
right store at the right time, RFID enables retailers
and their suppliers to reach 100% stock
accuracy, which in turn enables the distribution
chain to maximise its efficiency.
The enhanced opportunities that can be
afforded from RFID range from the ability to
capture data accurately, track items through
the entire supply chain, maximise logistics and
warehouse management, through to security
and anti-theft and counterfeit. The breadth of
solutions RFID can offer businesses highlights why
it is one of the fastest emerging technologies of
auto-identification in the world.
From January this year, retailers and their
suppliers will face stringent industry compliance
standards to ensure their supply chains are RFID
capable. The industry needs to be prepared for
this change and now is the time that companies
need to start looking to the future. The
integration of RFID however is showing signs of
improving, with the matter moving swiftly from
the bottom of many boardroom agendas, to the
top. The bottom line remains however that a
large proportion of businesses feel daunted by
the thought of a new technology, and there is a
clear need in Industry to educate and guide the
retail industry through these difficult times.
RFID technology is only as beneficial to
the client, as the provider of that technology.
Ultimately customers want a reliable and up-to-
date piece of technology, a thorough
understanding on how to use it, and access to a
24hr support service.
A comprehensive range of possible RFID
solutions are available in today’s market to the
prospective buyer. From the new breed RFID
micro chip tags, for item level garment tagging,
through to the latest NVE-2-EPC Starter Kit, which
enables suppliers quick and effective RFID pallet
labelling. Paxar’s innovative RFID garment
labelling solution highlights the move from
boardroom brainstorming to working reality -
allowing for tagging and tracking of individual
garments, for purposes of supply chain efficiency
and in-store availability.
The buck however does not stop there!
What customers really require is an after-service,
providing solid and accurate advice, 24 hours a
day – addressing all RFID needs. The Technology
Investment Protection Programme, does exactly
this by meeting suppliers’ needs to implement
RFID quickly and effectively, as well as comply
with stringent requirements to provide shipments
with RFID encoded labels. Furthermore, the
Industry’s first ever express Service Bureau, the
Monarch® Q-Service™, enables suppliers to
global retailers needing RFID shipping and pallet
labels to take fast delivery of these labels,
programmed with unique RFID data and printed
with barcode and human readable data.
The current changes in the RFID industry
means that retailers and suppliers need to
change the way they work. Both retailers and
suppliers, and the companies who offer RFID
solutions need to work together to ensure the
transition is as easy and as successful as possible.
IMPLEMENTINGRFID FOR
BUSINESSCONTINUITY
FOCUS – PAXAR CORPORATION
Paxar Corporation (NYSE: PXR) is a global leader in the
identification and tracking of consumer products
worldwide. Paxar® products are used the world over
by leading apparel brands. Monarch® brand products
are used by 90% of the top 100 U.S. retailers and their
supply chain partners to identify, track, and price all
varieties of consumer goods. Paxar is a member of
EPCglobal, the agency managing the emerging
standards for RFID. Paxar is a member of EPCglobal,
the agency managing the emerging standards for RFID.
1. MANAGEMENT OVERVIEWA group of companies across thepharmaceutical supply chain cametogether in 2003 to explore the use ofradio frequency identification (RFID)and Electronic Product Code (EPC)technology—a pioneering effort interms of its practical scope andindustry breadth.1 This working groupincluded the pharmaceuticalmanufacturers Abbott Laboratories,Barr Laboratories, Johnson & Johnson,Pfizer, and Procter & Gamble;pharmaceutical wholesalers CardinalHealth and McKesson Corp.; retailpharmacies CVS Pharmacy and RiteAid; and industry trade associationsincluding the Healthcare DistributionManagement Association (HDMA)and National Association of ChainDrug Stores (NACDS).2 Accentureserved as program manager for thegroup.
Together, the participants wanted to
assess the business value of emerging RFID/EPC
technologies, standards, and processes, and to
work toward establishing an industry operating
model that addressed pharmaceutical industry
business issues. The technology’s use had
gathered momentum and uptake in other
industries. The project team sought practical
experience with RFID/EPC to explore its potential
within the pharmaceutical space. 3
From October 2003 through September
2004, the project team designed, tested,
implemented, and verified a complete supply
chain solution. The principal objectives were to
assess whether RFID/EPC could be used to help
create a safe and secure supply chain,
streamline reverse logistics, and increase the
accuracy and efficiency of distribution and
pharmacy operations. A scenario-based
approach was used to validate the solution, new
processes, and benefits against the related
business issues.
In an eight-week test, preceded by an
eight-month design period, the 9 participant
companies selected 10 products for the project,
working through 16 business scenarios in 15
project locations. Nearly 13,500 units of real
product were tagged, shipped, received,
handled, tracked, and traced through the
project’s system,providing the project with first-
hand experience in working with tags and EPC
reader technologies. As this group, known as
“Release 1, Group 1,” progressed in their efforts,
a new group of leaders in the pharmaceutical
supply chain formed a second collaborative
group, known as “Release 1, Group 2.” This
second working group included the
pharmaceutical manufacturers Merck, Novartis,
Sanofi-Synthelabo, and Wyeth; a
pharmaceutical wholesaler Cardinal Health; and
retail pharmacies CVS/Pharmacy and
Walgreens.
32 33
Following the objectives and basic
approach defined by Release 1, Group 1, this
second group implemented the technology and
worked through predefined business scenarios
across 9 locations.
From May through December 2004,
nearly 2,900 units of tagged product flowed
through the supply chain. This initiative was a
“proof of concept” of RFID/EPC technology in
the pharmaceutical distribution channel, and
seen as potentially the first step towards broader
adoption of RFID/EPC across the value chain. This
report summarizes the findings of the
organizations involved in Release 1, Group 1 and
Release 1, Group 2.
KEY FINDINGS
At a fundamental level, the project
achieved its objectives of demonstrating
RFID/EPC’s potential to address industry needs as
described below. In assessing the outcomes,
however, it is critical to once again note that this
project was a proof of concept.
It was conducted in a very controlled
environment with a limited scope. As would be
expected with a project of this nature, it included
many manual processes that ultimately will
require automation to achieve the desired
benefits from this technology.
There are many issues yet to be
addressed and much more work remains before
this technology and the resulting business
applications are scaleable and ready for
industry-wide adoption.
• SATISFYING INCREASED REGULATORY
REQUIREMENTS –
The system effectively tracked selected
pharmaceutical products from the
manufacturer’s distribution facilities through the
supply chain to the point of dispensing, thereby
helping to show their location in the distribution
channel and electronically capturing all
necessary “pedigree” information. However, the
technology employed must improve significantly
and the intra-industry information systems must
be built before this requirement can be satisfied.
• SATISFYING INCREASED TRADE CHANNEL
REQUIREMENTS –
The project demonstrated the ability to
manually tag pharmaceutical units and cases for
selected products to enable track-and-trace
capabilities in a manner similar to those required
in emerging retailer mandates.
• INCREASING PRODUCT SECURITY AND
CONSUMER SAFETY –
The system provided individual unit
serialization that has the ability to enable track-
and-trace functionality that could help prevent
counterfeit product from entering the supply
chain.
• INCREASING EFFICIENCY OF RETURNS
AND RECALLS –
Since detailed information such as lot
number, expiration date, and transaction
date/time/location is available for each
individual EPC, the project showed that the effort
to identify product location when processing
recalls and returns could potentially become less
complicated and labor intensive.
• INCREASING LABOR PRODUCTIVITY –
When conducting activities that
currently require bar-code scanning of each
individual item (such as shipping, receiving, or
cycle counting), the project demonstrated the
potential of RFID/EPC to increase labor
productivity by allowing multiple items to be
scanned at one time.
Furthermore, since shipping and
receiving would be more accurate, the
Figure 1. Defined Product Flow Path
WholesaleRegionalDistributionCenter
Manufaturer
WholesaleForwardDistributionCenter
RetailDistributionCenter
RetailPharmacy
RetailPharmacy
RetailPharmacy
RetailDistributionCenter
Wholesaler
RetailPharmacy
JUMPSTARTING THE PHARMA SUPPLY CHAIN
CASE STUDY – ACCENTURE
The above trademarks are used with permission.
3534
that had been pre-approved for the clear base.
Matrics (who made the tags) and CCL (who
converted the tags into the two-ply labels) were
able to use an adhesive that was appropriate for
the RFID tag and that would have sufficient tack
to attach to the base film.
• DESIGN AND PLACEMENT –
Though tags needed to be small, they
also had to be highly visible. Manufacturers
wanted to ensure the tags were removed from
their products prior to dispensing to consumers.
