nextgeneration rfid

INSIDE…THE WAL-MART REPORT

The progress of the current and future RFID strategy at the mega-retailer

PROOF OF PROGRESSMETRO Group, Target, The DOD and a slew of mid-market firms keep the RFID torch ablaze

WHO DOES WHAT?Charted guides to RFID hardware, softwareand service providers

CGT RFID POLLSee how the industry voted with insight fromleading analysts

A S U P P L E M E N T T O C O N S U M E R G O O D S T E C H N O L O G Y

HARNESSING THE POWER OF THE EPC THROUGH PEOPLE,

NEXTGENERATION

RFID

1 6|CONSUMER GOODS TECHNOLOGY | AUGUST 2005 | www.consumergoods.com

NEXTGENERATIONRFID

RFID SERVICESThe below chart is a comparison guide of RFID services providers to help consumer goods executives further their search and understanding of industry offerings.

COMPANY NAME/WEB KEY HARDWARE KEY SOFTWARE KEY UNIQUE RFID

Accenture www.accenture.com

Symbol, Alien, Cisco, Sun,Intel, Texas Instruments,Avery Dennison, Intermec,

Microsoft (on Microsoft’sRFID Council), ManhattanAssociates, SAP,

Manufacturers, distributors,retailers in pharmaceutical,consumer electronics, retail,

Help clients determine howRFID can improve perfor-mance and develop

ADT Security Services Inc. www.adt.com ThingMagic OATSystems, Manhattan

Associates Tesco, Coleman, CephalonADT, a RFID physical layersolution provider, integratestags, readers, antennas and

Checkpoint Systems www.checkpointsystems.com

Philips, Zebra,Symbol/Matrics

Control Solutions Inc.,Shipcom

Working with CPG andPharmaceutical companiessupporting EPC and FDA

Checkpoint Systems pro-vides RFID testing servicesin its state-of-the-art EPC

Clarkston Consulting www.clarkstonconsulting.com

Clarkston remains hardwareagnostic to best serviceclients.

Clarkston remains softwareagnostic to best serviceclients.

Provided strategic andimplementation services tomultiple clients involved in

Clarkston Consulting pro-vides executive education,strategic assessment,

Deloitte www.deloitte.com

All primary and emerginghardware providers.

SAP, Oracle, Sun, variousmiddleware, and emergingapplications

Emerging RetailTechnologies BusinessCase and Roadmap,

Deloitte develops holisticclient solutions that arebacked by implementable

GENCO www.genco.com

Intermec, Symbol, Alien,Multi Spectral Solutions

GlobeRanger, ConnecTerra,Panatrack, Sun

Sears CRC, Sears DDC,Binney and Smith

Mobile solutions includingRFID-enabled fork lifts,clamp trucks, mast lifts, etc.

Fibergrations LLC www.fibergrations.com

SATO, Zebra, SAMSys,Bluestar, Psion Teklogix,Intermec

Catalyst International, AcsisInc, Financial Logistics Under NDA’s

Consulted and implementedRFID pilots and rollouts totop 100 Wal-Mart vendors,

IconNicholson www.iconnicholson.com

Symbol Technologies,ThingMagic, PSC N/A

Implementing RFID-enabledinventory tracking sys-tems...for major

Offers expertise for improv-ing Customer Experience,Asset and Inventory

IBM www.ibm.com/servicessolu-tions/us/

Symbol, Intermec, Intel,Philips

Various depending on appli-cation and industry.

Customers include MetroGroup AG, APC, Kayser-Roth, US Department of

Consulting, business casedevelopment, supply chainstarter software, IBM mid-

International Paper SmartPackaging www.ipsmart-packaging.com

AWID, SATO, Siemens,Printronix, Zebra, Tyco,Symbol, Tagsys, SAMSys,

IDVelocity, GlobeRanger,ConnecTerra

End-to-end secure supplychain solution. RFIDenabled lift truck solution,

RFID product testing withRFID hardware and soft-ware, compliance solution,

Northern Apex-RFID www.northernapex-rfid.com Symbol, TagSys, TI

Northern Apex-RFID devel-ops software solutions inmost instances based on

Many actual applications inuse. Most prominent isPurdue Oxycontin UHF pro-

Provides hardware and soft-ware services and productscentered on integration of

RF Commerce www.rfcommerce.com Siemens BEA Systems Albertson’s and Target

stores

RF Commerce is an intel-lectual property owner inhardware, federated EPR

TrenStar www.trenstar.com

Symbol, RFCode, EXE,Intermec, Identec Solutions,Philips Semiconductors,

Microsoft, HighJump, SAPTrenStar completed severallarge-scale RFID/assettracking implementations in

TrenStar provides a fullyintegrated RFID solutionthat combines RFID tech-

Trivalent Solutions Inc. www.trivalentsolutions.com

Texas Instruments, AlienTechnology, Axcess

Exact Software, BestSoftware, Ramco Systems

Mobile asset tracking for amajor healthcare provider.Personnel and equipment

RFID solutions focus onprocess integration and flex-ibility; minimizing client risks

UPS Supply ChainSolutions www.ups-scs.com

Multiple MultipleImplementation for RFIDshipment compliance in out-sourced fulfillment centers.

