IBM RFID Executive Presentation

Pervasive / Wireless e-business

IBM RFID Executive Overview

Faye Holland

WW RFID Solution Leader

Pervasive/Wireless e-business

Dec04

Emerging Markets

Contents


 What is Radio Frequency Identification (RFID)?

 What is the market opportunity for RFID?

 What is IBM’s play in the RFID space?

 What are the IBM Market Spaces for RFID?

 Why IBM?

2 Emerging Markets – Pervasive/ Wireless EBO Revision: December 17, 2004 © 2004 IBM Corporation


Building an effective RFID enabled business solution requires a fundamental understanding of the technology

RFID: The fundamentals

Reader

3

Tags

What is RFID?

 A means of identifying a unique object or person using a radio frequency transmission



Tags (or transponders) that store information, which can be transmitted wirelessly in an automated fashion

 Readers (or interrogators) both stationary and hand-held read/write information from/to tags

Emerging Markets – Pervasive/ Wireless EBO

How does it operate?

 RFID tags are affixed to objects and stored information may be written and rewritten to an embedded chip in the tag

 Tags can be read remotely when they detect a radio frequency signal from a reader over a range of distances



Readers then either send tag information over the enterprise network to back-end systems for processing or display it to the end user

Revision: December 17, 2004 © 2004 IBM Corporation

4


RFID Basics

Tags

 Active - Includes a power source to help transmit a signal

 Passive - No power to transmit signal; relies on readers

 Semi-Passive - Not generally available as yet

 Frequency - Radio wave frequency at which signals are transmitted (Telephone example: 900 Mhz, 2.4 Ghz, 5.8

Ghz)

 Data Capacity - Many options, will depend on application

 Antenna - Device attached to tag to help capture reader signals

Readers

 Reader - Interrogators that typically emits a radio signal via an antenna and collects information that is captured from “scans” using some form of “controller software”

 Antenna Device attached to a reader which helps transmit radio signals and capture “scan” readings

Emerging Markets – Pervasive/ Wireless EBO Revision: December 17, 2004 © 2004 IBM Corporation


Examples of RFID tags from different vendors

Spider 2450 Mhz tag from

RFCode Intellitag 915 Mhz tags from Intermec

Technologies

Family of low-frequency tags from Texas Instruments

5

2450 Mhz Backscatter tag from Alien Technologies

13.56 Mhz tag with largest storage capacity (4KBytes) from

Hitachi Maxell


Smallest 13.56 Mhz EPC tags from

Revision: December 17, 2004

TagSys

© 2004 IBM Corporation

6

G e n e r a o n i t

2


EPC Tag Classes

• Protocols have been developed for class 0 and class 1 tags, standards for the other classes of tags are under development in EPCGlobal. Class 0 and class 1 tags will be used in the various mandates from Retailers.

• Class II tags are expected to reach the market in late 2004, early 2005

• Achieving a unified communications protocol for Class 0, Class 1 and evolving these to higher classes is a critical factor in spurring demand

Class 0

Class

Class I

Class II

Class III

Type Comments

 Read only passive identity tags  Factory programmable (64 bit only)

 Write once passive identity tags

 WORM with provisions for read/write (96 bit min.)

 Passive tags with added functionality, e.g. memory or encryption

 Shorter range (i.e. 4”-18’)

 Read/write (multiple), user memory

 Semi-passive RFID tags



Battery Assisted

– reader activates, battery powers

 Medium range (i.e. 10’-50’)



Read.write, user memory, sensors, encryption

Class IV



Active tags

– communicate with readers and other tags on the same frequency band

 Active – battery powered

 Long range (i.e. 300’)

 Read/write, user memory, sensors, etc.

Class V

Emerging Markets

 Essentially ‘readers’ – can power class I, II and III tags, as well as, communicating with class IV and with each other

– Pervasive/ Wireless EBO

Source: Auto ID Center/EPCGlobal; Intermec



Tag Frequency

7

Frequency

125 kHz

13.56 Mhz

869, 902-928 MHz

2.45 GHz

Capabilities

Read Range - up to 18"

Good Penetration in Moist

Environments

Slow Data Range

Costly Tags

No Anticollision

Read Range up to 3'

Good Penetration in Moist

Environments

Poor Performance in Metal

Environments

Many Standards in Financial Market

Anticollision (10-40 tags / sec)

Read Ranges up to 15'

Fast Data Rates

Good Performance in Metal

Environment

Anticollision (50 tags / sec)

Many Standards in Logistics / Supply

Chain

Read Range up to 3'

Good Performance in Metal

Environments

Poor Performance in Moist

Environments

Fast Data Rates

Anticollision (50 tags / sec)

Applications

Pallet/container

RPC

Windshield decal

Label inserts

Credit card

Pallet/container

RPC

Windshield decal

Label inserts

Credit card

Metal mount

Label insert

Metal mount

Label insert

Hardened tag format

Reusable form factor


There are a number of RF ranges for tags, including:

100-140 kHz, 13.56 MHz,

862-928 MHz, 2.45 GHz – each have very specific market applicability



RFID Reader Technologies

 There are three basic choices for reader technology – based on the job or type of work to be performed