Retailers were similarly keen to avoid consumer
concerns. The tag label was designed using a
bright orange color to ensure visibility for
pharmacists.
• TAG LABEL DESIGN –
The project team went through several
iterations on the information printed on the tag
label. This was as a result of the group’s desire to
align with the public policy guidelines
established by EPCglobal and the fact that the
specific approach for implementing the
guidelines was still evolving. (Many of the
guidelines had originally been developed within
the context of consumer packaged goods,
which were not appropriate for pharmaceutical
products.) Dialogue between the project team,
EPCglobal, and the FDA resulted in the final tag
label design that included wording (“Inventory
control tag. Tag may be removed”), a human-
readable EPC number, and the EPCglobal logo.
After the project was completed, the
tags were removed from the products, and the
products were put back into inventory for normal
distribution.
4. TECHNICAL DESIGNThe goal of the project was to determine
if RFID/EPC technology could enable and
improve areas where key business issues exist. It
did not set out to prove that the project’s
technical solution was an exact right fit for each
company’s specific situation. The technical
infrastructure spanned 15 organizations that
collected, analyzed, and acted on data
generated by EPC movements. The architecture
utilized a distributed network of readers and
servers composed of four primary components:
• The RFID reader and antenna provided
the input for the entire system. This
component collected tag data from
products and cases. Readers and
antennas were located at each node in
the supply chain.
• The local manager temporarily stored
reader tag data, acted as the reader
controller, and formatted EPC data so
that it could be sent to the central
manager. Each company had a local
manager that could control many
readers.
• The central manager was where the
bulk of the functional logic resided and
where tag data was permanently
stored. The central manager was hosted
in an Accenture data center, which
included the capability to centrally
monitor the local managers.
• A PC with a Web browser was used to
access th application on the local and
central managers, and control the
readers.
The team advocated a buy (versus
build) approach, and sought components
aligned with emerging EPCglobal standards and
which would allow flexibility for expansion during
future releases. The architecture also needed to
provide a secure channel for data collection,
distribution, and storage. Manhattan Associates’
solution was selected since it provided the
required functional capabilities along with a
bundled RFID middleware capability. As
discussed earlier, Matrics tags were selected.
Consequently, this factor drove the reader
selection decision. It should be noted that
vendors selected for this implementation were
selected based on the specific functional
requirements outlined by the project team. No
particular preference or vendor qualification
beyond the scope of this project is indicated or
implied.
Figure 3 shows the primary components
in the project environment and where they fit
into the infrastructure.
5. WORKING WITH KEYGOVERNING BODIES
Given that RFID/EPC is very new to the
pharmaceutical space, it was important to
understand the direction and policies of key
public policymakers such as the FDA , EPCglobal
, and DEA to make the project’s activities
effective.
FDA
From the project’s outset, participants
sought guidance by the FDA on certain
regulatory issues such as labeling, electronic
administrative effort to follow up on
shipment/receipt discrepancies may be
reduced. It should be noted, however, that tag
readability and reliability must improve
significantly before this process is scaleable.
There may be an incremental increase in the
labor effort required as a result of changing
systems and processes during the initial adoption
of RFID/EPC
• INCREASING ORDER ACCURACY –
RFID/EPC technologies can provide
validation of shipment and arrival at different
points in the supply chain, thereby reducing
over- or short-shipments of product, and
increasing customer satisfaction.
The final sections of this executive
summary further discuss this project’s findings.
They also outline the considerable challenges
ahead that will require a concerted effort by the
industry and regulatory bodies alike to work
through.
2. PROJECT APPROACHThe project focused on assessing the
ability of RFID and EPC applications to improve
specific work processes—what the project team
called business scenarios. These scenarios
addressed four key categories: EPC
Management, Safe and Secure Supply Chain,
Streamlined Reverse Logistics, and Accurate
Operational Efficiencies. (Sidebar 2 shows a
complete list of the16 scenarios.) Release 1,
Group 1 selected 10 products and 15 distribution,
wholesale, and retail locations; Release 1, Group
2 selected 9 products and 9 distribution,
wholesale and retail locations for the project.
In order to quickly and cost-effectively
plan and execute this project and avoid any
business interruption, a separate, standalone
parallel process and system were created with
no modifications to packaging or production
processes and no integration with existing
information technology (IT) systems. There was no
attempt to validate the system according to FDA
electronic records regulations.
3. TAG DESIGNThe original design called for a plain
tag—chip, antenna, and plain inlay with an EPC
number printed on the front label—which would
support business processes in lieu of bar codes
and enable unit-level serialization. The tag
needed to be small enough to be placed on
pharmaceutical packaging without covering
any existing labeling, it needed to be a UHF tag
which is conducive to processes focused on
shipping and receiving, and it needed to comply
with EPCglobal Class 0 standards. The 1.2” x 1.4”
tags selected from Matrics met these
requirements. They came with factory-
programmed EPC numbers with a known set of
test numbers provided by Matrics to serve as a
control (manufacturerspecific “real” EPC
numbers were not obtained from EPCglobal).
As the project team worked through the
design with the participants’ packaging,
regulatory, and quality assurance experts —
along with EPCglobal and the FDA — a number
of issues arose that provoked the need for
changes and additional features:
• REMOVABLE TAGS AND ADHESIVES –
The project involved tagging trade
packages containing real product. Pharmacists
typically remove the product from these
packages and dispense the medication to
patients in vials.5 Even though it was not
expected such products would ever be
dispensed in the original trade package, to
avoid consumer concerns the group worked
toward making tags removable to reduce the
chances that tagged product would end up in a
consumer’s hands. At the same time, the team
needed to find an adhesive that would allow the
tags to stay on during handling through the
supply chain and avoid potential negative
interactions with packaging or drug composition.
A group of specialists in labeling and
quality assurance designed an innovative two-
ply “coupon-style” tag. A clear base layer
remains on the product for its lifetime, but the
actual RFID tag, while adhering during the
course of normal handling, can still be peeled
off. With the two-ply “peel label” solution,
manufacturers were able to use an adhesive
SIDE BAR 1:RFID/EPC OVERVIEW
RFID
Radio Frequency Identification
technology (RFID) is an advanced method to
collect product, event, and/or transaction
data quickly and easily. Items to be tracked
are tagged with a small chip and antenna.
When the tag is in close proximity of a reader, it
receives a lowpowered radio signal and
interacts with a reader exchanging
identification data and other information.
Once data is received by the reader, it can be
sent to a computer for processing.
EPC
The Electronic Product Code™(EPC) is
an identification scheme for universally
identifying physical objects via RFID tags and
other means.4 EPC technology allows everyday
objects to be uniquely identified and
connected in a dynamic, automated supply
chain that joins businesses and consumers
together in a mutually beneficial relationship.
BAR CODING AND RFID/EPC
Bar coding is a line-of-sight
technology, meaning that each individual item
has to be handled to scan the bar code with a
reader. In addition to being labor intensiveand
time consuming, this method has potential for
error in reading the same unit twice or missing a
unit because it is done at the item level, not the
serial number level. RFID tags enable
automatic, non-line-of-sight identification,
reducing the possibility of errors and the labor
necessary to achieve the same results.
Although the EPC numbering standard
uniquely identifies products, its implementation
will evolve over time with applications driven by
market and consumer demand. Therefore, bar
codes and RFID tags will coexist for some time
to come.
1 For an overview of RFID/EPC, see Sidebar 1.
2 The FDA and EPCglobal representatives also attended keymeetings at the Steering Committee level.
3 See Sidebar 3 for the industry context for RFID/EPC.
4 EPC Tag Data Standards, Version 1.1 Rev. 1.24
5 There were two exceptions: one product was in a blister
pack and another was packaged in a carton, both weredesigned to be consumer dispensable.
6 Only solid dosage form products were subjected to thistesting and were used in the project. 8 9
7 See Sidebar 2 for a complete listing of the scenarios.
8 Discussions with regulatory bodies would be required to
finalize such a capability.
9 The table in sidebar 5 documents challenges encounteredby Release 1, Group 1 and resolutions adopted by Release1, Group 2.
10 The table in Sidebar 4 documents the range of potentialissues to widespread adoption of RFID/EPC.
3736
visual and verbal characteristics, so that they
were appropriate for pharmaceutical products.
As the industry moves forward with RFID,
EPCglobal’s focus and standards will expand
and mature to help make RFID projects in the
pharmaceutical space more effective.
DRUG ENFORCEMENT AGENCY (DEA)
The participating companies
determined that it would be advisable to inform
the DEA of the project due to the incorporation
of controlled substances into the project scope.