RFID enabled fulfillmentand shipping solutions formeeting retailer and DoD

With the ever-increasing plethora of technology providers that

offer RFID technology and solutions, it can be a somewhat

daunting task for consumer goods firms to decipher who does

what within the current RFID market. In an effort to guide

consumer goods companies in their search for the perfect

RFID partner, Consumer Goods Technology worked in concert

with technology providers to compile the fol lowing,

comprehensive charted guides to RFID services, RFID

software and RFID hardware providers. For more information

on any of the company’s listed, please visit vendor Web sites.

WHO DOES WHAT?


RFID SOFTWAREThe below chart is a comparison guide of RFID software providers to help consumer goods executives further their search and understanding of industry offerings.

VENDOR CAPABILITIES

COMPANY KEY HARDWARE KEY SERVICES KEY UNIQUE RFID OFFERING

Acsis Inc. www.Acsisinc.com

Alien, Symbol,ThingMagic, Intermec,

Accenture, CSC,Bearingpoint,

Homeland Security, Abbott, Fuji,DuPont, Coca-Cola Enterprises,

Acsis Inc. is an RFID software andsolutions provider with a specialty in

AquiTec Inc. www.AquiTecIntl.com

Stratum Global,Intermec

Epic GlobalTechnology

POC RFID applications in conjunction withwarehouse management for retailers

Catalyst International www.catalystinterna-

SAMSys, AlienTechnologies, Zebra,

Offers business casedevelopment, prod-

Sunbeam, Aviall, Uniden, SonyEntertainment Distribution, Spectrum

Offers turnkey RFID solutions for dif-ferent user environments, including

Columbitech www.columbitech.co

Symbol, HP,InfraSystems

No publiclyannounceable ser-

Do not have any publicly announce-able pilots.

Columbitech provides seamlesssecurity for virtually any RFID reader.

ConnecTerra Inc. www.connecterra.co

Alien, Symbol/Matrics,TI, Zebra, Printronix,

R4 Global Services,Avicon, HK

Successfully implemented RFIDsolutions for a number of CPG com-

RFTagAware RFID infrastructuresoftware targets the specific chal-

GlobeRangerCorporation

Alien, Psion Teklogix,Symbol, Printronix,

Ciber, Unisys,International Paper,

Implementations through OEM/VARpartners in more than 30 deploy-

iMotion platform simplifies the devel-opment, deployment and

i2 Technologies www.i2.com

Hardware Neutral: Canwork with any, includ-

Accenture, IBM,Teradata, TCS, EDS,

Pilots underway are confidential innature.

Product Information Management,Visibility and Event Management,

Loftware Inc. www.loftware.com

Printronix, Zebra,Monarch, Sato, Avery,

MarcGlobal,HighJump, SSA

International Paper, Microsoft, Oracle(US & Europe), Xterprise, University

RFID Starter Package: an entry-levelproduct; RFID Premier Package: an

Logility www.logility.com

Symbol, Zebra,Loftware

N/A Several pilots are underway withlarge consumer goods manufactur-

Logility Voyager Solutions have built-in support for RFID at the carton,

Manhattan AssociatesInc. www.manh.com

Alien, ADT/Tyco,Symbol/Matrics,

Provides implemen-tation/support

Manhattan selected for RFID bymore than 50 companies and com-

Integrated Logistics Solutionsincludes RFID in a Box, offering

Manugistics GroupInc.

Hewlett Packard, IBM,Microsoft

Accenture, ATKearney, Capgemini

N/A RFID-enabled solutions use real-timedata, improves operations, increases

MARC Global www.marcglobal.com

Leading HF and UHFRFID reader and tag

IBM Consumer goods suppliers to Wal-Mart, Target, DOD, Albertsons and

MARC Global’s RFID solution is apowerful, standards-based offering

OATSystems Inc. www.oatsystems.com

Tyco/ADT, Symbol,Alien

Intel, Capgemini, HP Phase I solutions for CPG firms, sup-ply chain visibility/track-and-trace

OAT Foundation Suite is RFID datamanagement platform of choice for

Oracle Corporation www.oracle.com

Alien, Intermec,Printronix, Zebra, Intel

Oracle, ATS, TataConsulting Services,

Contact Oracle Captures, manages, analyzes,accesses and responds to sensor

Provia Software www.provia.com

Psion Teklogix, LXE,Intermec, Printronix,

Sun Gillette and others Incorporates RFID throughout supplychain to address compliance man-

Radio Beacon Inc. www.radiobeacon.co

System Concepts Inc.,Intermec

System ConceptsInc.

Implemented full RFID solution in theSocial Security Administration’s

Ability to implement complete EPCcompliance integrated to advanced

RedPrairieCorporation

LXE, Symbol,Intermec, RF Code,

Xtraprise, R4, Peak N/A RedPrairie offers a three-tiered, pre-packaged solution to accommodate

Robocom SystemsInternational

Symbol, Zebra Services are per-formed by Robocom

Robocom has demonstrated workingsolutions to user group and press.

RIMS, Robocom’s WMS, compliantwith EPC requirements, supports use

SAP AG www.sap.com

Hardware agnostic,open platform works

All large servicesfirms and some

RFID solution powered by SAPNetweaver that can communicate

RFID solution turns raw RFID datainto business context and automates

SSA Global www.ssaglobal.com

IBM, HP, Sun Disus, InformationTechnologies Int’l,

SSA RFID, SSA RFID forDistribution, SSA ERP LX, SSA FM,

SSA RFID prepares CPG firms fornew mandates from channel mas-

Stratum Global www.stratumglobal.co

Intermec, AWID,Zebra, Kathrein

N/A RFID-enabled lift trucks, RFID-enabling pallet wrapping station,

RFID-enabled solutions for Closed-Loop, Compliance and

Sun MicrosystemsInc.

