epc / rfid for senior managers training. chapter 1 introduction

EPC / RFID for Senior Managers Training

Chapter 1Introduction

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Introduction

Welcome to this EPC course.

We are happy to present you with the EPC / RFID for Senior Managers course where you will learn more about how EPC / RFID can benefit your company and improve your business processes

Enjoy the course!

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Pre-requisites

It is advised if you’re not familiar with EPC and/or RFID, that you first take the “Basics of EPC” course.

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Preface

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Preface

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Process, arrow indicates material flow directionProcess, no material flow Information flow

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Chapter 2Before you start

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Before you start you should:

Before you start, you should have a basic knowledge about EPC, RFID and which overall benefits you should expect from this combination.

While this chapter will give you a brief overview about the EPC and the RFID technology, you should refer to the other training courses of this series that are “basics of EPC”, “Advanced technical aspects of EPC / RFID” and “advanced business aspects of EPC / RFID” for more information.

This chapter also briefly describes the SCOR model that we will use to show which of your business processes are impacted by EPC / RFID

Additional information about the SCOR model can be found from the Supply Chain Council at www.supply-chain.org

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The EPC Concepts

The Basic Needs of the Supply Chain

Exchange

Capture

Identify

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The EPC Concepts

Solution to identification

EPC = Electronic Product Code.

The EPC identifies each single item.

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What is the Electronic Product Code?

© Jean-Pierre Attal

Trade Item A31234567 89012 0000000123456

Trade Item A31234567 89012 0000000123459

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What is the Electronic Product Code?

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The EPC Concepts

Solution to DATA CAPTURE

The EPC, is captured using RFID

RADIO FREQUENCY IDENTIFICATION

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Capturing the data from the tag

Readermodule

Antenna TagHost

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EPCIS Capture Interface

Object Event15 Jun 16:10EPC XStore #23 BackReceiveSellable

ALETAG READER EPCIS CAPTURE

BAR CODE

HUMAN INPUT

EPCIS CREATEEVENTS

EPCIS REPOSITORY

INTERNAL/EXTERNAL APPLICATION

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The EPC Concepts

Solution to Data Exchange

EPC is a System that allows the trading partners to capture and share information

about the items in an automated way.

EPCglobal Network provides real-time information about each item.

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What are the EPC / RFID benefits?

As we will see during this course, there are many benefits that EPC, RFID and the EPCglobal network will bring to your business.

Without entering too much into detail, please note at this stage that EPC / RFID enables:

• End-to-end visibility along the supply chain • Effective capture of data without human intervention and

without line of sight• Better data accuracy and integrity• Tracking and tracing at granular level

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What is the SCOR model?

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Customer Customer’sCustomer

Suppliers’Supplier

Make DeliverSource Make DeliverMakeSourceDeliver SourceDeliver

Internal or External Internal or External

Your Company

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What is the SCOR model?

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Understanding my current processes

Grab oil management process at Nestle UK

Courtesy of Nestle UK

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Roasting Area

Freezer

Roasting

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Other factories

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Summary

This topic presented the three major concepts of identification, data capture and data exchange and how EPCglobal Inc has provided solutions to these key questions:

- the Electronic Product Code (EPC) to identify items- RFID to capture information- the EPCglobal Network to exchange data

This topic also introduced to the SCOR model that we will use in the following chapters to highlight the benefits you can achieve by using EPC / RFID

This topic presented the three major concepts of identification, data capture and data exchange and how EPCglobal Inc has provided solutions to these key questions:

- the Electronic Product Code (EPC) to identify items- RFID to capture information- the EPCglobal Network to exchange data

This topic also introduced to the SCOR model that we will use in the following chapters to highlight the benefits you can achieve by using EPC / RFID

Chapter 3EPC / RFID and the PLAN processes

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The PLAN Processes

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PLAN Supply Chain

The concept of manufacturing a product in one country for sale in another country is not new.

But when China joined the World Trade Organisation in December 2001 it gave a whole new meaning to this concept.

Many believe that the attraction for moving manufacturing to China was the extremely low labour rates compared to the rest of the world.

But this is only half the story.

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PLAN Supply Chain

Indeed, labour costs are only part of the picture as what really matters in the supply chain is the total cost of the finished product as it reaches the consumer.

So you can see that these costs include not only the cost of making the product but also include the costs for transporting it, storing it, importing it and giving it to the point of sale, including any applicable duties or taxes.