The companies wanted to ensure that there
were no additional DEA requirements for
completing transactions with controlled
substances. The project completed all necessary
DEA forms as normal during verification, but there
was no additional involvement from the DEA.
6. SPECIAL PROJECT DECISIONSINFERENCES REGARDING CASE INTEGRITY
Due to the inherent physics limitations of
UHF radio waves and their inability to penetrate
certain materials (e.g., liquids and metals), initial
tests indicated that not all units within a case
could be consistently read by a reader. An
important component in the project was the
decision to make inferences about case integrity
and authenticity. That is, even if only a portion of
the individual units within a case were read, all
the units could be inferred to be within the case
by their association with the case tag.
Depending on future business requirements and
processes, inference logic may be
unacceptable. Alternate approaches involving
customized packaging/reader antennas, the
use of high-frequency tags, and adjustments to
processes–as well as matured solutions–may
need to be leveraged to make unit-level tags
trackable nearly 100% of the time.
LIMITATIONS TO DATA VISIBILITY
All participants in the project have major
concerns with the potential to allow competitors
to gain visibility into confidential company data
such as inventory levels, shipping/receiving
schedules, and prices. The project reinforced the
need to establish sound, principle-based data-
sharing work processes. For purposes of this proof
of concept, the intent was to work with each
organization to create a simple solution that
demonstrated the project’s ability to restrict
confidential data. The final data visibility scheme
was developed using three guiding principles:
1. Visibility was favored over restricted
access.
It was understood that in potential future
releases, data access and visibility would likely
become more restrictive.
2. Authorization rules were kept simple.
The processing logic behind data
access and visibility was such that there was no
confusion among users as to why an
organization’s visibility was enabled or restricted.
3. The solution demonstrated the ability to
keep sensitive data confidential.
The project exhibited the ability to
restrict access to certain data based on the
users’ identity and their possession of the
appropriate tag information.
7. VERIFYING THE SOLUTIONWorking through the various business
scenarios the team has established, and going
live with the selected RFID technology to
execute them, comprised a stage of work called
Verification. Prior to Verification, the Release 1,
Group 1 team conducted a conference room
pilot from April through May 2004, to simulate a
records, and the effect of the electromagnetic
energy associated with RFID on product quality.
Regarding labeling and electronic records, the
FDA decided to exercise “enforcement
discretion” as applied to this specific project.
However, the FDA did request that
manufacturers share the results of any product
quality testing they conducted that investigated
whether there were any effects of
electromagnetic energy on drug efficacy,
potency, and strength.6 The pharmaceutical
manufacturers developed and executed a
testing protocol for the products and technology
involved in this initiative, which was shared with
the pharmaceutical industry. Once the analysis
was complete, the results were shared with the
FDA. As initially expected, based on the
measurements taken, no adverse effects were
found on the products that were tested, and the
team moved forward using live product during
this project. Testing proved a valuable exercise,
since it provided factual data on the effects of
electromagnetic energy on product quality.
EPCGLOBAL
In addition to setting industry-driven
standards for EPC, EPCglobal is also providing
guidelines on the visual appearance of tags and
communications for consumer awareness. EPC
standards have evolved based on requirements
driven b industries such as consumer products
and retail. To complete this project, the team
coordinated with EPCglobal to adjust the tag’s
SIDE BAR 2: PROJECTBUSINESS SCENARIOS
EPC MANAGEMENT
• Commission – (1) Manual update with
product description, lot number, and
expiration date (i.e., pedigree product
information); (2) manual initialization of
link between unit EPC and case EPC
• Decommission 1 – Automatic
decommission of a unit EPC or case
EPC after a designated time period of
inactivity in “suspense” status
• Decommission 2 – Manual
decommission of case or unit EPC tags
SAFE AND SECURE SUPPLY CHAIN
• Regulatory Compliance – Tracking
product through the supply chain to
create a pedigree
• Counterfeit Compliance 1–
Identification of counterfeit product
based on Product Authenticity
Reporting
• Counterfeit Compliance 2 – Automatic
alert of counterfeit product based on
invalid case or unit EPC tags
• Counterfeit Compliance 3 – Automatic
alert of counterfeit product following
the reuse of EPC tags after a period of
inactivity or no reads
• Logistical Error – Identification of a
supply chain logistical error based on
valid case or unit EPC tags
• Product Theft 1 – Identification of
missing or stolen product based on
Shipping and Receiving Summary
Reporting
• Product Theft 2 – Automatic alert of
missing case or unit EPC resulting from
theft occurrence on inbound shipment
STREAMLINED REVERSE LOGISTICS
• Product Expiration Management 1 –
Identification of short-dated, recalled,
or expired product via Inventory
Management Reporting
• Product Expiration Management 2–
Identification of short-
dated/expired/recalled product on
receipt
• Expired/Recalled Product Return –
Short-dated, expired, or recalled
product return managed through
return of EPC tags
• Product Recall Management –
Manufacturers’ ability to alert supply
chain partners who have received
product being recalled, and
summarize the distribution history of the
recalled product via Product History
Reporting
ACCURATE OPERATIONAL EFFICIENCIES
• Shipping Operations – Outbound order
shipping accuracy verification
• Receiving Operations – Inbound order
receiving accuracy verification
Figure 3. Conceptual Vendor/Product Fit
Tag Antenna Reader
LOCALMANAGER
ReaderControl
Commands
BusinessLogic
& Alerts
EPCEventData
EPCTagData
CENTRALMANAGER
Integration Platform
RFID Activity ConsoleRFID Activity Console
Integration Platform
Warehouse Management
Trading Partner Management
The team conducted aconference room pilot tosimulate a real-life supplychain - from manufacturer to wholesaler to retailer.
3938
demonstrated again the ability of this project to
use RFID/EPC technology to execute
pharmaceutical industry scenarios at 9 locations
for 9 different products. The project team set out
to track 9 products through 9 locations.
Nearly 32 participant company
personnel gained experience in working with the
scenarios during Verification.
As with Release 1, Group 1, the
application tracked tag readability statistics
during Release 1, Group 2 Verification. The
project team was able to read 99% of the case
tags. In addition, when units were inside a case,
the team was able to read 85.1% of the unit tags.
The read rate was lower than what was
experienced in Release 1, Group 1, and can be
attributed to packaging of the cases (i.e. greater
number of units in the case, some packaging
materials contain foil). Once verification was
complete, 99.9% of returned tags were
functioning.
Second, similar to other implementations
of new processes and/or technologies, the
Jumpstart participants have demonstrated
progression through the stages of a traditional
Learning Curve.
Companies that participated in both
Release 1, Group 1 and Release 1, Group 2,
exhibited the ability to adapt to the new
technology. The individuals conducting the work
for Release 1, Group 2 found they were more
comfortable with processes and that they were
able to resolve issues more quickly and on their
own. The traditional learning curve is shown in
Figure 1.9a.
10. KEY CONCLUSIONS –RELEASE 1, GROUP 1
The project helped establish key facets
of an industry operating model. By creating a
proof of concept that engaged major sectors of
the supply chain, participants gained insight into
what processes an supporting systems need to
be in place to construct an industry operating
model. The safety and security of the supply
chain was a critical focus of the project. The new
operating model will ultimately require unit-level
serialization of products which could enable
systematic detection of counterfeit product if it
enters the supply chain, a previously unavailable
capability. In addition, the project:
• Assessed the potential for RFID/EPC to
electronically address important
regulatory mandates such as the Florida
Pedigree Requirements. This technology
offers the potential to eliminate the
need for a paper-based pedigree
system, which is labor intensive and
unreliable.8
• Helped to establish business rules and
processes to facilitate returns, and
designed a recall process that may
provide a more efficient manner to
execute this process using RFID/EPC
technology.
• Developed and executed testing
protocols that provided data indicating
that electromagnetic energy did not
affect the efficacy, potency, and
strength of this project’s solid-dosage
products.
• Contributed research and developed
workable solutions on tag frequency,
label color, size, wording, and location
on packages that could represent
going-in positions for the industry.
The project allowed participants to
rapidly learn and create innovative responses to
significant project issues. The project team
addressed and resolved several critical practical
matters in this first broad application of RFID/EPC.
FOR EXAMPLE:
• Numerous obstacles on EPC tags were
overcome to prove that pharmaceutical
products can be tagged at the unit level. The
project team showed that human readable
numbers can go on tags and be used as a
method of redundancy in case the tag is not
functioning. It established an innovative two-ply
tag system that worked well and satisfied the
needs of manufacturers for adhering to the
bottle during normal handling, but that could
also be removed to reduce the chances of tags
getting into the hands of consumers.
