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Transforming Businesses with RFID

Carrie Angelico

September 17-20, 2014

TOPICS

• RFID Basics • 2014 Industry Overview – Trends and Drivers • A Look At Retail • Building on the Foundation, Extending the Value • Asset Tracking Use Cases • The Future

RFID

Passive UHF RFID – Ultra-High Frequency – Radio Frequency Identification – Fast bulk data capture without

line of sight – new capability, new applications

– Standards Based: G2v2

Components – Tags/Printers – Readers – Antennas – Software & Tools – Services

Zero Power Configuration

Track and Locate Authenticate

Unique Identification

RFID is being deployed across all industries and

verticals

The Next Revolution of Data Capture Technology

Different RFID frequencies are used depending on the application requirements:

– Read ranges – Speed of data transfer – Host material and environmental conditions – Government regulations

Low Frequency •125 KHz •Read range < 0.5m/1.6 ft. • Low Read Speeds • Small Amount of Data (16 bits)

High Frequency •13.56 MHz •Read Range < 1m/3.9 ft. •Medium Read Speeds • Small to Medium Amounts of Data

PASSIVE RFID FREQUENCIES

Ultra High Frequency •860-960 MHz •Read Range typically around

3m/10 ft. but can be as high as 150 feet

•High Read Speeds •Medium to High Amounts of Data

HOW PASSIVE RFID WORKS

The electromagnetic energy “wakes up” the tag. The tag then harvests the power from the RFID reader to respond by sending the data on the tag over the electromagnetic radio waves back to the reader

HOW RFID DIFFERS FROM BARCODE TECHNOLOGY Ba

rcod

e • Line of sight • Visible • One at a time • SKU or class of good • Inoperable if visual

damage • Operator

intervention • Read-only • Cheap

RFID

• General vicinity • Wireless • Batch processing • Identifies unique item • Harder to deface • Automated • Read/write • Harder to replicate • Higher cost than

barcodes

RFID VALUE PROPOSITION

VISIBILITY… RFID IS AN EASIER WAY TO COUNT AND TRACK • RFID IMPROVES EFFICIENCY

• RFID IMPROVES PRODUCTIVITY

• REDUCES LABOR COSTS

• RFID INCREASES ACCURACY • RFID INCREASES SALES

• RFID INCREASES CUSTOMER SATISFACTION

TOPICS

• RFID Basics • 2014 Industry Overview – Trends and Drivers • A Look At Retail • Building on the Foundation, Extending the Value • Asset Tracking Use Cases • The Future

RFID HYPE CYCLE

2005

2008

2014

http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp

• Where are we today?

The RFID industry is predicted to grow by up to as much as 20% each year

RFID BY THE NUMBERS • The total RFID market for 2014 is $8.89

billion, up +13% from 2013

• RFID tags, readers, software and services will generate $70.5 billion from 2012 to 2017 and rise to $27.31 billion in 2024

• Tagging for the apparel industry has grown to 3 billion RFID labels in 2014 and is expected to grow to more than 8 billion in 2016

• Most of the tag growth in 2014 is from passive UHF RFID labels, with UHF tag sales overtaking HF and LF tag sales by volume in 2012

• 33% of the total US apparel market is

engaged in RFID activity today and in 2015 Retail will become the single largest RFID sector

Sources: IDTechEx, IDTechEx, ABI Research,

• Adoption moving from Tier 1 to Tier 2 Companies (Mid-Market)

• Better Ergonomics / Purpose built devices

• Higher performance + Smaller form factors + lower cost

• RFID enablement of mobile devices

• Drive toward full automation • Continuing to remove the human factor

• Integration of Technologies • One size does not fit all – UHF, HF, NFC, UWB, BLE • Driving multi-faceted solutions

• Data ---> actionable business information • Importance of software and data analytics

• Moving toward the Internet of Things (IoT)

TRENDS

TOPICS

• RFID Basics • 2014 Industry Overview – Trends and Drivers • A Look At Retail • Building on the Foundation, Extending the Value • Asset Tracking Use Cases • The Future

MAJOR APPAREL RETAILERS HAVE ADOPTED

33% OF THE TOTAL US APPAREL MARKET IS ENGAGED IN RFID ACTIVITY TODAY

WHO IS DOING WHAT

Shoe Compliancy, DCs, Omni-Channel Rollout

3 Depts, Inventory Accuracy

Shoes, Luggage, Dress Shirts, and Jeans

Shoe Compliancy

Inventory Accuracy in Men’s, Boy’s, and Automotive departments

900 STORES DEPLOYED

1,100 STORES DEPLOYED

48 US STORES + HUDSONS IN CANADA

400 STORES DEPLOYED

3,600 STORES

1,158 STORES 3 Departments, Receiving, Inventory, Sales Floor, Backroom; Fitting Room Assistant pilot