This is often referred to as the actual cost or the landed cost.

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PLAN Supply Chain

China didn't attract half the world's manufacturing simply because wages are very low compared to other regions.

It attracted that manufacturing because the landed cost, was on aggregate cheaper than manufacturing elsewhere.

But this scenario introduced more factors into the equation, or to be more precise it didn't introduce them, it just made them far, far more important than they had been before.

Those factors were time and risk.

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PLAN Supply Chain

Let's imagine a scenario that more closely represents supply chains of 25 to 30 years ago.

An upmarket department store in Munich is selling seasonal fashion clothes, and those clothes were made in Milan.

Assume that the journey time by truck from Milan to Munich is in the order of 24 to 48 hours.

If demand substantially exceed forecast then the time to recover would probably be quite short and would mostly consist of the time taken to make the products if they are not in stock and the time to carry them by truck them from Milan to Munich.

So the chances of replenishing before season end and the subsequent lowering of demand are quite good.

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PLAN Supply Chain

Now let's run that scenario again, but this time those clothes were manufactured in the city of Nansha on the Pearl River Delta in China.

The margin on these products is not so large as to sustain the cost of air freight so they have to be transported by ship.

The nearest major port is Hong Kong where they will be consolidated and loaded into containers for shipment to a major German port.

Once at destination port they must be imported, customs cleared, handed over to the trucking company and taken down to Munich.

Time to replenishment? Probably not less than four weeks, and if the season has only three weeks left to run?

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PLAN Supply Chain

You can see from these scenarios that when the manufacturing was moved to China the supply chain was considerably extended both geographically but also in terms of elapsed time.

But it was also made more complex as many more stages and modes of transportation were introduced as well.

All of this combines to greatly increase the risk that some part of the process is going to go wrong, in general, the more processes there are in a chain the higher the risk of failure.

So what can be done to mitigate this risk and minimise any adverse impact?

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PLAN Supply Chain

The key to doing this lies in having the ability to see exactly what is happening at every stage along the way.

And that visibility has to be frequent, timely and accurate.

But what exactly do we mean by visibility?

In its simplest form it consists of just three elements:• knowing what something is• knowing where it was• knowing when it was there

Existing methods that rely principally on the scanning barcodes collect visibility data at just a few key steps in the overall process.

RFID technology enables the automatic capture of this data much more frequently, more accurately and in real-time.

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PLAN Supply Chain

The use of standards, such as those offered by GS1, to identify items, locations, commercial relationships, assets etc. means that this data can be easily exchange between trading partners and service providers, such as transportation companies, in a standard manner.

This standardisation acts as a key incentive for trading partners to participate in this exchange because, having developed a system to do this once, it can be used for any other trading partners using the same standards.

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PLAN Supply Chain

Within EPCglobal network, the cross-company exchange of data regarding the physical flow of the products and assets is done using EPCIS.

EPCIS will not be covered in this course as its benefits and technical aspects are already in the “Advanced technical aspects of EPC / RFID” and “Advanced business aspects of EPC / RFID” courses.

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PLAN Supply Chain

So EPC / RFID provide you with a mean to know what is happening in your supply chain in a manner that is much more granular, accurate and timely and to exchange this information with your trading partners.

But the benefits of doing this can extend far beyond simply knowing when something has just gone wrong.

It's possible to use such an environment to accurately predict that something is going to go wrong.

And it is this which enables a much more proactive approach to the management of supply chain issues.

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PLAN Supply Chain

Let us illustrate this with a scenario where products are being trucked from the factory to a consolidation warehouse for loading into containers in time for the sailing of the particular vessel.

With existing methods it is quite likely that we would not know if the truck would make the vessel sailing until the truck arrived at the port.

But using RFID infrastructure, coupled with standard means of identifying the truck and its contents, it's possible to track the progress of the truck along its route from the factory to the port.

Any delays en route can be automatically detected and alarms set to trigger in the system, with alerts sent to those managing the customer relationship.

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PLAN Supply Chain

Customers don't like bad news but in general they can manage if they know what is going on.

But customers absolutely detest late bad news, because in effect you have robbed them of the opportunity to contribute to improving the situation.

In the above scenario knowing in advance that the truck would miss the vessel sailing enables you to proactively warn your customer on the situation and to then offered to work with them on alternative courses of action.

Your customer then gets the perception that you know what is going on, that you are proactively managing situation and that you really are concerned about the impact on them.

