A Logistics Service Provider offers RFID solutions for the Retail Industry - The way forward for RFID in DHL. Andreas Kruse
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2 A Logistics Service Provider offers RFID solutions for the Retail Industry - The way forward for RFID in DHL Andreas Kruse RFID Journal Live! Europe Prague, November 6th 2008
3 Content DPWN/DHL RFID Strategy Organizational Set-Up RFID France Roll Out1 Lessons learned Next Steps
4 Deutsche Post World Net Worlds leading Logistics Company Revenue (2007): billions eur Earnings (EBIT 2007): 3.2 billions eur Employees (31th december 2006): 526,112 Locations: > 6,500 in more than 220 countries and territories Dpwn corporate divisions: mail, logistics and finance Transport volume More than 70 millions letters a day in Germany 6,400 millions international letters from Deutschland 2,400 millions tons of air freight 1,200 millions TEU sea freight
5 A Global Player with Strongly Positioned Divisions Mail Express Logistics Finance Germany Biggest provider of mail services in Europe Delivering mail to about 40 million households h in Germany More than 71 million shipments per day Worldwide No. 1 in cross border express services Strong presence in more than 220 countries and dterritories i More than 4.2 million customers worldwide 120,000 destinations served Worldwide No. 1 in global contract logistics No. 1 in global air freight No. 1 in global sea freight Strong customer base (50% of Forbes 500 companies) Germany Leading retail bank in Germany 12.3 million customers 17.2 million savings accounts USA Worldwide finance services for logistics industry
6 Sales and Marketing Key enablers for innovation Selling and Promoting an idea after development is just a logic and subsequent step, however it is the key success factor for innovation Only with bringing the idea to market and generating value the innovation process was successful Market Developing and implementing a market Scouting and Concept Detailing Implementation success Research concept at an early stage of the process is, hence, a must Without having the entrepreneurial mindset and the will to bring the idea to market it does not even make sense to start Development Effort Freeing up capacities at TIM by brining projects to market is essential to keep Sales and Marketing Effort momentum in the innovation funnel
7 Need to bundle RFID activities and work towards a shared DPWN RFID strategy Current Situation DPWN About 100 isolated RFID pilots without further implementation Lack of knowledge about competitors RFID engagement g High variety of RFID applications within DPWN no standardization Lacking customer commitment to implement RFID Missing institutional set-up for RFID function Need for action Re-active approach no active development of RFID solutions Missing exchange of knowledge within DPWN Termination of RFID projects due to missing mid- term ROI Join efforts and direct activities towards a common DPWN RFID strategy
8 DPWN RFID Strategy Vision and Mission Statement Vision DPWN is recognized as leading Logistic Service Provider offering RFID solutions along the entire supply chain combining state-of-the-art the art technologies with innovative applications Mission Statement DPWN masters latest RFID standards and drives the standard setting process from a supply chain perspective DPWN becomes leading edge in developing innovative RFID solutions for its customers combining RFID applications with other state-of-the-art technologies DPWN s role as a leading information supplier in the logistics industry is leveraged by offering innovative RFID solutions
9 DPWN will not be the RFID standard setter but can play an important role as a facilitator Key strategic assumptions RFID-deployment will be demand driven taking state-of-the-art RFID technology that is available RFID technology supplier are observant and waiting for initial push from demand side Retail industry and selected manufacturing industries with valuable items will determine initial RFID demand Retailers especially from the FMCG-Industry will determine the speed of adoption of RFID and also have the biggest impact on RFID-Standards to be used Manufactures (early followers) will get RFID-enabled; pace to deploy RFID solutions depending on market pressure from retail partners and own need to develop RFID solutions Logistic Service provider are asked to provide RFID solutions (RFID-Toolkit) and to bring retailer and manufacturer together (facilitator role) DPWN working as facilitator providing RFID solutions based on existing RFID standards and technologies
10 Development of RFID solutions is focused with option to broaden scope in the future Strategic direction of RFID development Business Units DESC Freight/DGF Express Mail/Parcel Regions EMEA APAC Rest of World Industries Consumer/ Retail Electronics Automotive Health Care Further Industries Services Barcode Replacement Life Cycle Tracking Condition Tracking Other Services RFID development focused according to highest market potential that has been identified Phase 1 Phase 2 Phase 3
11 DPWN as facilitator can align efforts of retailers & manufacturers to develop industry solutions for RFID DPWN s Facilitator Role Facilitator Production Inefficient for manufacturer Inefficient for retailer Outlet Manufacturers need to serve all retail partners with RFID solution to retrieve synergies Retailers need to receive common RFID solution from all suppliers
