RFID current applications and potential economic benefits

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1 OECD ICCP Foresight Forum on RFID Applications and Public Policy Considerations RFID current applications and potential economic benefits Naji Najjar Director, IBM South West Europe

2 IBM is involved in many aspects of RFID Many patents and years of research in RFID technology RFID used at Fishkill semiconductor & Dublin manufacturing plant, piloted in Montpellier plant and others.. Member of EPCglobal TM and facilitator of knowledge transfer process New WebSphere RFID middleware platform to support device and server solutions based on open & reliable architecture Sensor and Actuator Solutions emerging business unit in place - leading RFID initiatives for IBM Consulting partner for leading industry players 2

3 Sensors like RFID link the field or physical world -- with the enterprise/organization and its applications Sensors are devices that measure real world conditions like temperature, flow or position. Actuators are devices that take actions in the real world like valves, thermostats, or robots. Securely connecting the physical environment to the IT technology infrastructure to help organizations aggregate, analyze and act upon data and dynamically adjust operations in response to changes in their business 3

4 RFID enables on demand business/organization: A convergence point between new business /operating models & technologies RFID creates the ability to identify, aggregate and track information about objects through the value chain, from the manufacturer to the consumer RFID makes the supply chain visible, efficient, and collaborative. this provides businesses the ability to develop integrated end-to-end processes across their company and with key partners, suppliers & customers positioning them to respond with speed to customer demand, market opportunity or external threats 4

5 5 OECD Forum on RFID Applications and Public Policy Considerations RFID can be applied to five market spaces Supply Chain Management Work In Process Manufacturing (WIP) Asset Management Security & Access Control Consumer Applications Leverage RFID technologies to transform supply chains by providing end-to-end visibility of goods and enabling improved inventory management. Includes: Supply Chain Mgmt using RFID for Warehousing, pallet/goods tracking, Inventory Tracking, Track & Trace, Sensor/ sensing applications. Also covers RFID impact of counterfeiting and fraud. Apply RFID technologies to the in process manufacturing processes to enable effective inventory tracking and management, product line efficiencies, and JIT manufacturing advantages. Includes: Automation of assembly, Component production, Production of vehicles. Companies have physical assets (plants, truck fleets, PCs etc) that are needed to make, and to deliver products and services to customers - knowing where an item/ vehicle is on route, and also tracking of depreciating good tools, HW, equipment, leased items. Includes: Equipment tracking, Fleet management, Vehicle maintenance management, Track & Trace, Military and defense tracking. Monitor the movement and use of valuable equipment and personal resources. Includes: Access control and tracking, Animal tracking, Automobile ignition security, Baggage handling systems, Inventory control, Parking lot security and access, Shoplifting prevention, electronic article surveillance, Vehicle security, Sensor/ sensing applications. Monitoring peoples movements, personal security, convenience and Point of sale applications. Includes: Personal identification and authentication, personal security and safety, Patient ID and tracking, Maintaining shelf stock, Innovative payments, Return Wireless Broadband & Sensing management, Solutions Purchase maintenance..

6 Parcels Transportation in France: Sernam Challenge Innovation seen as critical to the success of Sernam. Need a solution allowing contact-less tracking of parcels & pallets at different points of the logistics chain Solution Sernam selects IBM as its RFID partner to develop, test, demonstrate & deploy an industrial RFID solution to support Sernam needs in the trace & track of its parcels along the full supply chain. Solution implemented successfully and currently used for Sernam night delivery operations Benefits Optimization in the transportation activities & assets Reduction in costs: loss of parcels, conflicts, labour Enhanced customer services 6

7 Fresh Produce Tracking in Australia: Moraitis Fresh Moraitis Fresh, a family owned company with the objective of providing customers with the very best in quality service, is now Australia's leading fresh produce company with a presence in all major growing districts & retail markets throughout Australia Benefits Improved ability to track volumes and types of produce, enabling better supply forecasting to retailers Increased throughput, resulting in improved volumes or decreased packing times Business Challenge To stay ahead of its competition, Moraitis needed to introduce operational efficiencies, reduce operational overhead and scale its business in a sustainable manner. IBM designed and implemented an application using RFID technology to track produce throughout the entire production process and enabling up to nine personnel to pack produce simultaneously. 7

8 Manufacturing Work-In Process in USA: IBM Fishkill Plant IBM has been using RFID technology in production since June 2002 as a part of the $2.5B fully automated 300 mm chip fabrication system in Fishkill. Silicium wafers moved automatically from one tool to the other are carried in RFID-tagged containers. RFID tag is read at each step of manufacturing process to track and validate work-in-progress. Full integration with back-office RFID tagged containers 8