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PLAN - Manage Performance ofSupply Chain

We will clearly highlight in the next chapter how EPC / RFID can provide you with accurate and timely data to help you monitoring your different processes such as your receiving or production processes.

We will also highlight in the following chapters how EPC / RFID will allow to improve the performance of these processes that is for example you will better use your assets and equipment or need less inventory or production space.

Improving the performance of your processes can have a beneficial impact far greater than the cost directly associated to the process.

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Imagine a manufacturing plant that is nearing its throughput capacity.

Under these circumstances it would be prudent to undertake securing the next plant or other manufacturing facilities.

But securing additional manufacturing facilities is a serious, time-consuming and expensive proposition.

Suppose that the new factory doubles your overall capacity.

But the day you proudly complete the opening ceremony it's very unlikely that your sales volumes would have doubled as well.

This means that the overheads in terms of capital invested and other general expenses for two factories must be spread over the same or slightly larger volume of units produced.

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You can see from this example that delaying the point at which you must introduce new capacity is a beneficial move.

Yet the only way that this can effectively be done is to increase the throughput using the existing capacity and EPC / RFID can have just about the impact.

That ability to take less time to complete the production has the effect of increasing supply chain velocity, which in turn delays that point in time at which you need to consider additional capacity.

This is a non-recurring benefit as at one point you will probably need another facility but it is a sizeable benefit which could prolong current levels of profitability, so it is well worth going after.

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PLAN - Manage Plan RegulatoryRequirements and Compliance

Government regulation can be an important driver for the implementation of systems that would benefits from EPC / RFID.

As an example, let us mention the European Union regulation that became effective in January 2005 and that demands traceability of food along the entire supply chain in order to ensure consumer safety.

Consequently, companies in the food business, whether they are producers, processors or distributors, have to record from whom they receive food products and to which businesses they supply food products.

Companies don’t have to trace their products through the entire supply chain as they are only responsible for their own operations and for the interface with their trading partners.

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Many companies started implementing barcode supported traceability systems well before the EU regulation for internal quality control and customer service purposes.

What is new is that the increased visibility along the supply chain, provided by EPC / RFID can really improve your existing traceability system.

First, EPC / RFID will reduce the data capturing effort and lower the risk of human errors such as mixing cases.

What will generally happen if one of your food product container is not properly scanned?

Well there is a good chance you won’t be able to trace this lot anymore thereby violating food safety and traceability regulations.

Therefore you will probably have no other choice than to destroy these non-traceable products

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Improved traceability systems can also help you target your recalls.

Companies generally remove more products than required when there is a recall.

Obviously, if there is a health issue, you will recall all the products as you probably don’t want your customer to think you haven’t removed potentially dangerous products.

But what would you do if you need to recall products because there is a printing error for some batches?

EPC / RFID at the case level would allow to better and faster identify which cases are part of the batches to be recalled.

Similar applications such as those impacted by food safety, patient safety, hazardous material handling, would also benefit from the increased visibility EPC / RFID provides

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PLAN - Summary

In this chapter, we have learned that extended supply chains demand much more attention to having good visibility all along the chain

EPC / RFID provides visibility along the supply chain that is what is where and when thereby allowing a better management and performance of the supply chain from inventory control to facility management.

EPC / RFID also allows the sharing of the data with trading partners through EPCIS.

Finally, you have understood that EPC / RFID could improve your traceability system by reducing the number of products you would have to recall.

Chapter 4EPC / RFID and the SOURCE processes

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The SOURCE processes

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SOURCE – Schedule Product Deliveries

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SOURCE – Receive Product

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SOURCE – Receive Product

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SOURCE – Verify Product

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SOURCE – Transfer Product

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SOURCE – Transfer Product

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SOURCE – Assess Supplier Performance

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SOURCE – Assess Supplier Performance

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SOURCE – Manage Product Inventory

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SOURCE – Manage Capital Assets

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SOURCE – Summary

In this chapter, you have learned that EPC / RFID will speed up processes of receiving and verifying the products.

EPC / RFID will reduce out-of-stocks by reducing theft and obsolescence and by detecting inaccurate deliveries right at the gate.

By providing real time information on what was where and when, EPC / RFID will also allow you make sure your inventory is adequate that is also you don’t have excess inventory.

This better control over your inventory will allow you to further reduce your inventory costs as you will also be able to reduce your safety margins, minimum stocks, size of warehouse and the needed equipment to operate it.