STORES THROUGHOUT CA, NJ, NY Fitting Room Assistant

ACADEMIC RESEARCH VALIDATES BENEFITS

PHASE I RESEARCH: RETAILERS

INVENTORY accuracy up from 63% to 95%

96% REDUCTION in inventory cycle counting time

REDUCING the time to locate products by 18%

CUTTING out-of-stocks (OOS) at retail up to 50%

BOOST sales 4% to 20%

INDITEX CEO ANNOUNCES RFID PLANS JULY 17, 2014

• 6,300 store locations worldwide • Zara (its biggest division), Massimo Dutti, Bershka, Pull and Bear

and Stradivarius. • RFID is already in operation at all of Zara's distribution centers

and at more than 700 Zara stores within 22 countries • 2,000 Zara stores by 2016, gradual rollout across other chains

The RFID technology makes distribution more efficient and in-store garment inventory counts more accurate, while also improving customer service. Pablo Isla, CEO, Inditex Group

OMNI-CHANNEL AND RFID

Accessibility Anywhere and Availability Always are Priorities for Customers

Say availability is more important than price

58%

Regard in store stock level information as critical for purchase decision

71%

Will wait for item if not in stock at local or convenient store

8%

OMNI-CHANNEL AND RFID MANDATES FOR OMNI-SHOPPER EXPERIENCE In response, 83% of Retailers surveyed have an omni-channel initiative in place or planned

OMNI-CHANNEL / RFID PROCESS OVERVIEW

ZONE 1

ZONE 2

1. Create Store Zones 2. Cycle Count Inventory 3. Receive Omni-channel Orders 4. Fulfill based on a high degree of

confidence 5. Pick by Zone, locate by Geiger 6. Ship to customer

a. reduce declines and shipping costs b. satisfy customer expectation

TOPICS

• RFID Basics • 2014 Industry Overview – Trends and Drivers • A Look At Retail • Building on the Foundation, Extending the

Value • Asset Tracking Use Cases • The Future

SMART FITTING ROOM Accenture and Microsoft (w Motorola Fixed RFID Reader)

RFID recognition RFID tags on the clothes are read and bring up information about the items on a touch screen. ROI for retailer Cross-sell opportunities, and measuring the increase in shopping basket sizes. Alerting the sales assistant Requests for different or more clothes merely makes more use of existing staff Options requesting a different size or color; suggestions for what other items might go well with the ones being tried on

• German retailer Gerry Weber has already integrated RFID with its EAS system to curtail theft

• American Apparel has reduced shrink by 75 percent at some of its RFID-enabled stores.

• Employees are much less likely to shoplift when they know that stores take daily inventory, and that they can pinpoint the exact time an item left the store without being paid for.

• It’s a much different dynamic than when inventory was taken once a month, and the company might not know about a stolen item for weeks.

• RFID gave us much greater visibility into shrinkage - when you know at any point in time which product left your store without being paid for, and you can build models around that, that can be pretty strong information.”

• Roger V. Blazek, vice president of shortage control and omni-channel retailing at Bloomingdale’s, which has deployed RFID at seven stores and has tagged more than four million units.

RFID FOR THEFT PREVENTION

Standard loyalty programs: ● Discounts at point of sale ● Special offers and rewards based on amount spent / points earned ● Time-based promotions ● Easy refunds on purchases ● Notifications: drops in prices, new arrivals, recall alerts ● Low-price guarantees

RFID VERSUS TRADITIONAL LOYALTY

RFID enabled loyalty programs: ● Better service; sales associate alert re: high value customers ● Real-time, personalized messages and offers ● Purchase-history based product recommendations ● Access to shopping lists, or the ability to build wish lists ● Faster checkout ● In-store behavioral analytics

TOWARD SUPPLY CHAIN ADOPTION Academic Research Validates Benefits

PHASE II RESEARCH: SUPPLIERS

• Revealed inventory accuracy by itself can provide full return on investment

• Revealed 60 potential benefit areas, e.g., Work in Process, Inventory Accuracy/Audits, Out of Stock Reduction, Sales Lift, and Loss Prevention

• Cost of tagging offset by reduced labor, negligible error rate, and dramatic reduction in claim costs

• Example - Sourcing giant Li & Fung is seeing: • 94% reduction in time to receive raw

materials • 83% reduction in time to receive

finished goods • 93% reduction in time to cycle count

completed goods

SUPPLY CHAIN BUSINESS CASES

Business Case Area Bar Code Systems (Today) RFID Solutions Case Studies

Inventory Accuracy ~80% >98%

Inventory Cycle Count 1x per year 12x to 24x per year

Receive Audits Sample .1% to 10%

100% Audits on Inbound (Container, Carton)

