Benefits of RFID technology And how it enhances logistics management

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Benefits of RFID technologyAnd how it enhances
logistics management
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Outline

• Introduction of RFID technology
• Benefits of RFID technology
• How RFID enhances Logistics Management
• Wal-Mart case study
• Metro Group case study
• Challenges and Trend

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Overview of RFID

• What is RFID?
• -Radio-frequency identification (RFID) is a
  generic term for
• technologies that rely on radio waves to
  store and retrieve data
• using devices--RFID tags.
• -Like barcodes, RFID is used to identify and
  track objects
• -RFID is a technology which uses tags as a
  component in an
• integrated logistics solution set that will
  evolve over the next several
• years.

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RFID Outlook

• Prospective Application
• Supply Chain Management
• Security/Access Control
• Transportation
• Toll Collection
• Point of Sale
• Baggage Handling
• Asset Management
• Automobile Immobilization
• Rental Item Tracking
• Animal Tracking
• Real-Time Location Systems

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Benefit of RFID Technology

• Comparison of RFID with Bar codes

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Benefit of RFID Technology

• Main benefit of RFID
• - Faster access to objects
• - Accurate
• - Easier access to objects
• - Flexible

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RFID enhanced Logistics Management

• RFID provided innovate ways to identify, locate
  and monitor goods as they travel through the
  whole logistics management of many industries.
• - Increase accuracy of orders
• - Reduce inventory handling cost
• - Improve inventory handling
• - Fewer misplaced items
• - Reduce losses from theft

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Wal-Mart Case Study -Wal-Mart Store and Its
RFID Plan

• Wal-Mart was founded in 1962, It is the world's
  largest public corporation by revenue, according
  to the 2007 Fortune Global 500.
• June 2005 RFID active in six distribution
  centers and up to 250 Wal-Mart stores and SAM'S
  CLUB locations
• October 2005 Use in 13 distribution centers
  and up to 600 Wal-Mart stores and SAM'S CLUB
  locations
• January 2006 Next top 200 suppliers begin
  tagging cases and pallets

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Wal-Mart Case Study (cont.)- RFID applied in
Wal-Marts logistic management

• Reduce and count the mistake, obtain accurate
  information immediately.
• Improve the automatic intensity of the logistics
  and handle efficiency, reduce the labor cost.
• Accurately collect real-time demand data to lower
  out-of-stock rate and increase inventory turns
• Improve customers satisfactions and increase
  sales in retail store.
• Share visibility information with suppliers
• It has been estimated that the use of RFID would
  save the
• retailers about 69 billion worldwide.

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Wal-Mart Case study (cont.)- Issues of
application RFID technology in Wal-Mart

• Cost problem
• - reduce Tag Prices (5 Cent Initiative)
• Privacy concern
• - consumers, competitors, thieves
• Human error
• - data read error

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METRO Group Case Study- METRO Group and its RFID

• METRO Group Future Store Initiative, in Germany,
  is one of the top five trading and retailing
  groups in the world. METRO Group has an
  international presence with over 2,400 locations
  in more than 30 countries.
• In 2004, METRO Group launched an industry-leading
  RFID Innovation Center in Neuss, Germany, which
  provides a unique testing facility environment to
  further the retailers use of radio frequency
  identification (RFID) technologies across the
  supply chain.

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METRO Group Case Study (cont.)- Main benefit of
RFID to METRO Group

• --Retail International Distribution Center
• The use of RFID in Retail International DC
  enhances its logistics management by increase the
  accurate and decrease the process time.
• As the use of RFID, the Retail International DC
  saved material and labor cost and also saved time.

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METRO Group Case Study (cont.)- Problems of use
RFID in METRO Group

• --Retail International Distribution Center
• It is likely that not all partner of Retail
  International DC use RFID and not all pallets
  contain EPC-compliant RFID tags. Therefore, the
  new and old processes have to coexist for a
  while.
• false negative reads, such as a tag that should
  be read is not read, can also happen. Retail
  International DC also has to deal with false
  positive reads such as tags that should not be
  read are accidentally read.

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Summary-Challenges and Trend

• Challenge
• Privacy
• - Tracking individuals
• - Tracking personal activities (e.g.,
  purchase
• habits, travel)
• Security
• - Unsanctioned readers
• - Theft of information
• - Inadequate encryption
• Global differences
• - Regulations around collecting data
• - Standards
• Cost
• - Expensive

• Trend
• Adoption of RFID the right strategies
• The technology will eventually become widely
  adopted within the supply chain.
• The company prepared to invest now will be the
  early winners with benefit from their experience.
  

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Thank you!