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Pervasive / Wireless e-business. IBM RFID Solutions IT Solutions for Business Value. Jean-Michel Corrieu IBM Europe, Pervasive/Wireless e-Business Technical Sales Manager. May 25th. What is Wireless Computing.
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Pervasive / Wireless e-business IBM RFID SolutionsIT Solutions for Business Value Jean-Michel Corrieu IBM Europe, Pervasive/Wireless e-Business Technical Sales Manager May 25th
What is Wireless Computing “A billion people will interact with a million e-businesses via a trillion intelligent interconnected devices” • Louis V Gerstner, Jr., 1999
What makes RFID relevant now? • After decades of technology refinement these radio tags have now become very small and inexpensive • A great deal of innovation has brought us to the point where the silicon core of an radio tag is now 0.4mm • The antenna can be printed onto a product’s packaging at time of manufacture • Currently radio tags can be purchased for less that €0.25 in quantity. => RFID is small enough, fast enough, and cheap enough to do real work with today.
11 Product Information (PML Format) ONS Server 12 Internet Internet Read Manager Antenna Transaction Data Store Write data to RF tags Items with RF Tags Application Systems Reader RF Trading Partner Systems Antenna EDI / XML 8 1 2 3 4 5 6 7 Tag/Item Relationship Database 10 9 RFID enables End to end IT Solutions (Auto ID drawing)
Progressing…… but still not perfect • Does not work well if the tagged object is made of RF opaque material like metals, several type of liquids, carbon • RF can penetrate only up to a limited depth of a material. So it may be impossible to read all the case tags of a pallet, even if the cases are made of RF-friendly materials • The number of tags that can be simultaneously read/written is limited to about 50 – 100 /second • The following environmental factors can hamper proper reading: • Speed with which the object is moving • Human bodies (composed largely of water) • Presence of RF interference, moisture and metals • Tag technology is not mature, intensive research is being conducted both at the theoretical (e.g., antenna design) and manufacturing (e.g., material used, processing techniques)
RFID: an ENABLER for Business Value • Measurable impact to labor costs • 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, • Driving regulatory impacts through compliance activities to meet governmental regulations • Automated POS means skilled resources are in front of your customers – and not behind a cash register
Aligning RFID to business strategy is dependant on the forces that are driving change - multiple factors influence how a particular company might view RFID TRANSFORMATION High • Transform operating/business models • Enable new sources of revenue • Enable collaboration with external clients/suppliers • Maintain item historical records (where it has been and what it has been through) • Track/Trace goods throughout the value chain both internally and externally OPTIMIZATION • Increase throughput • Reduce labor requirements • Enable Warehouse Management • Enable JIT manufacturing/logistics • Enable real time decision support • Provide internal track/trace of goods/people • Automate and speed processes (e.g. cross docking) COMPLIANCE Opportunities & Benefits • Meet minimum requirement (e.g. DoD, Walmart) • Replace or supplement existing barcode systems/applications • Increase accuracy and decrease error rates of existing applications (inventory management, etc.) Low Low High Complexity Source: IBM Business Consulting Services analysis
Developing an RFID strategy – Looking for BUSINESS VALUE Strategic Financial • How can RFID enable our overall strategic vision? • Should we be a leader or a “fast follower”? • Which trading partners should I pilot with and when? • How will we operate in a world of dual processes? And for how long? • What is the expected return on our RFID investment? • What specific RFID applications can drive value for us? • What is a realistic adoption pattern/rate of RFID and how will that impact my business case? Organizational Technological • What are the change management implications? • What are the risks involved in an RFID implementation? • What are our technology requirements for an RFID implementation? • What is the architecture that best delivers on my strategic technology plan? • How will an RFID implementation impact our current applications?