• The project arrived at some tentative
solutions to address data visibility and security—a
practical start in surfacing and exploring an issue
that will likely be a key adoption hurdle for
RFID/EPC in the industry. The selected
technology suite was completely appropriate
and workable for the parameters of this project.
The primary objective was to focus on
assessing business value, not on perfecting the
technology. Furthermore, the project team
needed to choose components that fell within
the agreed-upon time and budgetary limits of
this project. The team selected commercially
available solutions and implemented them so
that business scenarios could be run and
experiences gained with reasonable
effectiveness. It was understood that the solution
would not be optimized for each location. For
example, the single antenna used in the project
was chosen for its simplicity and ease of use.
Naturally, in a scaled-up version of the project,
there would be multiple antennas throughout
the facilities and dramatically enhanced
capabilities (e.g., multidirectional reading).
It should be noted that the level of
complexity to do a “simple proof of concept”
was greater than anticipated given all the
different participant companies involved. Such
complexity is likely to grow much above what
real-life supply chain from manufacturer to
wholesaler to retailer. This involved testing the
system, training users, and creating a demo of
the new environment to show interested parties
outside the project. A conference room pilot was
not completed for Release 1, Group 2 due to
limited changes in scope; however several
modifications were made to the solution as a
result of the learnings identified during Release 1,
Group 1 were fixed by installing software patches
created by Manhattan. These modifications
were tested prior to implementing into the
Release 1, Group 2 environment.
ADDITIONAL FINAL PREPARATIONS INCLUDED:
• Supply Chain Analysis –
Documenting how and when product
would move through the supply chain. To the
extent possible, the team wanted to test each
scenario for each product at each location.
Doing so required the team to conduct a supply
chain analysis that laid out step-by-step volume
flows describing what, how, and when nine
participant companies’ locations would be
shipping to each other.
• Exception Processing –
In order to make the scenarios as
realistic as possible (and to demonstrate how
RFID might enable the handling of them), the
team planned into Verification a number of
exception simulations and forced these
exceptions to occur. The five “exception groups”
were theft, counterfeit/diverted, logistical error,
expired, and recall.
8. VERIFICATION RESULTSRELEASE 1, GROUP 1
The project was intended to assess the
feasibility of leveraging RFID/EPC technology in
an end-to-end supply chain context. The
Verification stage of the project showed positive
movement in that direction in two ways.
First, the Verification stage
demonstrated that the RFID/EPC tags and
readers were largely successful in and of
themselves as mechanisms for tracking and
tracing product. The project team set out to
track 10 “real” products (not just empty bottles)
through 15 locations. The manufacturers were
required to verify the readability of the tags
before applying them to the products. Then they
were able to commission individual EPC numbers
for specific product units and cases.
The common hardware components
selected for the project were quite reliable. Solid-
dose packaging (bottles) as well as blister
packaging could be read and tracked. In this
limited proof of concept, the system was able to
dramatically increase the visibility of the project’s
selected products as they moved through the
supply chain. The application tracked tag
readability statistics during Verification. The
project team was able to read 98.6% of the case
tags. In addition, when units were inside a case,
the team was able to read 96.8% of the unit tags.
Once Verification was complete, 99.9% of
returned tags were functioning. As the project
progressed, and as personnel at various
locations became more comfortable with the
technology and how it worked, read rates
improved. In addition, personnel found that
success in read rates was often related to 1) time
and diligence spent trying to read (e.g., holding
the units/cases to reorient the tag in relation to
the antenna), and 2) the number of antennas
implemented.
Second, the Verification stage
demonstrated the ability of this project to use
RFID/EPC technology to execute 16
pharmaceutical industry scenarios at all 15
locations for all 10 products— a major
undertaking.7 The project’s system and processes
were able to simulate in a live environment a
range of conditions in the supply chain. Nearly 30
participant personnel gained experience in
working with the 16 scenarios, which allowed
them to see how RFID/EPC can surface
information about “suspicious” or irregular
shipments such as potentially counterfeit or
stolen products. By having continual real-time
access to pedigree information on specific units,
they were provided with much-improved visibility
into where product was at all times and could
query the system to track down missing product.
9. VERIFICATION RESULTS –RELEASE 1, GROUP 2
The Verification stage of the second
group showed positive movement in assessing
the feasibility of leveraging RFID/EPC technology
in two ways.
First, the Verification stage
SIDE BAR 3:
SIDE BAR 3: INDUSTRYCONTEXT – THE
GROWTH OF RFID/EPCFor some time, the consumer products,
retail, and transportation industries had taken
the lead in researching and applying RFID
technologies for widespread use. A
comprehensive study of RFID’s potential to
enhance pharmaceutical product
manufacturing, distribution, and retail
operations was a logical extension of those
efforts. Some specific regulatory mandates
unveiled in 200 created a sense of urgency for
exploring RFID in order for companies to
comply. Two notable mandates were:
• The Florida Pharmaceutical “Pedigree
Papers” requirements mandate that
histories be maintained that identify
previous sales and product information
dating back to the drug manufacturer.
• Under Georgia’s “Credit for Returned
Expired Drugs” regulations, all
wholesale drug distributors must make
adequate provisions for the return of
expired prescription drugs for up to six
months after the labeled expiration
date for prompt credit or replacement
(to be received within 60 days). These
regulations place the financial burden
of expired product entirely on the
wholesale drug distributors.
Industry and military initiatives have also
propelled the reality of widespread RFID usage.
Wal-Mart’s RFID mandate has been widely
credited with a general acceleration of the
technology throughout the United States. By
2005, the retailer’s top 100 suppliers must have
RFID identification tags on shipping crates and
pallets. In addition, Wal-Mart has also
mandated that its Class controlled
pharmaceutical products suppliers use RFID
tags bearing EPCs at the unit level by June 2004.
The U.S. Department of Defense for its part will
require all of its suppliers to put RFID tags on their
shipping pallets and cases being delivered to
the department’s depots by January 2005.
BUILDING SAFE AND SECURE SUPPLY CHAINS
As noted in a recent NACDS report, the
World Health Organization estimates that 5-8
percent of drugs worldwide are counterfeit—
meaning such drugs could represent from $7
billion to $26 billion of the $327 billion global
market. The FDA’s current anti-counterfeiting
taskforce is investigating methods to secure the
pharmaceutical supply chain by examining
new technologies that utilize RFID. It has stated
that it should be feasible to use RFID to track all
drugs at the unit level in 2007. Other healthcare
organizations are either advocating RFID or are
predicting its inevitability.
4140
applications must be able to recover from
human error. For example, the commissioning
activity is a manual process in which the
application builds product data in real time. In
the instance that incorrect information is
associated with a product and a product is
improperly commissioned, the application must
allow the user to recover from the error.
12. THE FUTURE OF LEVERAGINGRFID/EPC ACROSS THE PHARMACEUTICAL
INDUSTRY
Full-scale implementation on an
industry-wide basis will be more complex than
many believe, requiring more time than
anticipated to refine issues unique to the
pharmaceutical industry. Requirements for
systems and packaging-especially in addressing
data sharing and consumer concerns-in this
highly regulated environment will present greater
costs and efforts than those of other industries.
Other key conclusions about RFID/EPC's future
include the following:
THE TECHNOLOGY MUST CONTINUE TO EVOLVE
FOR AN EFFECTIVE FULL-SCALE INDUSTRY
IMPLEMENTATION.
RFID technology is improving every day.
Hearing recent feedback about practical
applications of the technology, hardware and
software vendors are responding appropriately
and quickly. An example of an issue being
addressed by vendors is tag quality. At each step
of the process of converting tags into labels, a
sizeable percentage was not useable due to
problems with the tags, labels, or printing. The
rate of defective finished tag labels
(approximately 20%) would not be acceptable
outside this project's limited scope.
Tag manufacturing and converting
processes will need to improve significantly to
provide tags with defect rates at least as low as
other packaging components that
pharmaceutical manufacturers currently use.
The technology will also need to advance such
that tags will function effectively with liquids,
biologics, and cold chain products, among
others, as well as in mixed-tote shipments. Finally,
tag costs need to decrease significantly.
Additional technology issues that must
be addressed include:
• In order to support the type of
distributed network that an RFID
implementation requires, updates will
need to be made at all locations to
support communications to new RFID
was present in this simple test environment as
integration requirements grow. The project
underscored the importance of meeting
infrastructure prerequisites to prepare for
industry-wide adoption of RFID/EPC.
