Transcription
Radio Frequency Identification (RFID)As A Competitive Advantage inSupply Chain ManagementTeam 4:Arthur CabanbanSusmita KarDan EverdingPhanichandra GunturuFayez HjoujIhab Obeidi
RFID in Supply Chain ManagementAgendaWhat is Supply Chain ManagementSupply Chain IssuesIntro to RFID TechnologyAdvantages of RFID in Supply ChainExamples of RFID in useCurrent issues with RFIDConclusion
RFID in Supply Chain ManagementWhat is Supply Chain Management?Supply Chain Management is the technique to advanceand improve company’s performance in respect toprocesses for product and service design, purchasing,invoicing, inventory management, distribution, customersatisfaction and other elements of the supply chain.
RFID in Supply Chain Management
RFID in Supply Chain ManagementWhy do companies do it?Obtain a competitive advantageIncreased profit margin/salesIncreased customer satisfactionSupply Chain ManagementThe complexity and the cost of supply chainhave increased in the past two decades.
RFID in Supply Chain ManagementWhat are basic components for Supply eringReturning
RFID in Supply Chain ManagementAdvantages of supply chain managementDeliveryCost controlForecastingProduct qualityData managementCustomer service and relationships
RFID in Supply Chain ManagementExamples of Supply Chain Management Great Pyramids of Egypt 100,000 people Materials from all parts of the country Labor and slave
RFID in Supply Chain ManagementThe Great wall of China7th century BC to 17thcenturyMillions of people worked tobuild itConstruction materials andlabors
RFID in Supply Chain ManagementCurrent examplesIn the early 1990s, manufacturers startedto outsource their warehousing anddistribution functions to third-partylogistics (3PL) providersUPS and FedEx started to guaranteedelivery times, allowing for betterplanning and forecastingThe 2 largest package delivery companiesand global leaders in supply chain servicesInternet shipment tracking and over nightdelivery
RFID in Supply Chain ManagementCurrent supply chain issuesIncorrect goods shippedLate delivery of goodsDifficulty locating goodsExcessive effort required to accurately reconcile physicalgoods to customer orders/returnsGoods misplaced/stolenInaccurate forecast of goodsPaper based business processesMultiple re-entry of informationPeople intensive practicesManual reconciliation processesHuman interaction on business processesLatency of data
RFID in Supply Chain ManagementRFID is one potential solution so what is it?Introduction of RFID into Supply Chain Management .its been around for awhile. First use - WWII – ID Allied planes crossing English Channel– transponders installed “friend or foe” 1970’s – Nuclear research – tag workers, waste, products Contact-less payment – toll bridges & roads Mobil Speedpass – tags in cars – 15% increase in fuel usageLivestock industry – track diseases/overall health measuringtemperature (Mad cow disease), minimize brandingRailroad industry – bar codes failed
RFID in Supply Chain ManagementWhat is the basic process?Readers emanate a low level radiofrequency magnetic field coiledantennaTag – antenna/integrated circuit(IC) convert the magnetic field intocurrent to run the circuit(passivetags)Enable transfer of IC's memorycontents - electromagnetic signalReader checks to ensure signal isvalid, decoded and restructured tothe end-user's host computerRestructuring provides the data inan electrical form and also abidesby the the end-user's protocolOnce restructured, it is sent to thehost user
RFID in Supply Chain ManagementReader/antenna – used to read write dataTag stores & transmits to readerTypesActivePassive/activePurely passiveComm protocol – pre-determined radio-frequency
RFID in Supply Chain Management
RFID in Supply Chain ManagementWhat RFID is:Provides non-contact, non-line-of-sight operationVery difficult to counterfeitWhat RFID is NOT:The best solution for EVERY applicationA good substitute for BAD business practices orpoor managementSame to all businessesnew!