On Demand Operating Environment Business Transformation Business Value Innovativebusiness designs that sharpen focusand accelerate growth An IT operating environment optimized for flexibility and resilience Business Processes Business Transformation Integrated, end-to-end business processes that are built to change Based on real customer cases with real business processes
Aggregate Physical Environment On Demand Infrastructure Analyze Act Extending On Demand e-business systems Securely connecting the Physical Plant / Operational Environment to the IT / Business environment to allow customers to aggregate, analyze and act upon data to dynamically adjust operations in response to changes in their business environment Enable operational control systems to be integrated with Business Knowledge in IT Systems, using open standards-based, Next Generation Pervasive Technologies
RFID Across All Sectors RFID across industry sectors Industrial Healthcare Retail/CPG Government Field Service Logistics
IBM’s Divisions Supporting RFID Industry (S&D, BCS) IGS SWG Consulting Services RFID Trained Tech Group Systems Group Personal Systems Group RFID Focussed Software Group • Solution Development • Alliances • Sensors & Actuators • Software Development • Alliances • Standards Bodies WW RFID Focused Community • Strategy • Thought Leadership • Standards Bodies • Solution Development • Alliances Pervasive/ Wireless EBO • FOAK • Solution Development Research IBM has a matrix, non-hierarchical teaming approach to RFID
Strategy Services Business Case Strategy Assessment Pilot Definition SC Planning SC Execution Asset Mgmnt CRM Exchanges Business Process Business Process Security Shrink Mgmnt Track & Trace Counterfeiting Promotion Mgmnt Assortment MgMnt Price Optimization Targetted Marketing Partner Performance VMI/SMI CPFR/ SC Collabor Production Planning SC Event Mgmnt Warehouse Mgmnt Order Management Trans. Logistics WPS Portal Partner Collaboration Partners Websphere Business Integration For Collaboration Websphere Business Process Modeling / Workflow Websphere Business Integration Process Integration Architecture DB2 Db2 Integrator Order Mgmnt System Item Master File Internal Catalog / PIM/PML External Catalog /Data Pool/PML RFID Middleware Server External Data Acquisition Auto-ID Enablement Directory Management RFID Edge Server RFID Edge Server WBC Gateway Reader Reader Reader Reader Reader Reader Registry /ONS Auto-ID Tags IBM’s View – RFID will deliver value in the context of current mission critical business processes Communication & Connectivity
Yorktown Zurich Beijing Almaden ISL Hawthorne ISL Zurich Tokyo Haifa Delhi Austin IBM laboratories worldwide - 8 research centers focused on RFID advanced learnings, 3 testing labs IBM RFID Testing Labs Gaithersburg La Gaude
Customer Reference:Supply Chain: IBM Fishkill Plant • $2.5B Corporate 'from scratch' investment in 300mm Manufacturing and Development. Fishkill then made the decision to use RFID after assessing barcode and infra red systems. The plant needs to use thousands of different active containers for different functions that are transferred from storage area, process tools and manufacturing facilities - all of which are very valuable ($1K per container holding goods worth ~$2M). Their challenge was to create a real time, common container tracking system Challenge • Every container has an integrated passive RFID tag with a unique ID (common across all IBM sites) - know where its been, where its going and its history • IBM software is used to create and write the ID to all new containers • The contents of the container, wafer or recepticle, are associated with the ID in the Factory Control System's DB2 database • The transponder is read at every processing step to validate that the correct container and material are going to the correct process tool result Solution • Fabs moved from infrared systems to RFID allowing real-time vs. point to point tracking of wafer containers (on average 25 wafers in each container) providing true track/trace capability • RFID enabled increased efficiency, decreased error rates, and reduced labor requirements • RFID systems facilitated prioritization of orders, processing of specialty orders, and order routing during retooling or maintenance accelerating time to market • RFID has enabled IBM’s 300mm fab to run with 60 to 70 people compared with an industry average of 100 to 120, allowing IBM to add value to its products without necessarily adding cost • With automation enabled by RFID, IBM is able to run the plant with skeleton crew when normally they would shut it down (e.g. holidays) Benefits