Chapter 5EPC / RFID and the MAKE processes

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The MAKE processes

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MAKE – Schedule Production Activities

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MAKE – Schedule Production Activities

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MAKE – Issue Material

We have already covered in the previous chapter the benefits to be gained by EPC / RFID when you wish to issue material, including packaging material, but the picking location is empty.

EPC / RFID will also save you time in the picking process as you won’t have to scan the picking location or to input the number of cases of cases you picked as this can be automatically detected.

For increased visibility, you can also install an RFID portal that would detect automatically the material that has left the warehouse and entered the production zone.

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MAKE – Produce and Test

In some supply chain operations, particularly those which produce complex finished goods, various components are brought together in specific configurations to form the final product.

Automobiles, household white goods, computers, furniture and office equipment are all examples of these.

What is particularly important in these operations is that the right components are brought together in order to make the final product.

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For many products the components are designed in such a way that the wrong components will not fit together properly and thus provides a very visible signal that something is wrong.

However, there are other operations were components such as computer disks, may be identical in physical form and may vary only in some other manner such as capacity, speed or internal content.

Where this is the case it would be comparatively easy to complete the assembly of the product with the wrong components.

In most cases this would lead to financial loss, customer dissatisfaction or incorrect functionality.

But in some cases it could lead to the final product being a dangerous combination of the wrong components, such as an electrical fitting that would be incompatible with the electricity supply in the target market.

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So you can see from this that building the product with the wrong components can have serious consequences.

Up until now barcodes have been the most effective barrier to this type of error.

But this technique requires that the unit identity, the workstation at which it is sitting and the identity of key components are all scanned in order to collect the identification data.

This is an effective technique, but it is not always an efficient one as it can take quite some time relative to the overall process to complete.

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Now imagine that a combination of RFID and standard means of identification of items and location are being used.

Now the main unit will be identified simply because it arrived on station.

Bring a component near to that unit that is not on the bill of materials that build and the system will automatically identify what that component is, pick up a serial number and then determine if it really should be being used for this unit.

If it shouldn't be then the operator can be warned and the system would refuse to close the builds of that unit until the error was corrected.

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Therefore, any work being done at that workstation is devoted entirely to progressing the build rather than identify what is being built.

This has the double benefit of greatly improving accuracy while reducing time to build.

These in turn have knock-on effects on industry levels, customer satisfaction, time to market and supply chain velocity.

Finally, note that no one has had to scan anything thereby reducing human errors that are often reported to be the biggest source of material and time waste

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MAKE – Waste disposal

You have made your finished products, packed them and they are now available to the DELIVER process

It is now time to collect and manage waste produced during manufacturing including scrap material and non-conforming products.

While today, EPC / RFID brings limited benefits for waste disposal at company level, it is expected that companies will be more and more requested to tag their waste for recycling and disposal in the future.

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MAKE – Waste disposal

As an example, under the latest WEEE directive manufacturers of PCs, and other electrical goods such as cookers, fridges and other white goods, are now liable for the cost of their disposal.

In Japan, medical waste materials are being tracked as they are moved for disposal, the primary goal for the RFID system being to prevent illegal waste disposal.

With tags fitted into these products, the task of disposal is much simplified.

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MAKE – Manage Production Performance

To measure your production performance, you will look periodically at your Key Performance Indicators or KPI’s such as number of products manufactured, failure rates, processing times, comparison between like operations, consistency of inbound material delivery, etc.

By looking at these KPI’s over time, you will be able to identify "trends" that would both tell you what has happened in summary and provide you with a reasonable indication, though not a perfect one, of what is likely to happen in the future.

It is these KPI’s and trends that are used to monitor performance, set production targets, give commitments to customers, decide on inventory levels, set replenishment points, scheduled time for the use of lines and equipment, and so on.

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MAKE – Manage Production Performance

But the key thing about trends is that they are made up of the underlying data of individual events, which means that they can only be as accurate as that underlying data.

RFID technology, identification standard data & the means to easily exchange that data in a standard way can vastly improve the quality and availability of this underlying ‘operational management’ data.

And that means getting a much better view of what is happening, trends, choke points, early warning of degradation and all sorts of key information that enables you to improve operations.

Basically, putting much better data into the management reporting system is likely to result in much better decisions being made!