There are immediate measures that
manufacturers, wholesalers, and retailers can
take as preconditions for being effective with
RFID/EPC technologies. For example, the
broader lessons and issues on this project can be
addressed through smaller scale initiatives within
the four walls of organizations looking to
implement RFID/EPC.
Implementing RFID/EPC technology
affects many disciplines within an organization,
and companies must work on integrating their
efforts internally. Implementing RFID/EPC
technologies in any company requires close
coordination and involvement across the
organization— representatives from information
technology, quality assurance, regulatory affairs,
public relations, packaging, and operations for
manufacturing, distribution, and stores. One
specific example was the need to address public
perceptions about the industry’s goals in
exploring RFID/EPC. Reassuring consumers will be
a major task that many functional groups will
need to address.
A collaborative, cross-supply-chain
approach proved effective in pooling resources
and sharing development assets in order to gain
benefits.
It is unlikely that any single member of
the group could have gone as far as it did, or at
the level of cost, without the collective
knowledge, experience, assets, and learning of
the others. No single firm could test the RFID/EPC
technology and duplicate the interaction of the
entire supply chain. Manufacturers, wholesalers,
and retailers worked well together to address
industry issues. The collective voice and
collaboration of the supply chain participants
were among the advantages to this group
approach. For example, the project team
identified and brought to the attention of
EPCglobal and the FDA the need for standards
and business practices relating to the use of
RFID/EPC technologies that address the unique
needs of the pharmaceutical industry. The
presence of an independent, trusted third party
was also essential to keeping the group on a
single path—facilitating collaboration,
completing the project in accordance with the
agreed-upon timeline, and coordinating
external communications about the project. The
coordination from a technical perspective was
also important. Many different organizations and
individuals (data center administrators, VPN
engineers, facility engineers, network specialists,
security specialists, etc.) needed to be
orchestrated and move in concert to complete
the design, deployment, and support activities.
11. KEY CONCLUSIONS –RELEASE 1, GROUP 2
RECONFIRMED FINDINGS FROM RELEASE 1,
GROUP 1
As with Release 1, Group 1, the Release
1, Group 2 project achieved its objectives of
demonstrating RFID/EPC's potential to address
the pharmaceutical industry in the areas of
satisfying increased regulatory requirements,
satisfying increased trade channel requirements,
increasing product security and consumer
safety, increasing efficiency of returns and
recalls, increasing labor productivity, and
increasing order accuracy.9 The project
objectives were met under the premise that
inference logic was acceptable during shipping
and receiving. Additional RF testing was
beneficial in demonstrating that there are no
adverse effects found on the products that were
tested. This additional testing proved to be a
valuable exercise to provide additional
reassurance to the public and FDA alike.
Package composition and tag orientation (i.e.
placement of tag on units and how tagged units
are packed in the case) do have an effect on
tag readability.
A product was chosen that was packed
in cases of 48 cartons where each carton
contained foil packs. In addition, cases of
product with 72 bottle units packed in three
layers and 96 bottle units packed in two layers
were used. The group found that tag read rates
were slow with these package configurations.
There is a potential need to adjust packaging
configurations based on the longer read rates
and greater number of inferences made with
these types of packaging. Therefore, a one size
fits all tag infrastructure is not sufficient moving
forward.
When both tagged and untagged
products are contained in the same shipment,
there is a need to adjust data collection and
inventory management processes. Using normal
modes of shipping showed the intricacies
involved with shipping tagged and untagged
product in one shipment. There is a substantial
amount of time spent searching for tagged
product in a shipment that contains mostly
untagged product.
KEY FINDINGS SPECIFIC TO RELEASE 1, GROUP 2
Case level tagging allows for
identification of the cases from the manufacturer
to the wholesaler. Guidelines from the FDA
stating that all cases and pallets must be tagged
by 2007 and retailer mandates for case and
pallet tagging were the impetus for this group to
demonstrate the value of case level tagging.
When units within a case are untagged, product
visibility ends when the case is broken, thus the
value of tagging at the case level exists only at
nodes in the supply chain that ship and receive
cases. Tagging cases may offer inventory control
and returns management benefits at these
locations, but electronic pedigree information
can not be generated for product tagged at the
case level.
As additional companies and products
were incorporated into the project, different
perspectives, limitations and considerations for
the future were generated. The group
discovered that until existing processes and
systems are fully integrated, current RFID
SIDE BAR 4: CHALLENGES TO INDUSTRY ADOPTION
KEY PROJECT CHARACTERISTICS POTENTIAL ISSUES FORWIDESPREAD ADOPTION
The solution operated with a centralized systemand a single instance for all companies.
What would be the development time andinvestment implications of creating adecentralized, heterogeneous environment?
Tags were placed on packages manually, onthe exterior, at the manufacturers’ distributionsites.
How could tags either become integral topackaging or at least be appliedautomatically?
There was no integration of systems; this systemwas a standalone, parallel system that requiredduplicate data entry.
What would be the development time andinvestment implications of integrating RFIDtechnology and applications with coretransaction and other legacy systems?
There was “full” visibility of information (or morevisibility than would probably be permittedoutside the project).
What would be the process for sorting throughand managing restrictions on visibility—andhow would those outcomes impact the valueof RFID/EP?
The team made inferences regarding caseintegrity.
What steps would be needed to achieve closeto 100% readability at the unit level?
The project focused on a subset of processesthat when improved by the use of RFID/EPCwould provide varying amounts of benefits toeach segment of the supply chain.
How could separate components of the supplychain be addressed that do not providebenefits to all supply chain segments — e.g.,pharmaceutical retail operations andwarehouse management — withoutundercutting the learning and value of havingan end-to-end supply chain involved?
The system was not validated.What would be the process for obtainingvalidation?
Only cases and units were tagged at themanufacturer.
What about pallets, interpacks, and totes?What about co-packers or repackagingoccurring at locations other thanmanufacturers?
Solid dosage products with easy handlingrequirements were selected.
What about liquids and biologics with “difficult”handling characteristics (e.g., refrigerationrequirements?
EPC test numbers were used.What happens when “real” EPC numbers areused?
A single antenna was used in a secluded areaof the distribution center.
How would multiple antennas placed in ideallocations (some of which may already havelittle space, or environments with physicallychallenging conditions such as susceptibilityto extreme temperatures, shock, dirt, anddamage) be effectively installed?
The project operated in a virtual teamenvironment, with a central coordinating groupworking with local contacts at each company.
How would a centralized managementstructure work, when a larger team and morecomplex activities would need to occur locallyat each company?
Reasonably easy control of consumer issuescould be achieved by manually removing tagsfrom packages.
What issues would be involved in mass tagging?
Given its narrow scope, the project played avery limited role in educating consumers aboutRFID/EPC.
What effort would be involved in educatingconsumers about RFID/EPC’s benefits anddispelling misconceptions?
The project included large companies fromthree segments of the pharmaceutical supplychain — manufacturers, wholesalers,and chain drug retailers.
How can other segments of thepharmaceutical value chain (biotechs,hospitals, clinics, independent pharmacies,mass merchants, secondary wholesalers, etc.)be included to broaden industry adoption toachieve greater benefits? How can smallbusinesses be involved?
To the extent possible, the team wanted to test each scenario for each product at each location.
data exchange partners.
• The testing of hardware after
deployment is critical to ensuring that
both networks and hardware are
configured properly. This can be a time-
consuming activity that needs to be
taken into account when multiple
organizations are all trying to coordinate
and move to the same schedule.
• There is limited tag real estate on virtually
all pharmaceutical products which
makes external tag placement difficult.
Even if the tag is incorporated into the
label/packaging, limited labeling space
needs to be considered when
determining what additional EPC-
related information (EPC number, notice
for consumer, etc.) will be printed on the
label.
• The expectation is that when reading a
single case of product, 100% of the units
will be able to be read within the case.
However, major changes to product
handling processes may be required to
position cases so they can be scanned
one at a time in order to read 100% of all
the units in the case. Even then, tag
orientation within packaging affects
readability. Packaging configurations
and materials may have to be changed
to enable RFID readability. Depending
on the content of the product and the
packaging format it still may not be
possible to read each individual unit in a
case, which means inference logic may
be appropriate at some points in the
supply chain. In some instances during
Release 1, Group 2 Verification,
individual cases were read for up to 10
minutes and then inference logic was
used for all remaining unread units. In
the instance where all the units in the
case were read, the read times tended
to be between 1 and 5 minutes per
case.
• Printing human-readable EPC numbers
on RFID tags is valuable because it
provides an acceptable method for
redundancy in the situation where a tag
stops working and a method to find a
specified unit without a reader if
required.