Various Various Various A complete system that addressesneeds for driving new businesses

Swisslog www.swisslog.com

Matrics, Alien, Zebra,Printronix

Swisslog implementsprojects using it’s

Experience implementing RFID inboth distribution and manufacturing

RFID solutions for CG firms for man-ual and automated material handling

Sybase Inc. www.sybase.com/rfid

Intermec, AWID,Printronix,

Capgemini,LogicaCMG, Venture

ProPath Laboratories, Cesar Castillo(3PL and Pharmaceutical whole-

RFID Middleware/Edgeware (RFIDAnywhere), RFID data

T3Ci www.t3ci.com

N/A HP P&G, Unilever, Gillette, HP T3Ci develops software and sub-scription services for leaders of RFID

NEXTGENERATIONRFID

CONSUMER GOODS TECHNOLOGY | AUGUST 2005 | www.consumergoods.com|1 9

RFID HARDWAREThe below chart is a comparison guide of RFID printer, reader and tag providers to help consumer goods executives further their search and understanding of industry offerings.

COMPANYNAME/WEB

PRINTERS

READERS

TAGS

KEY SERVICESPARTNERS

KEY SOFTWAREPARTNERS

KEYPILOTS/IMPLEMENT

UNIQUE RFIDOFFERING

Alien Technologywww.alientechnol-ogy.com

4 4Unisys, Bearing Point,Deloitte, Capgemini,IBM, HP, Catalyst, Irista,

Manhattan, Oracle,Tibco, WebMethods,RedPrairie,

Working with many ofthe CPG suppliers forWal-Mart, Target, and

Supply several readersand antennas as well ason assortment of differ-

Avery Dennison Printer Systemswww.ris.Averydenn

4 4 AWID, Samsys Infini-D, Nice Label Hampton productsPrinter/applicators anddesktop printers thatfeature near-edge print-

IntermecTechnologies Corp.www.intermec.com

4 4 4 Intermec has over 100key RFID partners.

Intermec has over 100key RFID partners.

METRO, Bosch Tools,US GovernmentAgencies

Products and services toimprove productivity,quality and responsive-

LXE Inc. www.lxe.com 4 Alien, Matrics, Sirit, Intel,

RF Code, Identec

RedPrairie, ManhattanAssociates, PeakTechnologies, Provia,

At the request of cus-tomers, unable to detailspecifics, including the

Develops RFID-enabledhandheld/ vehiclemounted mobile comput-

MPI Label Systemswww.mpilabels.com

4 4 4 Northern Apex, Xterprise FnBiometrics, NorthernApex, RedPrairie

Full-scale productionintegration for severallarge food suppliers to

Converting HF and UHFtags from Alien, Avery;Readers from Alien,

OMNI Systems Inc.www.omnisystm.com

4 4 Texas Instruments N/A N/ATargeting CG manufac-turers wanting to sourceRFID tags providing

OMRONCorporationwww.omronrfid.co

4 4 Printronix, Zebra,Weber, R & V Group

Looking for good part-ners. N/A

Inlays used in variety ofbusiness fields; they arehighly-reliable, low

Printronix Inc. www.printronix.com 4

AirGATE Technologies,Beam Fetch, Ciber,ClearOrbit, Chafin,

CYBRA, NiceWareInternational, SeagullScientific, T.L. Ashford,

79 of the top 137 suppli-ers to Wal-Mart selectedPrintronix for their RFID

SmartLine RFIDPrinters, Encode, Print &Apply, RFID Upgrade

Reva Systems www.revasys-tems.com

Systems Integrators andRFID Consultants

Enterprise Integrationand Supply ChainApplication vendors

Customers include RFIDadopters who are scal-ing operations beyond

Intelligent RFID networkinfrastructure to enablerapid, reliable and

RightTag Inc. www.righttag.com 4 Trakker Technologies Artec Group, Smartlink Trade Show, Pharma

Pilot

RightTag manufactures13.56 MHz readers andengines. RightTag

RSI IDTechnologieswww.rsiidtech.com

4 4 4 RSI ID does its own ser-vice. Flexolution N/A

Provides retail and man-ufacturers with RFIDsolutions to meet man-

SkyeTek www.skyetek.com 4 N/A N/A

SkyeTek’s OEM cus-tomers are involved invarious pilots.

HF and UHF RFIDreader modules areTagnostic, have low

SymbolTechnologieswww.symbol.com

4 4Symbol Technologiestrained 320+ engineersand technicians to

System Integrators: IBM,Peak Wireless,Intelligent Systems of

Wal-Mart, PurduePharma L.P., H.D. SmithWholesale Drug

Multi-Protocol RFIDReaders, Multi-Protocoland Multi-Mode RFID

TagStar SystemsGmbHwww.tagstar-sys-

4 4Smart label manufac-turer, Smart cardmanufacturer, RFID sys-

RBS-Berger, GermanyThaxRomania

TagStar is a supplier ofRFID components anddoes not conduct pro-

Develops, produces,markets RFID compo-nents such as smart

Texas Instruments RFID Systemswww.ti-rfid.com

4Bearing Point, SunMicrosystems, 3M,Precision Dynamics

N/A All pilots/implementa-tions under NDA.