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MAKE – Manage Make Equipmentand Facilities

There are numerous applications where reusable containers such as totes, bulks, crates, used in production are tagged so that they can be better tracked and traced within the company.

Having a better visibility on these containers minimises time for their search thereby reducing the total lead time.

Attaching active tags coupled with sensors would allow you to record parameters such as the temperature while these containers are going through these harsh processes.

This would mean that by knowing where your assets are and in which condition they are, you would reduce or eliminate manual checks for maintenance

Another advantage for these assets that will transit through harsh environment such as stoves or freezers is that rugged tags generally resist better than barcodes.

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MAKE - Summary

In this chapter, you have learned that efficient production is heavily dependent on the availability of raw material, containers, packaging material and equipment .

By providing better visibility in finding and picking this material, EPC / RFID reduces the production lead time and the labour costs.

We have also learned that EPC / RFID can speed up the time to build by limiting human errors and ensuring your final product such as a computer are made of the correct components as indicated on the bill of materials.

You finally understood that EPC / RFID provides you with more accurate production data so that you can better assess the performance of your production and make better business decisions.

Chapter 6EPC / RFID and the DELIVER processes

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The DELIVER processes

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DELIVER – Reserve Inventory

Thanks to the increased visibility on your products whether they are in stock, work-in-progress, in transfer within your company, or on their way to your receiving dock, EPC / RFID will providing you accurate data on where your products are and in which quantity.

This will ease your process of reserving these products for specific orders and will allow you to schedule and commit for an earlier delivery date than if you had less visibility.

Customer rarely complain to be delivered sooner, do they?

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DELIVER – Receive Products from Source or Make

Finished goods coming either from the receiving zone or from the production zone will be received, verified, recorded and put away in a location such as in your finished goods warehouse.

While barcode is a perfectly fine technology to do all these tasks, we have seen in the previous chapters that EPC / RFID really speeds up these tasks as most data will be captured automatically by the RFID readers.

This limits human intervention that are prone to errors ensuring product data is recorded more accurately.

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DELIVER – Pick and Pack products

We have already covered the advantages that EPC / RFID provide in picking products in the section on issuing material for production.

Your picked products will next be combined, packed and wrapped and a label or tag will be placed on the pallet before delivering it to the shipping area for loading.

A stretch wrap station is usually the final step before shipping so an RFID system at this place guarantees the integrity of the containers.

A stretch wrap station is also extremely attractive for an RFID portal considering the orientation of the tags continuously changes while the pallet spins making their reading very efficient.

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DELIVER – Load Vehicle

To see how EPC / RFID can help with this process, let us imagine a scenario where a pallet is barcode scanned before loading on to the truck.

The scan told you that the pallet was at a certain position at a certain point in time.

It told you that the pallet was staged for shipping, it can't tell you that the pallet was definitely loaded on to that truck.

The pallet could still be loaded on to the wrong truck yet the "system" considers that it was put on the right one!

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DELIVER – Load Vehicle

With RFID it's possible to minimise the chances of this type of error occurring.

In this example positioning RFID antennae at the entrance to the truck would indicate whether or not the goods had indeed been loaded.

Some trucking companies are fitting out their trucks with readers for this very purpose – and of course the reader can detect if the goods are being removed from the truck too!

And readers are getting smarter too, with some now adding the capability to determine direction of the tag as well as proximity.

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DELIVER – Ship Product

EPC / RFID can also provide with visibility on your products while they are “en route”.

Let's take the example of a truck load of valuable items and let's suppose that the truck embarks upon a journey that should take 14 hours, and that we'd like to know if that track deviates from its route timing at all.

It is possible to use a combination of RFID to identify the truck, GPS to establish its position on earth and some form of communications to transmit the information back to a control point.

RFID helps greatly here because it can enable you to see where things are much more accurately, more frequently and at a much lower level of granularity than you could before.

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DELIVER – Ship Product

It's important also to realise that most operations today already have some form of visibility of their processes.

Perhaps the form of this is that most people are familiar with is the courier companies such as FedEx, who have very sophisticated tracking systems which customers can access through a common website.

FedEx are only able to provide this information because it was captured during their processes to begin with.

So with RFID we aren’t really talking about providing something that wasn't there before.

But what we are talking about is a vastly improved method for capturing the data that is then fed into such systems and for exchanging this data with your trading partners using EPCIS

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DELIVER – Assess Delivery Performance

Knowing precisely exactly when the products departed and when they arrived will allow you to better monitor your delivery performance and improve your percentage of on-time deliveries.