RFID in Supply Chain ManagementExamples of RFID in Supply Chain ManagementPharmaceuticals – possibly, the most immediate need.Counterfeiting - WHO 7-8% of drugs phonySell back to US & give the sick Borax!Biggest problem in developing countries, but expected tospreadPrescription Drug Marketing Act signed in 1988 neverenforced – drug pedigrees 2 billion in lost revenues to pharma industryVerisign and use in humans (recent FDA approval)
RFID in Supply Chain ManagementExamples of RFID in Supply Chain ManagementBeginning use of RFID for top 100 suppliers in 2005RFID tags for cases and palletsSignificant savings due to more automated functionsTechnology PushInnovation
RFID in Supply Chain ManagementOperational SavingsScanning - 6.7 BillionOut-of-stock - 600 MillionShrink - 575 MillionTracking 300 MillionProduct Visibility - 180 MillionAnnual Savings: 8.355 Billion
RFID in Supply Chain ManagementOther playersHewlett-PackardUS Department of DefenseMarks & SpencerFresh Food TrackingGapApparel TrackingBritish AirwaysPassenger BaggageMost of the above did pilot studies
RFID in Supply Chain ManagementWhat is so promising about RFID?Been around forever – only recently economicallyviableIncreased data securityAutomate & speed processesImprove productivity & customer serviceAccurate info about location of goods & peopleTighten controls through supply chain/distributionmanagementNo line of site requiredWorks in harsh environmentRemoves element of human errorAbility to store historical information aboutproductFrom read-only to read-write
RFID in Supply Chain ManagementWhy companies should implement RFID in theirsupply chain management strategy?Improved Warehouse EfficienciesLower Inventory LevelsLower Deductions and Charge BacksImproved Traceability and RecallsBetter in Stock PositionImproved ServiceReduced Shipping CostsBetter Supplier ManagementTheft Prevention
RFID in Supply Chain ManagementTechnicalStrategicRFID ChallengesSystemsOthersOperational
RFID in Supply Chain ManagementTechnology Performance Challenges:Reader detection rates andranges, data accuracyType of product-Metal, LiquidsData
RFID in Supply Chain ManagementSystem ChallengesAccess to EPC data : StandardizationwatchHardware and Software integration:Finding and partnering with thecorrect software provider will be akey.EPC- Electronic Product Code
RFID in Supply Chain ManagementOperational Challenges:Barcode vs. RFID adoptionNew technology learning curve andSite readinessProduct/tag associations
RFID in Supply Chain ManagementStrategic Challenges:Understanding RFID - ForcedBusiness Process changesHow to deal with a changingenvironmentEstablishing a business Case andBuilding the RFID Roadmap : ROIOther CostsHuman resource strategic challenges
RFID in Supply Chain ManagementOther ChallengesLack of knowledge of the technologyand Perceived to be a newtechnology“Wait and see” mentalityEducation
RFID in Supply Chain ManagementARC conducted an Emerging Practices studywhere they talked to 24 companies that wereactively investing in EPC RFID (ElectronicProduct Code Radio Frequency Identification)“Survey on ROI”BY - Analysis Research Consultancy
RFID in Supply Chain ManagementWhere is RFID in TALC in terms of Supply ChainManagement?RFID In supply chain is here
RFID in Supply Chain ManagementResearch PhaseA four stepsolution ApproachExperimentationPhaseBusiness PilotPhaseDeploymentPhase
A probable journey that an organization will go throughto establish and prove the business value of RFID:Deployment PhaseInvestment in DollarsBusiness PilotPhaseResearchPhase Business CaseAnalysis Informationgathering Checkingbusiness fit KnowledgesharingExperimentationPhase Case forexperimentation Proof of Concept Test environments Low riskinvestment Case for furtherinvestment Detailed project plan Pilot execution Productionenvironment Pilot review andfindings captured& shared Case for furtherinvestmentTime Project processpromulgated Project submissions Project approval/execution Project review(business case) Findings captured& shared
Managerial questions to implement RFIDin the Supply Chain?Are you a supplier to Wal-Mart, the Department ofDefense, or other major retailers?Do you have real-time inventory visibility in yourwarehouses or across your supply chain?Are your current receiving and shipping processescumbersome?Do you have fixed assets that are not well-trackedthroughout the supply chain?Do inaccuracies/discrepancies in accounting forgoods in trading partner commerce lead to inventoryor invoice adjustments, manual reconciliation orother problems?Do you have products that require lifecycletracking or are subject to counterfeiting and graymarket channel activities?
RFID in Supply Chain ManagementLESSONS LEARNED AND RECOMMENDATIONSDefine your business planCustomize applications for your specific businessDifferent for every business or companyUnderstand budget and ROIFocus on implementation strategy tied to market challengeProve the technology in your environmentDefine label position, size, antenna, tag aspectsPilot the application in a controlled settingDefine your project roadmap/deployment strategyChanges over time, scalabilityUnderstand long term benefits (not just immediate)Be patient with current trends, early technology stagesDisruptive innovation in terms of supply chain
RFID in Supply Chain ManagementQuotes“One of the great lessons of US economichistory is that you get benefits from newtechnology long after the innovation.That comes from businesses figuring outhow to use it right” Ethan Harries Sr. Economist“RFID will be larger than Y2K. Ultimately,RFID will be a core technology deployedacross the supply chain in mostindustries”AMR Research
RFID in Supply Chain ManagementQ&AThank you
RFID in Supply Chain Management Quotes {"One of the great lessons of US economic history is that you get benefits from new technology long after the innovation. That comes from businesses figuring out how to use it right" Ethan Harries Sr. Economist {"RFID will be larger than Y2K. Ultimately, RFID will be a core technology deployed