Shipping Audits Sample .1% to 10%

100% Elimination of Misshipments

(Container, Carton)

Documented Shipping Errors >1% 0%

Estimated Excess Inventory 10% to 20% 3% to 5% Lean Principles Apply

TOPICS

• RFID Basics • 2014 Industry Overview – Trends and Drivers • A Look At Retail • Building on the Foundation, Extending the Value • Asset Tracking Use Cases • The Future

• RFID automated workflow led to more reliable data collection,

real-time visibility, and consistency, setting a higher standard for facility efficiency and potential • Operators are more focused on performing their tasks and their workflow is streamlined with less paper-based

documentation and tracking duties

• Needed an automated tracking system to monitor and guide each step of its

>150 daily vehicle conversions at its new Chicago Modification Center • The new system had to more efficiently track, guide and report every step of

vehicle conversion

TROY DESIGN & MANUFACTURING COMPANY Partner Problem

Solution

Benefits

- Automotive Manufacturing – Work-In-Process (WIP)

• Motorola FX9500 Fixed Readers and AN200 Antennas were integrated with Lowry Solutions Work-In-Process

(WIP) manufacturing software and 7iD middleware • “The application makes decisions and directs traffic flow based

on the information in the system, and it’s hands-off, so our operators aren’t riffling through paper, trying to see where things go…” said TDM IT Manager Chris Morgan

• Roline needs to identify each tire as it goes through a multi-stage production process

for retreading. Each tire must conform to the same international standard as a brand new tire. Inventory process for new tires takes 2 people an entire day.

• Roline customers must inspect their fleet’s tires each week. It’s an arduous manual task to look for a barcode label that could be missing or damaged and most times located on the inside of the tire.

• MC3190-Z handheld and FX9500 fixed readers are used to read the tags on all of the

tires in inventory as they move through the process of retreading. • Ferm RFID Solutions partnered with Smart Res who manufactured the tags for

both solutions. Permanent rubberized tags are vulcanized/embedded into the new tread. • Software co-developed by Roline stores passive tag information • Handheld readers are used by customers to inspect the tires on their fleets of vehicles • Worn tires are inspected, retreaded, vulcanized, painted and warehoused. At each point

the information is updated on the tires tag. • The entire contents of a warehouse can be inventoried by one employee in an hour. • Warehoused new tires can now go through the inventory process in less than a day.

An accurate inventory provides correct and available sellable stock at all times • Roline customers save hours on each vehicle inspection by using a handheld reader to read

the tagged tires on each vehicle without having to remove them. • Customers are able to process insurance claims immediately for stolen and faulty tires

ROLINE Partner Problem

Solution

Benefits

- Manufacturing - Tracking/Inventory Efficiency

LARGE NORTH AMERICAN BAKERY COMPANY

Partners

- Direct Store Delivery – Returnable Transit Item Tracking

Problem

Solution

Benefit • Ability to record movements of trays and have 100% visibility • Automated inventory replenishment orders generated based on empty

trays picked up at store • Able to verify the accuracy of route deliveries • Greatly reduced the loss of plastic carrier trays • Ability to track expiration dates in case of recall and stale product

promptly removed from store shelves

• 100,000 bread trays per year lost and not returned to the baker • No accounting for what was shipped and what was returned • Needed a way to count trays

• 2 UHF RFID tags are embedded in the plastic trays • Motorola fixed RFID readers placed at key points of production and

loading • RFID tags are programmed to reflect the product loaded on the tray • Each driver is equipped with RFID enabled MC65 handhelds to read

the tags during delivery and pick up • MiTEzSales Mobile® DSD software with RFID to count inventory,

confirm sales quantity and track assets

• The solution has reduced the amount of labor time workers previously spent counting assets from 3-4 weeks down to only 1-2 days, and with more accurate results

• Increased visibility into their operations, enhanced the asset utilization, & measurement of the parameters of some operations

• State-of-the art approach to track almost every human & asset in their hospitals

• Hospital needed help managing assets throughout its facilities

MEDICAL PARK HOSPITAL GROUP Partner Problem

Solution

Benefits

- Healthcare – asset tracking

• Borda Technology installed 80 FX9500 & FX7400, 2 MC3190-Z & 300 antennas to create 80 zones for

passive tracking • An average of 3,000 passive Omni-ID UHF RFID labels are affixed to assets, printed & encoded with Zebra

Technologies RZ400 RFID printers & contain the item’s serial number and other details such as expiration or maintenance dates

• Employees use the MC3190-Z to find specific items in the zone it was last recorded, conduct inventory counts within each room, & identify any items that should be moved or serviced