A good example can be seen in airport where tagged luggage are automatically detected while passing choke points as to inform the passengers when they should expect their luggage and as to report real-time the percentage of delivery on-time.

EPC / RFID will also help you detect more accurately if shrinkage occurred during the shipment so that you can take corrective actions.

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DELIVER RETAIL - Receive Product at the Store

The process for store receiving is in theory the same as that for receiving goods into a warehouse.

But for most stores there is a significant difference between the two, which is that stores typically have much less dock doors and smaller receiving areas than warehouses do.

Whilst it is also true that stores have less goods to receive than the average warehouse, what it does receive can arrive in an unpredictable and uneven manner, thus putting pressure on those receiving to complete the task very quickly.

This is can be a particular problem during periods of high sales such as the period leading up to Christmas.

There are two common solutions to this problem, neither of which is particularly perfect!

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The first is to specify a precise time at which each delivery can be made.

This has the distinct advantage of evening out the flow of arrivals at the store receiving area.

It has a distinct disadvantage of loss of flexibility in the operation and the potential that goods desperately needed on the shelves are sitting in a truck in the yard at the back of the store waiting their turn to be received.

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The second method is even more unpalatable, as it involves taking shortcuts on the receiving process itself by not checking goods as they arrive but simply moving them to a location in the back store, or directly to the shelf it is the type of operation that does not have an actual back store.

As a mechanism for pulling goods through from the receiving area into the store very quickly this has much to recommend it.

But for the impact on your inventory, customer service, overall operational efficiency, use of storage and financials, it has nothing to recommend it!

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With EPC / RFID, the ability to automatically identify something as it comes through your dock door should really speed up receiving, just as it does in any warehouse.

If it is radio friendly material, then it's quite likely that you can automatically receive it right down to carton level. But even if the material being received is an impediment to radio identification, it should still be possible to receive it and say pallet level from reading the tag on the outside of the pallet.

The ability to automatically confirm where the goods have been put should also speed up the put away process.

Whilst the other benefits, such as inventory accuracy and being able to find things later on, are important, at the back of the store it is this ability to significantly increase throughput that is key.

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DELIVER RETAIL - Pick Product from Backroom

Picking products from the backroom is no different than issuing material from a raw products warehouse or picking finished products for delivery.

The problem will discuss now is what happens if your shelf is empty or as expressed in the retail world, you are out-of-stock.

When those goods are not on the shelf they are not going to be sold, as simple as that.

And this has knock-on effects, such as customer dissatisfaction and loss of revenue.

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Customers will not always go and shop with a competitor just because something they want is not on the shelf, it depends greatly on brand loyalty, time available, distance to competitor and a whole host of other factors which are very well understood by retail professionals.

But if the customer encounters this situation often enough, they will move to a competitor.

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There are three basic issues which cause out of stock that are:

1. the item is not actually physically on-site, either in the shop or the back store

2. the item is in the back store but cannot be found

3. the item is in the store that cannot be found

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Let's take the first situation where the item that is not on the shelf is not physically on sites either, be that on the shop floor or in the back store.

Here the most important thing to know is that the item is not actually available at all and that therefore going to look for it would be a complete waste of time, effort and money.

But as we have already seen, the logical inventory as perceived by the system does not always match what is physically in place.

EPC / RFID, by Improving inventory visibility, goes a long way to removing this issue and restoring faith that the logical inventory picture does match the physical.

Its potential to avoid unnecessary work should not be underestimated.

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Next, let's look at the situation where the goods are on site but they are lost somewhere in the back store, in other words, when the associate went to the location as indicated by the system the product could not be found at that location.

The two most common causes of this issue are incorrect put away and the products being moved after a correct put away without the system being notified.

Again, EPC / RFID can be used to ensure an accurate put away or to detect when items had been moved to another location.

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Lastly, let's look at the situation where the item is on-site and we know that it was moved to the shop floor at some point. How we know this will be explained in the next topic on shelf stocking.

Success in detecting where the item is now really depends upon the type of infrastructure that you have set up on the shop floor.

If it's in an area where you are tracking at item level on the shelf and it's quite likely that the system will tell you where it is.

If it's not, then you will not necessarily know where it is but at least you will know that it was moved to the shop floor.

And of course, it is still palletised you should be able to find it fairly quickly as it's difficult to miss a complete pallet!