• An RFID-based production system will
have to be individually designed and
tuned per company to account for
packaging characteristics of products,
isolation of RF in read field, and local
network considerations. Consideration
will have to be given to how RFID
hardware interacts with other devices.
• HF and UHF technologies should be
further investigated; specifically under
adverse conditions and to optimize the
strengths of each frequency considering
product/packaging form factor
(liquids/metals) at the same time as
process requirements (long
distance/granular location).
• The volume of data collected will be
significant. Processes must be in place to
filter and appropriately leverage the
data that RFID can provide.
The participants' understanding and
experience in working with RFID/EPC in the
pharmaceutical industry has grown
tremendously; but they need to keep learning.
The project was highly valuable in how it
surfaced issues that the team either did not
contemplate going in or did not believe would
present difficulties. The highly regulated nature of
the industry and consumer concerns drove many
of these. For example, time-consuming issues
were encountered around tag size, wording,
acceptable adhesives, and location, to name a
few. Working through these issues has provided
valuable insight.
Other issues, however, will require
additional study. For example, it will be critical to
determine how to devise scaleable solutions that
address data security and visibility. So will
solidifying the steps to obtain validation for
systems and processes, as well as approaching
the significant effort to integrate RFID/EPC
technology with core transaction systems.10
The industry needs to continue to
actively engage with Federal/state regulatory
agencies, standards-setting organizations, and
industry trade associations to gain involvement in
forthcoming releases of this project.
Creating reasonable consistency of
standards globally should be a key goal. It will
also be critical to mutually establish timetables
that reflect the state and effectiveness of
RFID/EPC technology and associated processes,
and the pharmaceutical industry's experience in
leveraging them.
42 43
BUSINESS PROCESSCHALLENGES/ISSUES FOR RELEASE
1, GROUP 1
RESOLUTIONS FOR RELEASE 1,GROUP 2 IMPACTS TO RELEASE 1, GROUP 2
Tagged inventory was mixed with regularinventory. • Only one case label was placed on the
case/tote and it was difficult to distin-guishfor the project.
• Only a limited number of operationspersonnel were aware of the activity, so ifthey were not involved, the product was notkept separate.
Each company was encouraged to bringmultiple participants to training and tocommunicate the project broadly.
No cases of product were mixed with regularinventory. All tagged cases and units werereceived per the verification schedule.
One roll of tags was discovered to have human-readable EPC numbers that differed from thenumbers on the chips.
Tag production processes were updated toreduce the likelihood of this error occurringagain. In addition, Accenture verified the tagsprior to shipping to ensure the humanreadableEPC numbers on the tags matched those on thechip and that the EPC numbers were nottruncated.
All tags sent to manufacturers were 100%readable and there were no errors encounteredwith EPC number not matching those on screen.
For Release 1, Group 1, training was conductedtwo months prior to Verification, a long gapbetween training and the proof of concept.
The training for Release 1, Group 2 wasdelivered two weeks prior to the start ofVerification.
Completing training prior to verification did limitthe number of support calls.
Support needs to be available at all times.Distribution operations hours start and end early.In addition, there are specific days when ordersare placed at the facilities.
Release 1, Group 2 built the Verificationschedule based on frequency of orders andunderstanding of DC operating hours.
The verification schedule followed the normalshipping days and procedures for eachcompany.
Users were unclear of what reason code to usewhen decommissioning.
Reason codes were addressed during thetraining.
All reason codes were entered successfully inRelease 1, Group 2.
There were communication breakdownsbetween ordering personnel at some of theshipping locations and their counterparts at thereceiving locations.
A step to e-mail as well as fax the order wasincluded into the Verification process.
With the new process, we were able to identifyquickly when an order was not received andensure that the orders were sent.
The users experienced slow read times duringscanning. Frequent manipulation of theorientation of the tags to the antennae wasrequired.
Due to the nature of the solution there was somenetwork latency. Release 1, Group 2 tuned thehardware and evaluated the feasibility ofdeploying an additional antenna to Release 1,Group 2 sites shipping or receiving cases toimprove performance.
Two antennas were shipped to locationsshipping or receiving cases. This did assist thegroup in reading units.
The serialization of product requires that anorder be fulfilled with the specific expectedcase of product instead of any case of thatproduct.
This point was addressed during training.Shipments were sent successfully in Release 1,Group 2.
Missing URL of navigation page, WM page, andTPM page.
Accenture conducted a round of testing prior tothe start of Verification to ensure that all theappropriate URLs were available for eachcompany. Also at training, the trainerdemonstrated how to log into the systemthrough the navigation page, WM page, andTPM page.
All URLS were available for use for eachcompany.
SIDEBAR 5: RELEASE 1, GROUP 1 CHALLENGESAND RELEASE 1, GROUP 2 RESOLUTIONS/IMPACT
www.sap.com
4544
The RFID hype is rapidly turning toreality in 2005. Given the existing costson tags and reader infrastructure,companies have to carefully considerhow the use of electronic tags canachieve the maximum benefit. Manydifferent types of implementations arein progress right now and companieshave to stay updated on the bestpractices and achievable benefits inimplementations in different industriesand supply chain processes to attainsuccess. One general rule is clear toeveryone: The more integrated yourun RFID activities with your SAPoperations, the higher the benefits willbe in your operation. Detailed RFIDdata has to be visible for yourdecision-making systems.
SAP SOLUTIONS FOR RFID
SAP has 2 solutions for RFID on the
market:
• RFID enabled Supply Chain Execution,
(please see ZipFile16524, Photo Nr.
11233) supporting the fast movement of
goods through the supply chain and
utilizing SAP Event Management as EPC
Information and tracking system, SAP
Auto-ID Infrastructure (AII) as RFID data
capture application and RFID adapters
for mySAP ERP.
• RFID enabled Mobile Asset
Management, (please see jpg called
“mobileasset.jpg”) supporting the
maintenance of machines and
equipment using the offline capabilities
of SAP Mobile Infrastructure in
combination with RFID tags
Other process support for RFID
operations is currently under development.
THE “TOP DOWN APPROACH“
Driven through the approach of multiple
“RFID middleware” providers, many companies
are starting to utilize RFID technology through
what we call the “Bottom-Up-Approach”. Data
capture takes place first, and then the
middleware tries to find out what this scan is
about and intends to aggregate the data and
update the relevant decision and reporting
systems such as supply chain management or
ERP Systems. This requires a lot of parallel checks
and business logic in the middleware systems,
which might be different to the rules and checks
in the decision support systems. In addition, the
business process does not have the chance to
do something different than before, because an
operator will get aggregated data updates at
times that cannot be foreseen. This limits the
benefits of this technology.
Therefore, SAP recommends driving RFID
implementations using a more integrated
approach, which gives the decision systems the
chance to utilize the granularity of RFID data in
the best possible way. The system that is in
charge of the business process decides what
granularity of data it expects and generates so
called “expected” events, which will be
checked against reality through the RFID reads.
This is what we call the “Top-Down Approach”.
AUTO-ID INFRASTRUCTURE STANDALONE
IMPLEMENTATIONS
Even though the business benefit of RFID
can be higher through a higher level of
integration, many companies are simply
searching for ways of doing this integration in a
step-by-step approach. SAP supports these
implementation needs through the capability of
implementing Auto-ID Infrastructure in this
stepwise approach, starting with a standalone
scenario. This means that, in the first
implementation step, integration with other
systems is not required. AII then just captures and
tracks the RFID data without connecting to the
relevant business process. In subsequent
implementation phases, the connection to
existing systems can be established and
integration levels can be chosen.
INTEGRATION WITH WAREHOUSE MANAGEMENT
Inside the four walls, implementations of
RFID – for example, warehouse management –
remain challenging. Right now, RFID technology
does not offer many advantages over barcode
for use in a warehouse environment. Bulk reads of
RFID cases on pallets or within bins still do not
achieve six sigma accuracy. Usable forklift
readers are still a rarity. Conveyor scanners
require orientation of the goods as well as
barcode readers.
Most implementations focus on
packaging and RFID application operations.
These operations are supported by SAP as are
loading operations at the dock.
Some companies have successfully
implemented RFID as a system to track the
position and movements of the forklift. Through
this information – in combination with the
knowledge which task or transfer the forklift is
performing – the tasks are confirmed
FOCUS – SAP
HOW TO GAIN THE BEST
BENEFITS FROMYOUR RFID
IMPLEMENTATIONDr. C. Leßmöllmann, SAP AG
4746
Conceptually, RFID is straightforward:a passive antenna attached to anitem gives item data to anotherdevice. In a real-world retailenvironment, the practical issues arenumerous. With extensive expertise inenterprise applications, and longexperience in retail settings, SAPunderstood this coming into theproject. “In theory, RFID is simple,”says Thomas Riehmer, StrategicSupport Manager for SAP’s RetailGroup. “But not surprisingly, in realapplications, there are a number ofissues that must be managed.”