12 Need for different approach per Business Unit to drive RFID initiatives BU-specific paths of RFID evolution DESC Freight/DGF/Express Mail Across Industries Industryspecific Customerspecific Single lane D2 D1 D4 D3 D5 Network D2 D1 D4 D3 D5??? Pure RFID enhanced RFID solutions Focus on key customers and basic solutions first Focus on single lanes or small isolated networks first Focus still to be determined
13 Barcode Replacement is only first step in evolution of information providing services supported by RFID Fields of Application Barcode Replacement Life Cycle Tracking Condition Tracking Security Applications Dynamic Location Tracking Potential Applications (Examples) Unique Product Identification Material Management Process Control/Automation Self Inventory Solutions Replacement Control Reversed Logistic Solutions Temperature Sensors Humidity Sensors Shock Sensors Opening Event Detection Secure Lock Counterfeiting Solutions Mobile Fixed Intermodal Value added Services Detect Inform Re-Act
14 Our organizational Set Up Organizational set-up GBS Mail Express TIM* Auto ID & Standards Central RFID Unit to Co-ordinate group-wide RFID- Activities and knowledge-transfer Develop innovative RFID solutions and support implementation Manage RFID standard setting process RF FID Steering Group Freight GCS RFID Community DESC CC RFID Community to Exchange/transfer experience on RFID projects Use common standards and speak same RFID-language Build BU-specific organizational setup for RFID * Technology & Innovation Management
15 Certain RFID tasks need to be tackled on corporate level in a coordinated approach Objectives and Tasks for corporate function Auto-ID & Standards RFID Strategy & Community Develop common RFID strategy and push implementation Co-ordinate group-wide RFID-Activities and knowledge-transfer Build up RFID community and external network Standards & Authorities Technology Assessment System Integration Manage RFID standard setting process Deal with relevant RFID authorities Co-ordinate risk-management Scout new RFID technologies Check usability of RFID components Develop integrated solutions and test solutions in RFID lab Set up professional Partner management Advise BUs in technical RFID set-up Support RFID Pilots and Deployment Act as technical Project Coordinator
16 Implementation of RFID Strategy divided into 3 waves Focus current activities Status quo Analysis "Wave 2" Review RFID "Wave 1" Initiatives First group-wide exchange of ideas Deployment of Build institutional setting for RFID activities (governance) Develop/commit to DPWN RFID strategy Initiate co-ordinated attempt to develop first customer specific RFID solutions (light-house projects) customer specific RFID solutions (lighthouse-projects) Extension customer to industry solutions and exploit synergies Expand RFID applications from pure barcode replacement to further solutions "Wave 3" Expand RFID activities to first isolated networks and take over role as facilitator t Provide integrated RFID solution set for entire group Become overall information provider combining RFID with other innovative technologies Time / /14
17 DHL RFID Activities: Infrastructure & Standards General Projects RFID Hardware Analyses RFID Middleware Analyses RFID Research Projects RFID Lab Environment RFID Marketing and Communication Networks Within EPOS Platform Cross divisional (internal) RFID Public Network RFID Trainings (with EECC) Standardization Work within EPC global, ISO Work together with EECC RFID HW Evaluation RFID MW Evaluation EPCIS Program Sem ProM Aletheia (by 2010) Develop and extend RFID Lab Area Campaign about RFID Project CERFID Create RFID Knowledge Base, Establish RFID Community RFID Networking in the public arena (EU/German Parliament, RFID expert group) Inhouse Trainings Continue Work within EPC Global, ISO Continue collaboration with EECC Concentration on networks, knowledge transfer and standards
18 RFID-Projects and Roll Outs DHL Corporate Fashion Sony DHL Metro DHL
19 DHL Corporate Wear Corporat Wear for employees in 5000 sites/ 220 countries 60 different articles, but 1500 open picking positions different SKU (sizes and countries of origin) Sourcing from numerous suppliers from 31 production sites ( 90% in Asia) Ordering via Web Tool SAP based solution integrated in WHMS Columbus Hamburg Shanghai Hong Kong
20 DHL Corporate Wear Processes with RFID Supplier DHL ESC Distribution Center Taging Inbound Order Picking Packing Pallet packing Outbound DHL MA DHL ESC DHL Freight Last Mile Box Check Inbound Pallet check
21 DHL Corporate Wear - Benefits Goods receipt: Reduction of inbound control by 90% Pack process: Reduction by 75% Reduction error rate by 30% Outbound control: Transparency in outbound operation
22 DHL Corporate Wear - Documentation
23 SONY - DHL Sony Deutschland located in Berlin App. 800 Mio. Turnover App active SKU DC in NL (Tilburg) Direct Store delivery for app customers through diffrent LSP
24 SONY - DHL 3 main questions Did the customer receive the shipment? Did the LSP deliver all goods expected? Did the Sony DC ship all the goods?