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DELIVER RETAIL - Stock Shelf

Exactly when to replenish a shelf and to what level to replenish it is dependent upon many different parameters.

In essence there are three basic parameters that drive this process that are:

• the current level of stock on the shelf• the desired level of stock on the shelf• the probable level of demand in the foreseeable future

The current stock level can be determined by deducting sales of that product from the stock level at a previous point in time and then adding any stock that has been moved to the shelf since then.

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For this to work well you must have an accurate count of what has been moved out of the back store and onto the floor and shelf.

Using barcodes, this would be a very expensive and time-consuming process, as you would have to interrupt the flow of products leaving the back store to scan them before they enter the sale floor.

Indeed, this is such an expensive proposition that is simply not done.

But it can be done automatically using RFID and identification standards, giving an accurate picture of the flow from the back store to the sale floor.

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We should point out that unless RFID has been implemented as an item level on the shelf itself, then this technique does not guarantee that the item made it to the shelf, though it does guarantee that it left the back store and entered the shop selling area.

Where item level tagging is in operation on the shelf, the arrival of the goods onto the shelf would indeed be confirmed back to the system .

This has spin-off benefits as well, such as inventory accuracy and even process improvement based upon a time analysis of the replenishment process.

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DELIVER RETAIL - Fill Shopping Cart

There are many mushrooming RFID based applications that are all aiming at better serving the customer and providing him with additional information.

More and more retailers are installing screens coupled with an antenna station in their stores where the customers can check if the products are somewhere in the shop.

The stations also generally provide additional information on the product such as how the country of origin, how the product is made, the allergens it may content or whether this product is available in other sizes or colours.

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While all this can be achieved with let’s say barcode technology, RFID has the advantage to insulate the consumer from the technology .

Basically, the customer only need to know enough to take the product to a place where it is indicated they can get more information.

They don't need to scan anything and indeed they don't even need to be aware that anything is being scanned to begin with

So the real difference between both technologies is the ease and convenience with which the identification of the product can be made.

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In the apparel industry, similar applications such as the magic mirror available in the changing room are also bringing benefits to the customers.

Magic mirror will inform you on the different sizes and colours available for the clothes you brought in the changing room, let you know which other pieces of clothing would fit well with the one you choose and also inform you about any promotion on these items.

EPC / RFID in the changing room can also be used to automatically record which items go in and out of the changing room for theft prevention.

While you will frequently find today a store attendant counting manually the number of items entering the changing room, all this could be done automatically with EPC / RFID

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DELIVER RETAIL - Checkout

The original reason for inventing barcodes was for speeding up check out at supermarkets.

Today sophisticated 3D scanners have speeded up that process to the point where it takes just a quick swipe of each item across the scanning area to capture the identity of most items.

The weakness of the process is that it is still basically sequential, so now matter how fast you are, you can only scan one item at a time.

Imagine now bringing 15 items of apparel to check out, placing them on the checkout counter and then receiving the receipt or credit card voucher for them 2 seconds later.

Sounds implausible? Well, it is being done today all over the world.

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DELIVER RETAIL - Checkout

This technique is particularly effective with the items being sold are made of material that is radio friendly.

Apparel and footwear fall into this category, and there are many very successful implementations in this industry sector. But recent advances in technology mean that books, DVDs and pharmaceuticals; all previously considered too difficult to use in this scenario, have all been successfully implemented.

Don't expect RFID to completely replace barcodes at retail checkout for some years however as this process can’t yet be carried out for all types of items within a retail store.

Metals and water still impact some forms of RFID such as UHF and other forms such as HF have a limited range.

However, every month new developments are announced that move the technology nearer towards overcoming these limitations.

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DELIVER - Summary

In this chapter, you have learned that the increased visibility provided by EPC / RFID on your products and assets will speed up most of your delivery tasks and reduce your labour costs while providing you a better accuracy as to which products are where and when.

You have understood that EPC / RFID can also save you a lot of time in the store by locating more precisely whether the products are on the back floor or on the sale floor reducing thereby out-of-stocks for your customers.

Finally, you have been shown some example of EPC / RFID applications implemented at the store level for the benefit of your customers.

Chapter 7EPC / RFID and the RETRUN processes

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The RETURN Processes

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Authorize defective product return

Let us imagine a scenario where a customer returns to your shop and claims that the digital camera he just bought last week doesn’t work anymore.