• Borda also includes other technologies for patient & high-value equipment solutions including active-RFID, NFC, & RTLS

• Frozen-food storage warehouse with 32,000 pallet positions necessitates

improved tracking for their top customers (60% of business) • Employees’ failure to scan barcodes or enter pallet positions was costly:

days of labor to locate, or payment of lost value to customers • Top customers required quick turnaround with little time to locate pallets

ESKIMO COLD STORAGE Partner Problem

Solution

Benefits

- Warehouse – pallet tracking

• Partner, Jamison RFID, installed FX7400 fixed readers with AN480 antennas

at the entrance to each aisle containing high priority pallets • Upon receipt of item, employee applies MidSouth RFID Labels that can

withstand very low temperatures & have customer & product information • Barcode process persists, but should an employee not type in the data, the

specific aisle of items are known as pallets move in and out of RFID portals

• Within four months of RFID installation, Eskimo has saved $100,000 –

paying for the RFID solution • The technology is projected to save $233,000 annually, based on the

number of labor hours previously spent searching for missing pallets and the cost of paying for pallets not located in time

• Customer satisfaction increases with timely delivery of stored pallets

• Motorola MC9190-Z long read-range and read speed handheld readers to detect the tags through coats providing an easier, more convenient experience without the need for the swiping or barcode scanning of passes and can verify identify

• Zebra custom designed UHF RFID-enabled ID cards and P330I UHF RFID printer/encoders for full color lift passes that include mag stripe so they can be associated with a credit card and used for food and other purchases

• Easy Scan system allows the staff to see a photo of the guest on the reader • Fixed readers deployed in specialty areas on mountains for automated reads not requiring any guest interaction • EpicMIX software application provides guests and Vail with resort activity data

VAIL SKI RESORTS Partner Problem

Solution

Benefits

• Leading mountain resort operator was looking for a new way to enhance their guests’ experience – “the Wow Factor”

• Instant authentication of the guests’ lift passes/ID cards • Enhanced security provided as season passes cannot be forged or cloned • Increased knowledge about customers’ habits by tallying vertical feet skied,

lifts used, number of runs, times, etc. • Guests are given pins based on their activities and photos taken of guests are sent directly to their personal portal and

can be immediately shared on Facebook • Vail engages more with their customers and is able to market targeted goods and services to guests

who have opted in • All five Vail Resorts are ranked in as the top 20 resorts in North America by SKI Magazine

• Case files were lost as they moved throughout 2 buildings, sent to courtrooms, or

provided to law-enforcement officers • Manual process was time consuming and error prone as employees removed a

file from the shelves & provided to a specific individual • Only a short window of time provided to find files prior to court appearances

• Ali Bin Ali Technology Solutions supplied Motorola partner, FileTrail,

middleware, with 200 Motorola FX7400 fixed readers (mounted in the ceiling with POE) & 500 antennas

• 375 read points in 2 facilities to track assets as they move or are files with optional alerts sounding if proper authorization if the move is not established

• Employees affix RFID UHF tags to each item and can enter details pertaining to that case file

• Tracking approximately 120,000 items (80% case files, the rest office assets & confiscated property) • Files are located quickly and real time inventory is achieved, reducing the time spent searching for missing

files by 60% • Number of missing case files has dropped and significant security benefits are achieved

QATAR PUBLIC PROSECUTION Partner Problem

Solution

Benefits

- Government- File & Asset Tracking

• Inefficient management of 7 resort properties and their central laundry

distribution center • High operating costs to manage linens • Time-consuming and inaccurate inventory reporting

PALACE RESORTS Partner Problem

Solution

Benefits

- Hospitality – Linen Tracking

• InvoTech Systems Multi-Property RFID Linen & Laundry

System was installed to automate control of linen inventories at all 7 properties

• 500,000 linens are tagged with Fujitsu UHF laundry tags & read by a competitive fixed reader and Motorola’s MC9190-Z handheld reader

• More efficient laundry operations providing real-time tracking

and processing of the entire laundry carts of soiled items & pallets of clean linens

• Consolidates all laundry processing, centralizes inventory, & increases staff productivity • Monitors the aging of each item based on usage for quality control & to forecast linen purchases

TOPICS

• RFID Basics • 2014 Industry Overview – Trends and Drivers • A Look At Retail • Building on the Foundation, Extending the Value • Asset Tracking Use Cases • The Future

EVERYBODY’S END GOAL ALWAYS ON = MINIMAL HUMAN INTERVENTION

STRONGER TOGETHER

The Motorola Solutions and Zebra Technologies acquisition brings together two global leaders in complementary technologies – empowering workforces to build profitable and lasting customer relationships. Our best-in-class mobility solutions make businesses more efficient and improve the bottom line.

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