SAP had been working on pilot RFID
deployments since 1999, and was one of the
original members of the RFID Networking Forum.
For the METRO Group Future Store Initiative, SAP
had responsibility for the overall RFID software
architecture for inventory management.
The first challenge was managing
massive amounts of RFID data, not all of which
is useful. “RFID data must be filtered to remove
both incorrect and repeated ‘reads’,” notes
Christian Koch, Director of Strategic Retail
Programs at SAP. “Then it can be useful
information.” SAP built the filtering logic into the
RFID reader drivers. Then the “clean” RFID data
can be interpreted into business logic form.
The second challenge was integrating
the RFID feeds into middleware and the
enterprise inventory application. “You want the
RFID architecture and the enterprise
applications to be integrated in such a way that
the back-end business logic has a ‘long arm’
reach into the RFID devices,” explains Riehmer.
“For example, if an unexpected shipment
arrives at the loading dock, the staff on the
dock need to know in real time that it’s not
expected. That’s only possible if the inventory
logic reaches a longway towards the reader
device on the loading dock.” This is
accomplished by middleware that connects
every device, provides device management,
and generates preprocessed data to be
handed off to the supply chain event system
and other enterprise applications. This driver set
and middleware are the foundation of SAP’s
new Auto ID Infrastructure application.
The third challenge was creating the
application that would interpret the activity in
the supply chain. SAP designed the supply
chain event management application, which
provides tracking, tracing, and analysis of
system events. It then delivers this business
intelligence using user-specific portals for
management, in-store staff, and vendors.
SAP AND RFID: “IN THEORY, IT’S
SIMPLE…”
automatically and the position of the goods is
tracked in the background. With this method of
implementation you do not need tags on the
goods, just RFID tags on the floor and storage
bins, which provide all benefits of hands-free
operation on forklifts. Of course, picking
operations of single cases or goods still can
cause picking content errors, but most of the
benefits of this technology can be achieved
through this method of implementation.
UTILIZING BENEFITS IN ASSET TRACKING
A high benefit potential in the use of
RFID technology is achieved through asset
tracking. Of course the following rule applies:
“The higher the value of goods, the higher the
benefit from applying the RFID label”.
Benefits result from a better knowledge
as to where the goods are at what point in time.
This can subsequently reduce shrinkage,
counterfeiting and damage to the goods.
Companies can also adjust the total number of
tags they will need, by deciding where to apply
the tags – on container / pallet / case or item
level. Also, the multiple use of RFID tags in
combination with returnable packaging
materials offer benefits:
• Position of the tags on containers or
pallets can be standardized
• Better protection against moisture, dust,
damage, etc., is possible
• Higher read performance of tags
• Reduced tag costs through multiple use
of same tag and saving application
costs at new packages
• Reduced returnable packaging
material costs through better inventory
visibility
Through a better visibility in asset
tracking, companies also have an active
capability to reduce transport insurance costs.
Last but not least, asset tracking is highly relevant
for spare parts and service parts, as their
utilization and maintenance history is important
for maintenance decisions.
COLLABORATIVE BENEFITS
Done correctly, RFID provides value
opportunities in collaborative processes such as
difference handling, in-store visibility, active in-
store-out-of-stock reduction, shrinkage
reduction, deduction management, return
management, counterfeit reduction and
responsive replenishment. As these processes
usually are not yet established in companies and
require the establishment of partnerships
between manufacturers, retailers, suppliers,
wholesalers and logistics service providers, the
implementation of these processes will be found
at the bottom of the list of implementation
activities with RFID. Nevertheless, these processes
offer the highest potential benefit and will give
innovative companies the chance to move
ahead and put some distance between
themselves and their competitors.
48 49
www.unisys.com
5150
Out perform the competition, to take
advantage of sudden market shifts and
opportunities, as well as protecting your
customers, brand and bottom line against
counterfeiting and theft, and speeding
shipments through ports and other points of entry
Track and secure your in-transit goods
with real-time access to the location and
condition of every shipment, including details like
quantities, sizes, temperature and exposure to
heat or sunlight
We are helping our clients uptake RFID
based business solutions to directly address
labour, productivity and inventory improvement
opportunities in the supply chain, asset
management and security areas.
THE BASICS - HOW RFID WORKS
To track assets, shipments and products,
RFID equipment is placed at selected locations
along the supply chain. As an ‘RFID tagged’
shipment moves through the supply chain
network, devices called interrogators or tag
readers detect the presence of the tags at these
selected points. The readers use radio frequency
waves to read each tag, from a distance up to
100 metres. Direct lines of sight are not
necessary. The date-time stamp and the RFID
tag identification number for each tag detected
from each worldwide location are transmitted to
a central server. The central server synthesizes
these reports from around the world into a
tracking report available via the Internet /
Intranet. As a result, shipment receivers, carriers
and vendors can obtain the worldwide status of
a specific shipment. Reports and queries can be
tailored to meet specific information
requirements of different departments,
executives or partners.
WHY IS RFID IMPORTANT?
Competitive forces such as
globalisation, outsourcing, enhanced security
concerns and the continuous drive to improve
efficiency are creating an imperative for track &
trace to manage extended supply chains.
Organisations are addressing the following
dimensions:
• Globalisation and increased complexity
• Cost efficiency and effectiveness
• Outsourcing
• Security
• Price commoditisation
• Regulatory and ‘big buyer’ compliance
• Emerging technology
• Shareholder value imperative
The need for track and trace visibility has
never been more urgent. Big buyers and
regulators require it. Demanding and informed
customers expect it. The global economy
depends on it. Intense competition and cost
pressures threaten companies that can’t
achieve it.
Managing complex logistics and
transportation supply chains is hugely
challenging, not least since it entails optimising
performance across a multinational network of
partner organisations, suppliers, logistics
companies and customers. Organisations rely on
a range of information systems to monitor supply
chain events, to automate key supply processes,
and to accelerate speed to market. Logistics
providers are finding that RFID enables them to
track their customer’s goods, assets and even
people throughout the global supply chain. They
are also striving to integrate their systems with
suppliers and customers to reduce costs and
streamline purchase and payment processes.
But along with these opportunities, logistics
Department of Defense Asset VisibilityWorlds largest global RFID managed service for the US Army by Unisys
Figure 2
433.92MHz Range:
Active Tags Fixed Reader
Sign Post
123KHz Range :0 – 6m 0 – 100m
ToSmartChainSite Server
T3
T1
T2
These are just some of the benefitsthat RFID can deliver now.
Reduce supply chain operating and
processing costs by up to 20%, while improving
customer service at the same time
Monitor the location of orders and
condition of key equipment and resources within
the manufacturing plant, distribution centre and
throughout the supply chain at all times
Provide real-time insight into the location
and condition of materials and finished products
as they move across the supply chain – from
foreign points of origin to corporate and
domestic customers
HOW WE AREHELPING
TRANSFORMPERFORMANCEBY DEPLOYING
RFID
FOCUS – UNISYS
RFID in the Consumer Products Supply Chain
Figure 1
5352
Services that help you define clear
business priorities and means of defining value
from RFID technology through intensive
workshops or a more in-depth value assessment
project.
VALIDATE THE VALUE
Services that help validate the impact of
RFID technology through proof of concept pilots
tailored to your specific processes and operating
characteristics
REALISE THE VALUE
Services that help you realise the value
of RFID technology through strategy
development, solution implementation and
change management services
ANTI-COUNTERFEIT (GUARDIAN)
A solution that tracks products through
all nodes of a supply chain by building a custody
of ownership from factory to consumer; a so
called ‘e-pedigree’ (using Electronic Product
Codes) written directly to RFID tags. Of high
value to organizations that need to protect
products and brands against the threat of
counterfeit intrusion (e.g. pharma, clothing, hi-
tech).
4SIGHT
A solution that provides 24*7 visibility of
global shipments using RFID technology to
provide more timely, accurate and granular
shipment status information. Of high value to
organsisations that need to know the status of
shipments and want to use enhanced visibility to
better manage supply and demand (e.g.
floating inventory), customer service and cost
control.
STRATEGIC ASSET AND PERSONNEL MANAGEMENT
A solution that enables the
management of people, assets and equipment
involved in a variety of operations management
environments ranging from construction, oil and
gas to enterprise property management. Of
high value to organsisations that need to
maintain a productive asset base and/or
provide a safe and secure working environment.