25 SONY - DHL RFID in Sony DC Tilburg RFID & Video Packing RFID labeled cartons on pallet Sorting RFID & Video loading process
26 SONY DHL RFID in DHL Freight Sony DC Tilburg 3 RFID Portals in DHL Freight Shipment DESADV IFTSTA Customer Delivery
27 METRO Cash & Carry France / DHL Exel Supply Chain France RFID Initiative RFID Initiative RFID Roll Out September 2008
28 METRO Cash & Carry France - DESC: Current business DHL provides to METRO France Dry and Beverage Logistics (1.3 million pallets/year) Key figures 6 Grocery and Beverages DC 1,3 Million pallets per year 89 Stores
29 The DHL - MCCF RFID Initiative is under business leadership Vision Objectives Enhance METRO France Supply Chain with an integrated RFID service Focus on a single part of the supply chain to get an immediate and operational result Enhanced Track and Trace solution at pallet level Improve productivity and quality for inbound in Metro stores and for outbound in DHL Distribution Centers Promote a short term RFID open solution Proposed Work in respect of DPWN & METRO Group RFID Initiative and Components share results
30 DHL - MCCF operational specifications Business oriented : Improvement of service level leading high reduction of checks (100% loading =100% unloading) with a read rate > 99,9% Result independent from human factors Compliant with industry global standards and DHL and METRO Group strategy No time consuming for METRO IT resources All type of packaging g read (liquid, metal, plastic, ) Operational in 2008 for the new logistics road map For DHL, develop a multi customer oriented solution
31 DHL - MCCF operational specifications Business oriented : Improvement of service level leading high reduction of checks (100% loading =100% unloading) with a read rate > 99,9% Result independent from human factors Compliant with industry global standards and DHL and METRO Group strategy No time consuming for METRO IT resources All type of packaging read (liquid, metal, plastic, ) Operational in 2008 for the new logistics road map For DHL, develop a multi customer oriented solution
32 METRO Cash&Carry France - DESC: RFID Initiative RFID pilot in France running since July 2005, 2 DHL dry grocery Distribution Centers 3 METRO stores equipped Tagging Break Bulk Cross Docking Pallets and Centralized Stock Pallets Tracking from outbound to in store Pilots have also been run on parcels tagging and pallets inventory but these processes have not been selected for the roll out Expected Roll Out of full pallet RFID Tracking 6 beverage and dry Distribution Centers 89 Cash & Carry Stores ( + new opening stores) Project organized by 3 partners METRO Cash&Carry France / MGI DHL Exel Supply Chain (DESC) NBG ID who provides RFID components, technical expertise and project management for the roll out
33 Metro Cash&Carry France DESC Roll Out Optimization of shipment process through RFID enabled outbound process METRO Portal in Cash&Carry Outlet DHL Portals in Salon de Provence
34 From 4 to 25 Gates operate in one DHL site Outbound Gates in Arles Outbound Gates in Loire sur Rhone
35 MCCF RFID Common Solution Project Issue: Performances Raised On : 08/02/08 Steering Committee Context Performances of the RFID system are analysed on a daily basis by all actors Raised by : DHL FR - MCCF Impacts Global Performances of RFID system is analysed, and corrective actions are set-up when needed Platform N. Truck Metro Loading Date Store SALON SALON SALON SALON SALON SALON SALON Tags read Unloading Date Load. Load. Rate Tags read Unload. Delta Load Unload. Rate Unload 1 21/07/2008 NARBONNE 21/07/ % % /07/2008 NARBONNE 23/07/ % % /07/2008 NARBONNE 22/07/ % % /07/2008 NARBONNE 23/07/ % % /07/2008 NARBONNE 24/07/ % % /07/2008 NARBONNE 25/07/ % % /07/2008 NARBONNE 28/07/ % % 1 Total 95.1 % 98.3 % Description Who Begin End Status Comments Development of the new version of analysis web page, following last analysis from the 3 rd July NBG ID 04/07/ /07/200 8 Done User guide : what to do, what not to do. DHL Quality service 06/06/200 8 Mid July In progress 34
36 Qualitative and quantitative benefits Perpetuate the partnership with METRO Facilitate the changes in the transport scheme through the tracking of pallets throughout the shipping / transport process (cross docking, shared loading ) Stay in touch with the technological advancements Be able to propose an operational example to the customers willing to commit themselves to RFID Reduction of the claims Possibility to spot missing pallets upon truck loading Productivity gain for the control of the unloading in the MCCF stores Productivity gain for the truck loading process in the DHL DCs
37 Learnings from DHL-METRO France Roll Out Challenges Collaboration between central Head offices and local l country organization Use of Standards (active vs. passive solutions for beverages) Discrepancies on Hardware selection Partly non sufficient experience of the RFID System Integrator Positive Effects Excellent collaboration between METRO and DHL Strong engagement of System Integrator Strong involvement and support of DHL staff during implementation
38 DHL s first Ad on RFID
39 Communication: RFID Projects in brief
40
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