TI delivers quality, reli-able, high-performingGen2 inlays to CPG

ZebraTechnologieswww.zebra.com

4 4Zebra works with a num-ber of top servicepartners.

Zebra works with a num-ber of top softwarepartners.

Working with many topsuppliers to conductpilots/implementations

Zebra is a global leaderin on-demand specialtyprinting solutions for

While many analysts havequestioned both the benefits ofRFID and the ability of Wal-Martto achieve its goals in the statedtime frame, Simon Langford, thecompany’s manager of RFIDstrategies, has always been aproponent for the controversial technology.Langford points out that overthe past year, RFID technologyhas not only come down inprice, it has improved by leapsand bounds. The recent arrivalof Gen 2 tags, which are moreaccurate, bolsters this point.Consumer Goods Technologyrecently checked in withLangford about compliance withsuppliers, item-level tagging anddata overload.

How is the RFID compliance withyour Top 100 suppliers coming along? Our RFID implementation is right on track.Currently, Wal-Mart has more than 100suppl iers sh ipping tagged cases andpallets to our three distribution centers inthe Dal las, For t Wor th area, whichservices 140 stores and clubs.

What lessons have you learned fromthe Top 100 that you can apply to thenext generation of suppliers? With any new technology, there are alwayschal lenges and learn ings f rom in i t ia ldeployments. A number of these wereovercome with improved firmware. Thebiggest surprise has been in the data —the kind of information it is showing bothsuppliers as well as Wal-Mart.

Add i t iona l ly, one o f the b iggest

learnings for our suppliers has been that asingle type of tag (antenna design) doesnot necessarily fit all of their products.However, we haven’ t seen a productwhere we cou ldn ’ t f ind a tag tha t ,positioned in the correct place, wouldn’tdeliver the read performance needed tofacilitate process improvements. In fact,many of our suppliers are working withtheir packaging suppliers to have the tagfixed or embedded prior to them receivingthe packag ing. Many packag ingcompanies are car ry ing out lo ts o fresearch in this area. As suppliers wentlive, they started to find many ways thatEPC data would (and is starting to) addvalue their businesses.

How will Wal-Mart help its suppliersmanage the data explosion generatedfrom the EPC? We offer Retail Link to all of our supplies.It is an internet based tool, provided freeof charge, that allows suppliers a detailedview of their business with Wal-Mart andSAM’S CLUB. We began offer ing i t in1991. Retail Link gives suppliers the samevisibility as our buyers and replenishmentmanagers have to information such as

item performance, in stock and insight asto where the item is located within thesupply chain. No other retailer shares asmuch data with their suppliers as Wal-Martand SAM’S CLUB.

We have readers strategically placed inour stores and DC’s and are able to readeither tagged cases or pallets at thesepoints . Through Reta i l L ink, we aresharing the data back with our suppliersso they are able to see movement within30 minutes of a case passing a read point.As the EPC Network is developed anddeployed we will also use this to allow oursuppl iers a common v iew across thedifferent retailers they service.

The real key to managing the additionaldata is to be selective of where you needto either use it or keep it. Just because acase could be read tens or hundreds of

times as it passes a location, it doesn’tmean you need to capture all those reads,you may just need to know that theproduct is there.

Will Wal-Mart benefit from futureRFID benefits like item-level tagging? We do not have a timetable for focusingon item-level tagging at this point. We stillhave a lot to learn at the case and palletlevel. However, we do have many itemsthat are a case size of one, and these arenot excluded from the program, so ineffect we have customer sell ing i temstagged today. Down the road, we seebenefits related to more general item leveltagging and will help tremendously forthings like: returns, recalls, warranties and

battling counterfeit products.

How will the RFID landscape look likeone year from now? I can only speak on behalf of what weanticipate at Wal-Mart. Over the next 12months, we anticipate the expansion ofour RFID implementation to be two-fold.First, we will be expanding geographicallyto more than triple the number of storesequipped with RFID readers. Second, Wal-Mart suppliers will be tagging additionalSKUs in their product mix. We currentlyhave over 100 suppliers “live”, shippingtagged cases and pa l le ts in to 140locations and three distribution centers.We are also working with the next top 200suppliers, plus numerous volunters, to go


A CURRENT AND FUTURE GLIMPSE INTO THE MEGA-RETAILER’S

NEXTGENERATIONRFID

THE WAL-MART REPORT

“AS SUPPLIERS WENT LIVE, THEY STARTED TO FIND

MANY WAYS THAT EPC DATA WOULD ADD VALUE

TO THEIR BUSINESS.” SIMON LANGFORD, MANAGER OF RFID


METRO GROUP, TARGET, THE DEPARTMENT OF DEFENSEAND A SLEW OF

NEXTGENERATIONRFID

PROOF OF PROGRESS

This publication has steadilyunderscored how RFID technologycan improve business processes,collaboration and above all, visibilityof goods throughout the supplychain. However, a fair share of riskcomes with any IT investment andfor many RFID will continue to be theposter child of bad ideas no matterhow much progress is being made.But if the current RFID landscape isany indication, the future of RFIDremains incredibly bright as METROGroup, Target, The Department ofDefense and a slew of mid-marketfirms are mining real RFID benefits.A GROUP EFFORT