WHAT IS OUR APPROACH?
Whether your supply chain challenge is
responding to regulatory or ‘big buyer’
mandates, tracking customer orders, managing
assets and inventory or scheduling fleet
operations, Unisys can show you how to use RFID
technology to operate more effectively. We
clearly define value propositions and develop
strategies and solutions based on your unique
needs and objectives.
We leverage Unisys’s unique 3D Visible
Enterprise (VE) methodology to underpin the
workshop delivery and deliver the required
outputs. 3D-VE reveals the interactions and hard-
to-see relationships through business simulation
modeling; from strategy to hardware
infrastructure.
Our team is with you through the entire
process of incorporating both tried and tested
and innovative solutions into your company’s
operations. We can manage all aspects of your
requirements; including consulting, software
development, systems integration, operations
and training. It can start with our assistance to
define the value, business priorities and strategy.
As appropriate, we then begin to develop a
tailored solution to meet your needs.
“The Unisys solution will allow us to meet
emerging government standards and
regulations for security, while also providing
business benefits such as lower inventory,
reduced wait times, higher service levels and
improved risk management.” – Gary Stopka,
Vice President, Sara Lee Coffee & Tea
Foodservice.
Department of Defense Asset VisibilityWorlds largest global RFID managed service for the US Army by Unisys
Figure 4
Callum Moy
Unisys
Practice Director of Supply
Chain Management
Callum Moy was appointed Practice Director of Supply
Chain Management (SCM) in the Enterprise
Transformation Services Division of Unisys in 2002. In
this position he is responsible for leading SCM client
services and change programmes across the entire
field of SCM. He has special responsibility for RFID
Services in the UK and Europe. Callum contributes
widely across the business media from trade
publications to national radio.
provider companies face many challenges in
optimising performance and managing risk
across the global supply chain.
WHAT IS OUR EXPERIENCE?
As independent consultants and solution
implementers, Unisys leverages in-house
expertise and vendor partnerships to provide the
entire range of business and technical services to
clients seeking to achieve world-class supply
chain management. All our consultants have
extensive practical experience implementing
solutions within specific sectors and the unique
operational or technical challenges presented
by each business environment.
Here are some the areas we are
currently active designing, piloting and
deploying effective -based networks:
Since 1994, we have served as the prime
integrator and provider of managed services for
the world’s largest RFID enabled network,
operated by the U.S. Department of Defense,
securing more than 25,000 containers of food,
blood, medications and ordnance per day in
more than 50 countries, under very demanding
conditions.
We have led more than a dozen RFID
implementations and pilots in consumer
electronics, apparel, retail, food and beverage,
airlines, banking and government.
We are leading four projects designed
to create traffic efficiency and “zero-gap”
container security at U.S. ports, as part of the U.S.
Transport Security Administration’s Operation
Safe Commerce program. <Insert Figure 2>
Our presence in the global
transportation marketplace, where our solutions
‘lift’ 30% of the worlds cargo and passengers, has
placed us centre stage in advising and building
RFID networks that our clients use to deliver time
critical services to their customers
As a founding member of EPCglobal, we
are well versed in the business case analysis and
value targeting across all elements of the supply
chain, CRM and enterprise asset management.
We operate Centres of Excellence in the
U.K. and in North America, for accelerated
development of strategies and business cases.
Plus, our ‘jump start’ program, based on radio
beacons, can be implemented quickly and
scaled easily, with minimal disruptions of current
operations
In summary our services to drive business
value through a range from strategy and
business case through solution implementation
and business change to running systems to
deliver benefits. Furthermore, we can even offer
our ES7000 server machines (with the lowest total
cost of ownership on the market) to provide the
bandwidth and processing power.
UNISYS RFID SOLUTIONS
With Unisys RFID solutions, organisations
in both the private and public sector can drive
greater performance and increased shareholder
value through enhanced visibility and security.
RFID solutions are designed to maintain visibility
at every step along the value chain, from foreign
points of origin to domestic store shelves. A
combination of RFID tags and readers provide
real-time location and condition data as raw
materials, finished goods and people move on
land, at sea or in the air, as well as at border
crossings, manufacturing plants and distribution
centers. Our RFID solutions include the following:
DEFINE THE VALUE
RawMaterial
Assets Storage Wholesalers Customers
RFID enables higher performance across key process attributes.
LabourIntensive
High
Low
InventoryCover
ProductVisibility
Process Attributes
LabourIntensive
InventoryCover
Labour Intensive
InventoryCover
ProductVisibility
ProductVisibility
Impact of RFID on Supply Chain Management
Figure 3
54 55
www.siemens.com
5756
of goods – from monitoring of incoming goods,
to stock-taking, to merchandise security, to cash
registration in various outlets. The end result is
significant. Kaufhof Warenhaus is able to
accelerate its process for incoming goods
minimizing transport “losses” and thus increase
work efficiency, achieve added-value, cost
advantage, quality assurance and high-level
customer satisfaction. Moreover, the company’s
image as an innovative retailer is enhanced.
During the test phase of Kaufhof
Warenhaus’ RFID project, Siemens Business
Services was engaged to provide consulting on
the process level and technical requirements.
The IT service provider was also involved in
designing and building the solution, managing
the project and partner as well as providing
evaluation and profitability analysis.
Siemens Business Services is optimistic
about the future of RFID. The company has
shown its commitment in the technology by
becoming a member of METRO Group Future
Store Initiative which vendors involved in RFID
conduct test on new technologies and ideas in
practical applications and develop them further
with the long-term goal of developing RFID
standards for the retail trade. Siemens Business
Services has also invested in two centers for RFID:
the RFID research lab in Munich in cooperation
with Intel and the Fraunhofer Institute’s RFID
center in Magdeburg.
At the joint Siemens Business Services-
Intel center, experts from Intel and Siemens
Business Services are using comprehensive case
studies from various sectors of industry to show
how RFID accelerates logistics processes and
lowers costs. At the center, interested parties
can examine and try out various RFID reader
devices in combination with powerful Intel®
Itanium® 2 servers. The software used comprises
the SAP modules mySAP SCM, mySAP CRM, SAP
Mobile Asset Management and, as the
integration platform, SAP NetWeaver.
The center is one of the first RFID
laboratories worldwide to carry out integration
on the basis of the SAP NetWeaver platform,
which also incorporates mobile devices.
RFID is an exciting technology. It saves
time, money, and resources. Commitment in RFID
push by vendors like Siemens Business Services
signifies the potential growth of the technology in
the IT space. With the eventual adoption and
market acceptance of RFID standard worldwide,
the future of RFID technology definitely looks
bright.
RFID, or Radio FrequencyIdentification, is a hot topic in theindustry today. A technologyintroduced commercially back in the1980s, RFID has been put into spotlightonce again in the 21st century.
Siemens Business Services which is a
process consultant and solution provider for RFID
has implemented more than a dozen RFID
projects for diverse organizations including those
for patent management in law firms, paint shop
for aircraft industry, vehicle location system for
BMW and warehousing and distribution for Otto-
Versand, a mail-order company. These
successful projects truly demonstrate the
unlimited usage of RFID application in different
industries.
To further illustrate the possibility of
deploying RFID beyond assets tracking and in a
different environment is the use of the
technology with human beings. At Jacobi
Medical Center in New York, Siemens Business
Services is helping the hospital to run a pilot
project on RFID where hospital patients are fitted
with a wristband with an RFID chip that contains
their name, birth date, gender, and medical
record number. These are linked to hospital
network that connects patient record to labs,
billing and pharmacy. Doctor and nurses in the
hospital are equipped with a tablet PC with RFID
reader and with a Wi-Fi connection to access
the network.
With the implementation, caregivers’
administrative tasks are simpler and less
paperworks are required. Furthermore, they do
not need to return to a nurse’s workstation to
enter information. It also gives the caregivers
more time to spend with the patients and less on
administration.
There are numerous benefits one could
derive from RFID implementation: reduction of
administrative errors without human intervention,
synchronization of flow of goods across supply
chain, increased productivity, improved global
visibility and real-time collaboration and
communication across supply chain, use of real-
time data and authentication, cost and time
savings, gained competitive advantage as well
as increased customer satisfaction, just to name
a few.
In Germany, for example, Kaufhof
Warenhaus AG, one of Europe’s leading
department stores, is piloting RFID to speed up its
logistic processes. With the deployment of RFID,
the retailer is able to streamline its management
RFID ATSIEMENS
BUSINESSSERVICES
FOCUS – SIEMENS BUSINESS SERCICES