9 Manufacturing Logistics : Philips Semiconductors Philips Semiconductors, headquartered in, The Netherlands, is one of the world's top semiconductor suppliers with the goal to be the leading provider of semiconductor-based solutions for connected consumer and communications applications. Business Challenge Philips with IBM, as its solutions partner, wanted to demonstrate how RFID can be swiftly integrated with legacy systems and operational practices to enhance productivity and efficiency. The Philips Asian RFID project covers the tagging and tracing of wafer cases and carton packages for flows of goods between its manufacturing facility in Kaoshiung, Taiwan and its Asia Pacific distribution center in Hong Kong. Benefits increased inventory turns, improved stacked lead time enhanced warehouse efficiency & delivery reliability improved customer service 9

10 Medical Waste Tracking in Japan: Kureha Kankyo Kureha Environmental Engineering Co, a leading waste management company in Japan, will begin verification tests on traceability of medical waste using RFID tags. Benefits Improved tracking of medical waste Prevention of illegal waste disposal Greater public safety and security Business Challenge Kureha wants to prevent illegal waste disposal by creating a traceability system for medical waste with a number of different hospitals and transportation companies in Japan. Containers will be equipped with RFID tags, and signal-reading antennas will be installed at IBM s RFID Solution Centre to investigate signal sensitivity and read-out precision parameters, enabling the evaluation of issues, such as optimum RFID tag mounting methods and an analysis of the influence of obstacles. 10

11 Security & Access Control : Finnair Challenge Solution Benefits Finnair was actively seeking a solution to help employees meet the challenge of increased passenger volumes on their day to day operations. Finnair is currently using phone based check in/out solution where employees need to call a certain number to check in/out from the duty. With this solution employees need to type in the personal identification number each time they arrive or leave from the work place. The existing solution has had some technical challenges which has frustrated employees. The Solution is based on an RFID tag which holds the employees personal identification number. The RFID reader is attached to an Intel based kiosk with a touch screen. The employees operate the system by touching the buttons on the screen which eliminates the need for typing in any information to check in/out. The RFID kiosk is communicating with an RFID server using WebServices. The RFID server is running at the top of WebSphere Application server providing the scalability and availability required by the solution. The RFID server is integrated with the existing RTC system where actual work optimization is performed. Fixed location based (RFID) check in/out operation Because the identification number is stored on the RFID tag employees can check in/out from the duty by just waving the tag near to the RFID reader without remembering and typing in the identification number. Fast and easy to use. Using the Kiosk the first Assignment can be delivered at the time the employee checks in The solution should also provide efficient information channel to employees checking in to the duty. This allows employees to get the latest information of the situation on the airport right away when they sign in. 11

12 Security & supply chain optimization: Joint IBM/Maersk initiative to develop a solution to provide real time visibility on containers and goods transported Law/rule compliance challenges (= Security & Liability) Implications to the stakeholders Business Business Model / Business Case Aligned Processes Standards Certificate Authority Logical Manufacturer Distributor Freight Forwarder Port Authority A Custom Ocean Carrier Port Authority B Custom Distribution Centre Data Aggregation Systems Communication Data Management Physical Supply Chain Performance Challenges (= Efficiency) Container Security Container Identification Data Capture 12 Actual solutions on the market are addressing some of these implications but none of them are covering the entire supply chain

13 Patient Flow Management in Emergency Unit ½ Joint Prototype IBM- Nice CHU Presented during the 34th Congress of the International Hospital Federation Nice September Patient path Optimization Traceability 13

14 RFID for Patient Flow Management in Emergency Unit 2/2 RFID Technology Linking 2 worlds: physical objects IT world antenna chip RFID Technology Location & Identification Patients IT equipment Goals Optimize patient path Traceability 14

15 RFID: Economic benefits & ROI opportunity Real reduction in errors via automation reduction in mis-shipments, lost inventory, and errors in redundant data reads Real gains in productivity by better managing the use of skilled resources through automation Industry recognized qualitative impacts which returns improved customer service, lessened warrantee handling, Visibility on supply chain vs estimates Driving regulatory impacts through compliance activities to meet governmental regulations: safety, security, environment,.. 15 Fraud detection Automation drives operational efficiencies that return economic benefits

16 Successful RFID initiatives require focus in three key areas: Business Process & Applications Communication & Connectivity Business Strategy RFID Enablement Integration Platform Technical Solution Design Pilot, Implementation, & Management Business Case Process Transformation Technology and Infrastructure 16

17 Intermec UAP-2100 OECD Forum on RFID Applications and Public Policy Considerations Key Messages IBM believes RFID is here to stay. It should be viewed as part of a broader strategy momentum is building around the globe Reader Antenna Tag RFID can enhance productivity, safety and enterprise/economy competitive positions...governments & public organizations have a role to play & stimulate To maximize benefits, RFID technology alone is not enough. processes would require changes Open Standards, open & reliable solutions are key how can we imagine, otherwise, linking the diversity of the physical world with enterprises/organizations & their IT systems? 17

18 Thank You 18

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