METRO Group and Intermec TechnologiesCorp. recently announced the successfuldemonstrat ion of the f i rst EPCglobalGeneration 2 RFID handheld reader thatalso meets sr ingent Europeanrequirements for radio frequency andreader communications protocols. Thenew multi-protocol Intermec IP4 Intellitagmulti-protocol RFID reader reads Gen 2tags from multiple manufacturers. It alsoreads tags based on all major global RFIDstandards, including EPCglobal Gen 2,

Gen 1 and ISO 18000-6b, with a migrationpath to the emerging ISO 18000-6cstandard. “METRO Group and its suppliersalready are exper iencing the benef i ts of RFID,” says Dr. GerdWolfram, execut ive project manager,METRO Group Future Store Initiative.“METRO and Intermec bel ieve thecapabilities of Generation 2 promise evengreater business benefits to retail supplychains worldwide.”

TARGET PRACTICEConsumer goods f i rms have startedshipping cases and pallets of RFID-taggedgoods through Taget Corp.’s Tyler, Texasdistribution center to 10 regional stores.This particular rollout arrives in the wakeof a pr ior p i lot ear l ier th is year thatinvolved 19 suppliers including Hewlett-Packard, Kimberly-Clark and Procter &Gamble. Target installed readers and

antennas at doors within storage rooms,receiving and docking areas and neartrash compactors. Gear f rom ADTSecurity Systems handled the first fivestores while Symbol Technologies tookcare of the rest. According to participantsclose to this particular Target project, aboard of RFID experts were assembled toget the project moving. Those companiesinclude: Extra Prize, Oden and R4, whichVeriSign recently acquired.

DEFENSE MECHANISMU.S. Defense Department suppliers maynow use Electronic Product Code (EPC)tags to comply with the department’srequest to integrate RFID into supplyshipments by 2007. This new capabilitycomes after the EPCglobal Inc Board ofGovernors recently ratified a revision of thetag data standard. The revision incorporatesthe Defense Department’s Commercial andGovernment Entity (CAGE) code and theDepartment of Defense Activity AddressCode (DODAAC), enabling the department’s60,000 suppliers who use CAGE orDODAAC to use those codes to comply withthe agency’s request to apply RFID tags onall department deliveries by January 2007.“This is a milestone for EPCglobal and forthe Defense Department’s mission to ensurecritical supplies are where they need themat the right time, every time,” says MikeMeranda, president of EPCglobal US. TheDefense Department has embraced EPCtechnology to ensure the development ofworldwide, interoperable standards thataddress the global supply chain.

UNLOCKING RFID POTENTIALWhen Wal-Mart required that its top 100suppliers start RFID tagging of shipments tothe retailer’s distribution center beginning inJanuary of this year, Hampton ProductsInternational Corp. volunteered to join theprogram. “We take pride in our innovativeapproach to products, technology andcustomer solutions,” says CEO H. KimKelley. “RFID is important to Wal-Mart,which makes it important to Hampton. Buteven before RFID was mandated, weviewed RFID as a critical component of ourcompany’s global supply chain systems.” Aleading supplier of padlocks, door locks,home hardware, and outdoor l ightingfixtures based in Southern California,Hampton Products IT department decidedto develop its RFID system and its ownproprietary technology. Working with a fewtechnology suppliers, including Avery-Dennison, Hampton brought RFID to itsU.S. distribution center in Foothill Ranch.The IT staff has been involved in every stepof the process – from encoding the chips tolabeling the cartons and the pallets – sousers could learn first hand how to use thetechnology. The company also developed asoftware system to track orders as they arefi l led and shipped through Wal-Mart’sdistribution center in Texas all the way tothe store shelf. In less than a year afterinvestigating the technology, the company

Danish snack manufacturer KiMs decided to conduct an RFID pilot not due to pressure from retailers,but based on the value it could get from having total visibility across the supply chain from suppliersthrough distributors.


NEXTGENERATIONRFIDbegan shipping tagged cases and pallets toWal-Mart. Today, 100 percent of theHampton SKUs for Wal-Mart ’s RFID-enabled distribution centers are tagged.“RFID has significant value for us,” saysRick Tysdal, Hampton Products’ COO.“Our initial pilot program indicates that thisinvestment will result in a reduction in man-hours, improvements in inventorymanagement and increases in supply chainefficiency.”

SNACKING ON VISIBILITYIn June 2003, Danish snack manufacturerKiMs implemented Microsoft Axaptasoftware for manufacturing, raw materialsprocurement, sales order management andwarehouse management, but still soughtafter greater visibility into its supply chain.The firm wanted greater knowledge of theexact location of products at various pointsin the supply chain. KiMs decided toconduct an RFID pilot not due to pressurefrom retailers, but based on the value itcould get from having total visibility acrossthe supply chain from suppliers throughdistributors. “Before the introduction ofRFID there was much less control ofproducts,” says Jesper Touboel, technologymanager at KiMs. “There were even someproducts that just went missing. The hauler

did not sign a receipt when picking upproducts at KiMs, and KiMs did not keeptrack of inventory at its staging area.Consequently, nobody would be able to findout of a pallet or a carton went missingexcept in the biannual inventory count.”

