Beat Your Competitors Through RFID-based VMI Consignment Stock and Loan Kit Applications

1. Prepared for: Beat Your Competitors Through RFID-based VMI Consignment Stock and Loan Kit Applications Trevor Peirce 30th MARCH 2011, RFID in Europe Conference, PRAGUE

2. AVANTA Global SPRLActivities & History • Belgian limited company first established in July 2007 • Providing contract consulting • Principle consultant Trevor Peirce, who started as an independent in July 2006 • EPCglobal Standards Director • RFID Standards Director DHL/Deutsche Post • Engineer, Leyland DAF • Naval Architect, British Shipbuilders • Contracts: • Medical device manufacturer • Express Distribution Company • RFID System Provider • Systems Integrator • Standards Organization/European Projects • European Community • Digital Pen Solution Provider • Winner of International award for application integration of RFID/GPS/GSM/Sensor avanta@scarlet.be

3. AVANTA Global SPRLIoT Activities and Experience International Collaboration • EU China IoT Expert Group – European Representative • CASAGRAS1 & CASAGRAS2 – ETSI IoT Expert – Standards& Security • GRIFS • EU Japan ICT Meeting Policy & Government • EC Recommendation - Contracted by the EC to improve public notification Research • IERC Activity Chain Leader – IoT security and privacy Standards Development • ETSI TISPAN – WG7 Rapporteur • European Standards Organization – EC Mandate M436 Expert Interoperability & Dissemination • EU China RFID Plugtest • EC Thematic Network - Board Member & WP Leader avanta@scarlet.be Slide 3 Draft version 0.2

4. Vendor Managed Inventory (VMI) & Consignment Stock Remotely held inventory at customer which the vendor manages. Vendor Managed Inventory (VMI) = Customer owns inventory managed by Vendor Consignment Stock = Vendor owns inventory until used Requires Vendor visibility upon: • Consumption • Replenishment/Inventory receipt • Exceptional forecast demand • Inventory status • Expiry date • Obsolesences • Condition • Central availability or position • Advantage for the Customer: • Reduction in administration • Inventory levels optimized to match current demand • Excess inventories avoided avanta@scarlet.be Slide 4 Draft version 0.2

5. Loan Kit Service Consumable and/or Reusable Inventory held and often configured by the vendor to meet the customers needs with non-consumed consumables and reusable inventory returned to the vendor Often involving: • High cost or specialist reusable tools • Specialist reusable tool configuration • Consumables: • High cost • Short shelf life • Supply restrictions • Advantage for the Customer: • Availability • Efficiency • Less space required • Reduced costs of inventory • Vendor Expertise avanta@scarlet.be Slide 5 Draft version 0.2

6. VMI & Consignment Stock Application Challenges Slow notification or oversight • Use • Replenishment Lack of regular monitoring of condition of inventory • Expiry • Natural and unidentified • Natural identified but not retrieved • Due to change in condition e.g. sterile packaging opened • Position – not where it should be • In the vicinity but not in the correct position • Temporarily removed from inventory (several seconds – several days) • Lost/Stolen • RFID Application Requirements: • High Speed Essential • In Manufacturing • At Customer • 100% Reliability • Multiple Tags • Orientation insensitive • Secure • Integration with ERP avanta@scarlet.be Draft version 0.2

7. Loan Kit Service Application Challenges Vendor Process Delays and Handling Costs • Identification • Outbound confirmation • Returns • Replenishment of Kits Customer Delays • Information about what has been consumed • Return of items • Mixed kits • Part complete kits • RFID Application Requirements: • High Speed Essential • At Vendor • 100% Reliability • Multiple Tags • Orientation insensitive • Secure • Integration with ERP avanta@scarlet.be Draft version 0.2

8. Loaner Kit Service Zimmer • Orthopaedic implants need to be picked for each operation with 100% accuracy. • Over 1 million individual implants shipped per year to operations. 3% of shipped items are consumed, the remaining items are returned. • Kit parts are returned muddled and require sorting into shipping units before they could be returned. • Slow dock to stock process meant that inventory was waiting to be bar code scanned back into stock. This bottleneck caused an increase in the total inventory holding and created a need for overtime to keep up with the large number of returning implants. • Orthopaedic emergency delivery requirements did not allow time for bar code scanning each implant. avanta@scarlet.be Slide 8 Draft version 0.2

9. Bar Code Verses RFID TagZimmer’s Perspective • Bar codes and RFID tags have different properties • If the goal is to replace bar codes with RFID tags, we are limiting the potential of RFID tags while ignoring the benefits of bar coding avanta@scarlet.be Slide 9 Draft version 0.2

10. Contact Details Trevor Peirce AVANTA Global T + 32 2 767 4511 Eavanta@scarlet.be