He wants the camera to be fixed or replaced, what will you do?

Most probably you will first want to confirm that the customer is actually entitled to warranty services for the camera that is checking the "warranty entitlement".

Warranties come with differing levels of repair, differing levels of service to repair and differing periods within which warranty may be claimed.

So it's important that the precise terms and conditions of the warranty are understood and can be confirmed before any work is undertaken.

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The traditional method of achieving this was for the customer to be given a warranty certificate of some form at the time of purchase and have to produce it at the time of claiming warranty service.

In some industries this may also be supplemented by the ability to look up the warranty details by reference from the unit serial number.

This latter method works well when manufacturers provided their own warranty service as they had details to their own records.

But as this work has increasingly been contracted out to third parties, this is far less convenient.

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RFID can help to make this whole process both more effective and more efficient by carrying the warranty details on the product itself.

Clearly these details need to be protected in some way against unauthorised changes, or everything that is sold will suddenly acquire a 20 year on-site full parts warranty!

But there are techniques available today to ensure the integrity of this data in the same way that such techniques protect the data held on disk in the manufacturer's records.

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There is another aspect of warranty that is perhaps far more interesting, and although not openly spoken about, far more of a problem, at least for those providing warranty service.

Imagine a scenario where a customer company owns two identical PCs and that the disk drive in one of them fails.

That machine is not under warranty but the other one is.

It's a simple matter to swap drives in the machines and then make a warranty call for the machine that now contains a different disk drive to the one that was sold with it.

The disk drive in that the machine is not under warranty but the warranty check will be done only at the PC serial number level.

The manufacturer has now provided warranty on a component that was no longer under warranty, and has borne the cost of doing so.

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There is already work underway looking at the technique of storing the full configuration of complex units like computers or television sets on its RFID tag at the time of manufacture.

This is commonly referred to as the "DNA tag" of the machine.

It is then a simple process for whoever is providing warranty to read the DNA of the machine and verify that all of the components that are being submitted under warranty are entitled to that service.

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Authorize Maintenance, Repair and Overhaul (MRO) product return

Warranty service would normally include some form of repair.

While repair processes should be dealt with in the chapter on the MAKE processes, it is discussed here for clarity.

The "DNA tag" can be very useful for the repair process as well, as it will be useful for the repair operator to know the original configuration of the unit for diagnosing the possible root causes of the problems being experienced.

This concept can also be extended to indicating versions of firmware or software in electronics products and even for variations of the same part number.

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Indeed, in some industries the same physical part has a different reference for warranty and repair services than that used for the original sale.

This is a technique invoked to ensure that parts that have already been used or serviced are not used in the manufacturing process for new product.

So sometimes, for the repair process, it is necessary to know not only the reference of the original part but also the reference of the replacement part.

This is another important piece of data which could be carried on the DNA tag.

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EPC / RFID and the concept of DNA tag are also very useful to keep the history of critical components such as aircraft parts.

Aircraft parts are refurbished regularly that is bringing the part back to the condition and tolerances that it enjoyed when it was new.

However, all refurbishment processes to some extent weakens the integrity of the original part so in many cases limits are set as to the number of times that refurbishment can be carried out.

Therefore someone has to keep track of what has happened to these aircraft parts and ensure that any refurbishment limits are not exceeded.

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Today this is all achieved with paper records adjacent to the part in combination with electronic records with the manufacturer or owner of the part.

While effective, this process is also a very cumbersome and time-consuming method of maintaining and tracking this information.

Although the central records will always be the formal records, imagine the efficiencies that could be obtained if the part history was effectively carried on the RFID tag on the part itself.

This is in effect, an extension of the DNA tag concept discussed before and is under active development by the aerospace industry.

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RETURN - Summary

In this chapter, you have learned that: the handling of returned product may not be complex enough to benefit significantly from RFID

The warranty details can be stored on the tag attached to the product as to speed up the verification of the warranty entitlements at the satisfaction of the customer.

The full configuration of the product can also be encoded in what is called a DNA tag.

DNA tags are useful for speeding up the repair of the product, verifying that the customer returns exactly what was sold and tracking critical components such as refurbished aircraft parts.

epc / rfid for senior managers training. chapter 1 introduction

Documents

epc conceptssolution

epc rfid benefits

epc xstore

epc rfidchapter

epc andor rfid

data capturethe epc

basics of epc course

epc rfidadditional information