Based in Funen, Denmark, KiMs suppliescrisps and snacks to countries throughoutEurope, often under another label. InDenmark, KiMs has a market share of 50percent, shipping approximately 100,000pallets of snacks per year. Today, KiMsname is on eight out of every ten crisps andsnacks packages that the Danes open.KiMs is part of a larger Nordic group withconsiderable sales outside Denmark.

The mid-market consumer goodsmanufacturer once again tapped MicrosoftBusiness Solutions in concert with anumber of companies for an RFID pilot,including SAMsys for readers and set-up;Philips Semiconductors for chipdevelopment; Avery Dennison, whichproduced the completed RFID tags; andTectura for software implementation.Currently, KiMs is utilizing RFID to trackgoods from production into packing, stagingto warehousing. The physical transportationof the products from the staging area to theexternal, third-party warehouse locatedsome 200 miles from KiMs productionfacility is also part of the scope of the RFIDproject.

According to Touboel, the real-t ime

element and “foolproof-ness” of RFIDprovides some unique strengths overbarcode systems. For example, KiMsmoves pallets from the packing area tothe staging area using a fork-lift 24hours a day. Sometimes, the forkliftdriver gets an urgent request and hasto drop the pallet he has on his truckwherever he is located at the time ofthe request. An inventory discrepancycan occur when the forklift driverscans the barcode in the packing area,which then tells Axapta that the pallethas been moved to the staging areaeven though the pallet may still be inthe packing area.

MINUS THE MANDATEMuch like KiMs, Nancy’s SpecialtyFoods is tackl ing RFID in theabsence of a retail mandate. “Due to thenature and cost of RFID, we thought wewould get ahead of the game for a fewreasons,” says Dave Siegfr ied, MISManager, Nancy’s Specialty Foods.

For one, Nancy’s needed to change howit handled inventory – too much time wasspent locating work in process bins/andfinished good pallets in the warehouse.Nancy’s freshly bakes more than 35 tons ofproduct daily in its 86,000-square foot

manufacturing facility in Newark, California.Nancy’s challenge was unique in that manyof its existing solutions could not function inthe -10 degrees Fahrenheit freezer thatfood was stored in. The bar code scannersoften freeze up in the cold temperatures,causing inventory inaccuracies andproduction downtime.

In addit ion, Nancy’s experiencedunacceptable downtime due to lack ofinventory visibility, which delays throughoutthe entire manufacturing process. Thecompany faced a critical decision – it couldrefurbish its outdated bar-coding system orit could look to a new technology to answerits needs. Nancy’s decided to move toRFID.

In its second pilot attempt (the first pilotwas scratched due to unreliable software),Nancy’s Specialty Foods is nowimplementing RFID on a closed-loop –within its warehouse only — to bettermanage production and inventory storage,integrated with its supply chain softwareprovided by QAD . A warehousemanagement system (WMS) from StratumGlobal, called TagNet, provides Nancy’swith location management capabilities.

The process is this: The RFID solutionflows between the production area and thefrozen storage warehouse. Completed foodproducts and ingredients are packaged inbins or pallets and the tags arecommissioned by a mobile Intermec RFID

interrogator. RFID enabled l i f t trucksprovide mobile active portals on the floor.The Vehicle Mount Units communicate withthe WMS via a wireless LAN in thewarehouse. Application logic in the WMSinstructs the lift truck operator where thepallet needs to be placed in the frozenstorage area. Pick/Move/Put-awayinformation is then displayed on the touchscreens of the forkl i f t for next stepoperations. RFID location tags are used at

the entrance to each slot in the rack storageto verify that the product is placed in thecorrect location.

“Previously, a forklift operator would putthe product away and let the system know,”says Siegfried. “Now, the system tells theforklift driver where to put it. We are workingon this paradigm change in a pilot rightnow.”

As mentioned in the process above,Nancy’s RFID project also includes buildingout a wireless LAN to support its in-houseRFID system. The Cisco Aeronet 802.11b/gWLAN supports the vehicle-mountedcomputers on Nancy’s forklifts, which moveproducts from inventory to packaging forshipment.

Nancy’s expects to go live with its RFIDsystems mid-August. As a result, Nancy’sexpects to cut the time spent locatinginventory in the freezer and will be preparedto go full-scale RFID when retailers, likeWal-Mart request the additional tracking. “Ifwe’re going to have to do it in a couple ofyears, why not utilize the technology tobring some benefit internally to thecompany through a closed loop inventorysystem versus waiting for that ultimate dayof adding 50 cents to Wal-Mart cases,which is about 1.6 million cases per year,”says Siegfried. CG

“EVEN BEFORE RFID WAS MANDATED, WE VIEWED RFID AS A CRITI-CAL COMPONENT OF OUR COMPANY’S GLOBAL SUPPLY CHAINSYSTEMS.” — H. KIM KELLEY, CEO, HAMPTON PRODUCTS

Nancy’s freshly bakes more than 35 tons of productdaily in its 86,000-square foot manufacturing facility inNewark, California


APPROXIMATELY 100 HIGH-LEVEL INFORMATION TECH-NOLOGY AND BUSINESS EXECUTIVES FROM SOME OFTHE LARGEST CONSUMER GOODS FIRMS SHARE THEIR

NEXTGENERATIONRFID

INDUSTRY VIEW OF RFID

To which consumer goods marketdoes your organization belong?