Customer Reference: Supply Chain: Metro Group • The Metro Group Initiative has been up and running since April 28, 2003. The initiative helps Metro track and manage grocery store inventory from the distribution centre to and within the retail store environment Challenge • IBM have provided business consulting, middleware, implementation, hardware and support. • IBM in collaboration with Intel and SAP have been involved in technology selection and implementation. Solution • Metro has decreased misorders and lost inventory due to accurate visibility of inventory from the distribution centre to the retail store • Real-time tracking of retail store inventory helps Metro order new inventory on-demand, reducing “OOS” (out of stock) situations • POS checkout locations are monitored and staff added during peak hours to avoid customer bottlenecks • Customers have instant access to information about products from kiosks located through the store, improving customer satisfaction • Dr. Gerd Wolfram, Executive Project Manager, Metro Group Future Store of the Future says “The tremendous success of the Metro 'Future Store Initiative' is also driven by IBM's contribution to this innovative project. In particular IBM developed a RFID Middleware and integrated a complex RFID solution with multiple functions on pallet, case and shelf level." Benefits
Customer Reference:Supply Chain: Philips Semiconductors • The objective of the project was to help Philips increase inventory turns. The project provides near real-time inventory visibility to the Philips Semiconductors business units. It will also enable changes to policies in production and inventory planning systems which will, in turn, drive increased inventory turns • The project is initially between the Philips Semiconductors Kaohsiung (PSK) site and the Regional Distribution Center Hong Kong (RDC HK) on all packaged quantities and boxes, all customer direct ships (cartons) in AP from the PSK location, all cartons sent from the RDC HK to all destinations and for EXEL (3PL) all outbound flows in Hong Kong Challenge • IBM provided an end-to-end solution that encompasses: • Services to support Philips Semiconductors in the STAR proof of concept project approach will be delivered during the following project phases (total duration 30 weeks), in particular: • Vendor selection • Design and validation • Construction and testing • Targeted launch • Evaluation • Intellectual property services components; IBM proprietary radio frequency identification (RFID) framework and documentation • IBM software licences: • DB2 UDB Enterprise Edition (including one year maintenance) • 2 Websphere studio application developers for the proof of concept (including one year maintenance) Solution Benefits • This project will help PSC to further optimize its supply chain and is another step in the route to become an on demand company. The savings will be used to reinvest in competitive advantage and growth.
Customer Reference: Supply Chain: US Department of Defense • The U.S. Department of Defense is dedicated to becoming an early adopter of Radio Frequency Identification (RFID) technology. The DoD is currently preparing to read RFID tags at key sites within their supply chain. Beginning January 1, 2005, the Department of Defense has mandated that all suppliers place passive RFID tags at the case, pallet, and Defense Department Unique Identifier (UID) item packing level. Challenge Challenge IBM is working with the Department of Defense to: • Develop test pilot milestones and manage test pilot requirements • Create project metrics and reporting • Build a business case analysis of the overall RFID implementation • Monitor implementation issues and resolution • Assist in the development and release of RFID business rules • Establish commercial best practices • Provide Subject Matter Experts to develop the short term and long term implementation plan Solution Solution Benefits Benefits IBM seen as trusted brand for US DoD
Customer Reference: Supply Chain: Sara Lee • Major field trial in RFID USA • Step 1 pilot at one DC in compliance with Wal-Mart Mandate • Integrated to WMS • Step 2 roll-out in 2004 to more DCs (5 to 30) Challenge Challenge Solution Solution IBM chosen as RFID System Integrator and RFID Software Infrastructure and Applications Provider Solution uses Alien UHF tags and readers and Zebra and Printronix printers Different RFID Use Cases RFID Picking/Labelling RFID Goods Outbound Order verification at case level Load verification Benefits Benefits
In Short, How do we Help Companies : • Deliver Business Value • Focus on key industries • Develop end-to-end solutions • Provide Consulting, Integration and Professional Services • Leverage IBM and non IBM Components • Build a strong RFID ecosystem of Partners • Support and drive open standards
A mid-2002 IDC report shows IBM and PwCC Wireless jointly have close to a 30% market share, and when combined, are over 5 times the nearest competitors. “IBM Global Services (IGS) is by far the leading provider of mobile and wireless professional services. One could be shocked by seeing how far ahead IGS is” IBM: a leader in mobile and wireless computing The Yankee Group ranked IBM # 1 in March 2003 “IBM ranks first among the enablers of enterprise mobile computing solutions” “IBM also boasts the most successful professional services business (IBM Global Services) in the mobile computing space”
AMR Recent assessment of IBM • January 2004 release with Metro on Store of the Future and IBM's involvement • IBM--The overall systems integrator on the project, IBM is providing strategic direction, consulting, and implementation expertise. It will also establish an RFID lab in Germany to test supplier interoperability in all stages of the initiative. • The Takeaway: IBM is emerging as the leader in RFID integration and consulting services. • http://www.amrresearch.com/Content/view.asp?pmillid=16933