TOP 100 SUPPLIER/ JANUARY2005 RFID MANDATE 24%

TOP 300 SUPPLIER/JANUARY 2006 MANDATE 23%BEYOND WAL-MART’S TOP 300SUPPLIERS 20%

NOT A WAL-MART SUPPLIER33%

PACKAGED GOODS31%FOOD/BEVERAGE 23%OTHER 16%APPAREL/FOOTWEAR9%HEALTH AND BEAUTY9%

What is your organization’sstatus with Wal-Mart regardingRFID?

“Most companies in the retail and consumer goods space are legitimately struggling with thebusiness case for RFID. The initial guidance by the Auto-ID Center that you’d be able to easily find abusiness case here was misleading and misguided, and as a result we are in the trough ofdisillusionment with RFID. However, this doesn’t mean that there won’t ever be a business case forRFID in the industry — it’s just that it will take years of work to fully build out this business case.”4Jeff Woods, Research Vice President, Gartner, Enterprise and Supply Chain Management

Has your organization created a strong enough business case tosupport an RFID implementation aside from retail mandates?

If you are involved in an RFID pilot/deployment, what is thegreatest benefit your organization expects to realize?

PLANNING

2 1 %

“Implementers are becoming ever more strategically focused on the large picture rather than just focusing onthe smaller wins associated with pallet and case level solutions. One of the greatest benefits of RFID is theincreased visibility of physical objects throughout the value chain, from raw material through to consumers,particularly at the item level. By approaching implementations globally, companies realize greater return in lesstime by using the insights from across their organization. The business performance benefits of RFID areincreasing in all areas, including reduced stocks, time and labor, while it is also redefining internal operationsand the operations of business partners.4Thomas Bornemann, Managing Partner, Consumer Products, and Blake Watts, Supply Chain &Electronic Product Code Business Consultant, Clarkston Consulting

“Even though the benefit case has proven hard to justify during the pilot phase, the survey results indicate thatthose companies participating in RFID pilots have a more realistic view of the short-term benefits, but also, thatthey have not lost sight of the long-term value. Short-term, most manufacturers have taken a minimalist ITinvestment approach focused on complying with customer mandates. Long-term, reduction in labor and reducedout-of-stock benefits will only be realized if manufacturers move beyond the compliance approach that most areexecuting today.”4Michael Witty, Program Director of Demand Management Strategies, Manufacturing Insights, an IDC

REDUCED TIME AND LABOR ASSOCIATED WITH COUNTING AND TRACKING ITEMS 24%REDUCED OUT OF STOCKS 21%BUSINESS INTELLIGENCE THROUGH MORE ACCURATE DATA 23%SUPPLY CHAIN VISIBILITY 32%

YES1 7 %N O

6 2 %

CONSUMER GOODS TECHNOLOGY | AUGUST 2005 | www.consumergoods.com|2 7

“These results are in line with the overallstatus of the RFID roll-out within theconsumer products industry. Most of thecompanies impacted by a retail mandateare merely complying with that mandate,and are struggling to find any ROI thatwould compel them to go beyondcompliance. The ultimate vision is toleverage the increased flow of inventorydata, but that is still in the future, asevidenced by the 39 percent ofrespondents who are still only planning touse this data. Very few manufacturershave been able to leverage the additionaldata they are receiving from RFID pilots.In most cases, that data is being usedsimply to track the read rates of products— but not for anything more strategic. Ithas proven more diff icult than theindustry expected to make sense of thehuge volumes of data — companies areunprepared to translate EPC data intoreal business benefits like Out-of-stockreductions. That won’t happen untilthere is a clear business benefit and acritical mass of data — from additionalretailers and additional SKUs — thatwould provide a complete enough pictureto justify making major changes toinfrastructure applications like ERP andSupply Chain to take advantage of thisdata and turn it into action.” 4Kara Romanow, Research Director,AMR Research.

“These results clearly show that manufacturers understand the link between clean product identitydata (data synch) and location data (RFID). When combined, the two provide a more completeview of inventory condition and movement. Still, both RFID and data synch are big projects — withthe potential to waste time and resources if manufacturers don’t scope them carefully. So what doesit take? Forrester advocates that smart manufacturers begin with a philosophy that recognizes dataas a strategic business asset. With this attitude, manufacturers begin to see both initiatives asbusiness — not IT — projects. The next step is defining the deployment roadmap based on processimprovements, the required data to realize these benefits, and data sharing agreements withretailers. RFID and data synch plans that fall outside the scope of this business framework shouldbe avoided at all costs.”4Christine Spivey Overby, Principal Analyst, Forrester Research

Has your company taken advantage of theincreased data flow, suchas improved productinformation, from an RFIDpilot/deployment?

PLANNING3 1 %

N O2 4 %

YES 4 4 %

Has your organization taken steps to synchronize databefore beginning an RFID pilot?

N O5 1 %PLANNING

3 9 %

YES 1 0 %

”Consistent with the discussion in the industry overthe past 12 months, this reflects the continuedskepticism of CPG suppliers in the affordability oflarge-scale tag usage at high tag prices. While thebenefits to the retailer of EPC information are oftenimmediate (inventory on-hand accuracy andtimeliness, reduced labor in receiving, improved in-stock position at warehouse and store-warehouselevel, traceability), the benefits for the manufacturerremain dependent upon sharing/returning EPCmovement information to the manufacturer to changethe supply chain management economics. Hence,product categories will remain ‘uneven in takeup’,with higher-value categories (pharma, consumerelectronics, toys, fashion apparel) leading in adoption.The day that a 99-cent, one pound loaf of white breadis tagged with an RFID/EPC chip is still years away.” 4 Jeffrey R. Smith, Global Managing Partner,

Retail and Consumer Industries, Accenture.

NEVER 14%1-2 YEARS 8%3-5 YEARS 48%6-9 YEARS 17%10+ YEARS 13%

When do you anticipate awidescale RFIDdeployment across all products?

When does your company anticipate areturn on its RFID investment?“As the Consumer Goods Technology RFID survey suggests, RFIDend-users see ROI progressively gaining strength over the next 36to 48 months. ABI Research concurs. From the reader through theenterprise, software continues to evolve, to harness the power ofthe EPC network and the quickly stabilizing market for tags,readers, applicators and printers. 2005 RFID momentum has beentied to generating and using stable, standardized RFID data.Venture financed companies…are developing more commercialsoftware and business applications. Large vendors…are bringingrobust customer solutions to market. Technology marketleaders…continue their pursuit of RFID channel and componentpartnerships to accentuate broader software and service offerings.Vendors large and small, old and new are staking claims on aquickly evolving passive RFID market full of opportunities and ripewith challenges. To date, supply chain RFID has been aboutgenerating information. Now, themarket begins its quest to utilize theinformation.”4 Erik Michielsen, Director

RFID & Ubiquitous Networks, ABI Research

1-2 YEARS 1 4 %3-5 YEARS 4 6 %6-9 YEARS 1 3 %10+ YEARS 1 1 %NEVER 1 6 %


NEXTGENERATIONRFID

OUT WITH THE OLD, IN WITH THE NEW

In May of this year, Uniform CodeCouncil (UCC) and Transora agreedto join forces in an effort to make iteasier for retailers andmanufacturers to establish acommon approach for datasynchronization. Then in June, UCCchanged its name to GS1 US. As apart of the GS1 family, GS1 USimplements standards and providesservices for its subscribers thatenable companies of any size,industry or location to communicatewith trading partners acrossbusiness or geographic divisionsworldwide. Consumer GoodsTechnology recently caught up withBob Noe, former CEO of Transoraand current CEO of GS1 US, tounderstand the changing shape ofhis company as well as industry-facing RFID issues.

Why change the name of yourorganization to GS1 US, especially whenthe consumer goods (CG) industry is sofamiliar with the UCC name? Last year, UCC and EAN merged,creating a new entity called GS1, tosupport commerce globally. UCCnet, asubsidiary of UCC, and Transora are nowcombining operations to form a companythat focuses on providing datasynchronization services.

The industry needs global standards,yet there are many companies that cannotdevote the time and resources to cleaningand registering product data, a critical stepin realizing the benefits of RFID. Whatadvice can you give to these companies? Similar to EDI in the 1980’s , datacleansing and data synchronization are

“real world” init iat ives that enableparticipants to capital ize on newopportunities and streamline the supplychain. Companies must focus oncleansing data and developing a processto synchronize that data with theirtrading partners around the world. Thisdedication allows companies to excel indata synchronization and prepare forother supply chain initiatives, such asRFID, CPFR, and scan-based trading.

Some CG firms that have registeredwith the GS1 Global Registry have notyet reaped the collaborative benefitsfrom their retail partners. Will GS1 USmake any efforts to help push retailersto use the cleansed and registered dataof CG firms?We strongly encourage the continuedadoption of data synchronization by allmembers of the supply chain to provideadditional return-on-investment andlower the cost of usage for participants.

Collectively, Transora and UCCnet,operating as a single entity, will have

over 50 retai lers in our combinedcommunity. Our goal is to work withthese retailers, who are currently in theimplementation process, to reach 100percent compliance.

Manufacturers are also receiving datasynchronization benefits, as noted in the“Global Data Synchronization At Work inthe Real World”, Capgemini/GlobalCommerce Initiative 2005. Johnson &Johnson was able to exchange data withWal-Mart to reduce out-of-stocks,automate the item setup process, andsynchronize dimension data for Wal-Mart’s ordering system.

Companies, such as Albert Heijn ,Gillette, Procter & Gamble, Unilever,and Wegman’s , were also noted asreaping the rewards of successful datasynchronization.

As RFID marches toward wide-scaleacceptance and deployment, will GS1 USoffer additional functionality to help CGfirms manage the onslaught of EPC datathat they will receive?

The EPCglobal standards developmentprocess is user-driven and involvesexperts from broad groups of subscribercompanies collectively determining whatnew functionality may be needed to meettheir evolving business requirements.These needs are expressed in updated ornew standards to support the furtherbuild out of the EPCglobal Network. Datavolume will continue to grow astechnology becomes more widespread.This is an important issue to beconsidered along with other factors thatwill influence the development of futurestandards.

What will the GS1 US organizationlook like one year from now?Transora and UCCnet will collectivelyprovide a single Data Pool solution,enabling industry participants to utilize cutting-edge technology tosynchronize data with trading partnersaround the world. CG

“COMPANIES MUST FOCUS ON CLEANSING DATA

AND...SYNCHRONIZE THAT DATA WITH TRADING

PARTNERS AROUND THE WORLD.” BOB NOE, PRESIDENT,

SAY GOODBYE TO UCC. SAY HELLO TO GS1 US AND THE COM-PANY’S FUTURE VISION ON

nextgeneration rfid

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