Stationary

 Entrances - portals

 Conveyors across assembly lines

 Points of sale

 Overhead

Mobile

 Hand-held

 Wireless or batch

 One-piece or two piece tagging

PCMCIA

 Mobile service agent



Examples of RFID readers from different vendors

1555 Handheld serial readers from Intermec Technologies

915 Mhz Network stationary reader (with antenna) from Alien

Technologies

9

902-928 Mhz serial stationary reader from

Matrics

303.8 Mhz Mantis wireless LAN reader from RFCode


S6410 Serial reader from Texas

Instruments



RFID –purchasing curve

Tag and reader costs projected over time

Purchasing Curve

Industry tag sales

(millions of units)

Tag price to highest volume users

2002

150

$0.30

Industry reader sales

(millions of units)

Reader electronics price to volume users

0.1

$500

2003

500

$0.25

0.3

250

2004

1,200

$0.15

0.6

150

2005

3,500

$0.10

1

125

2006

15,000

$0.05

2

100

10 Emerging Markets – Pervasive/ Wireless EBO Revision: December 17, 2004

Source: AMR Research



World Wide Challenges for RFID

11

Standards

EPC

ISO ucode

US and Canada:

902 – 928 MHz

4 W

Europe:

862 – 870 MHz (869

MHz 0.5 W)

Tags

Cost

Durability

Packaging

Weight

Materials Mexico:

Typically 915MHz, Case by case basis

Frequency

Frequency

Power Level

Duty Cycle

South America:

Undefined but 915 is typically accepted

Northern Africa:

862 – 870 MHz

(869 MHz)

Southern Africa:

915MHz Typically permit FCC

All Evolving

approved devices

(902 – 928 / 4 W)


Middle East:

Potential for

862 – 870 MHz

Australia:

915 – 927 MHz

1 Watt


China:

Permissive

915 MHz

Japan:

950-956 MHz

Potentially available

Pacific Rim:

Singapore 862 – 870 MHz, Taiwan

915MHz

New Zealand:

915 – 927 MHz

1 Watt



RFID tags are the next step after barcodes

RFID tags have many advantages over the barcode…

Barcode/ UPC RFID Tag/EPC

Efficiency

Dependability

Ability to read one tag at a time (line of sight required)

Ability to read multiple tags simultaneously (no line of sight required)

Labels easily damaged Tags less susceptible to damage

Can be used in harsher environments

Data Capacity Limited amount of data can be assigned

Significantly higher data capacity to capture detailed information about product

Accuracy close to 100%

Flexibility Static information Potential for read/ write capability, making tags reusable

…and are already in limited use across several industries



Military containers: 250,000 containers are monitored for the

Department of Defense

 Automotive: Inventory

Management at Ford



Baggage Handling Logistics:

San Francisco Airport, Swiss

Federal Railway

 Mobile Assets: Singapore has tagged cars for road taxation,

American “I-pass” prepaid highway toll systems

RFID has not yet been widely adopted due to high implementation costs and a lack of standards – industry leaders are combining their efforts to address this issue

Emerging Markets – Pervasive/ Wireless EBO Revision: December 17, 2004 © 2004 IBM Corporation 12


Electronic Product Code (EPC™) Vision: pen standards for pervasive product tagging

 The EPC vision uses low-cost RFID radio tags and readers to uniquely identify and track objects to improve inventory visibility and reduce costs throughout the value chain

 Real-time information related to each object is stored and accessed via the internet

 It is an open, standards-based system that facilitates collaboration among partners in the value chain

 IBM is actively involved in defining the future of

EPC vision through the EPCglobal organization

Prototype Auto-ID radio tags

The Auto-ID system is not a stand alone solution or service offering, but rather a key enabler to current and envisioned initiatives within the value chain



The sponsors of EPCglobal are come from multiple industries and geographies

14

Board of Overseers

Abbott Laboratories

Ahold, IS

Best Buy Corporation

Canon Inc.

Carrefour

Chep International

Coca-Cola

CVS

Dai Nippon Printing Co., Ltd

Department of Defense

Ean International

Eastman Kodak

Gillette

Home Depot

International Paper

Johnson & Johnson

Kellogg's Corporation

Kimberely Clark Corporation

Kraft

Lowes Companies, Inc.

Metro

Mitsui & Co, Ltd.

Nestle

Pepsi

Pfizer

Philip Morris USA

Procter and Gamble Company

Sara Lee

Smurfit-Stone Container Corp

Target Corp.

Tesco Stores Ltd.

The Gillette Company

Toppan Printing

Uniform Code Council

Unilever

United States Postal Service

UPS

Visy Industries

Wal-Mart Stores, Inc.

Wegmans Food Markets, Inc.

Westvaco

Yuen Foong Yu Paper Mfg. Co.,

Technology Board Members

Accenture

ACNielsen

Alien Technology

Avery Dennison

AWID

British Telecommunications (BT)

Cash's

Catalina Marketing Corp

Checkpoint Systems, Inc.

ConnecTerra, Inc.

Ember Corporation

Embrace Networks

Flexchip AG

Flint Ink

GEA Consulting

GlobeRanger

IBM

IDTechEx

Impinj, Inc.

Information Resources, Inc.

Intel

Intermec

Invensys PLC

Ishida Co, Ltd.

KSW Microtec AG

Manhattan Associates


Markem Corp.

Matrics

Morningside Technologies

NCR Corporation

Nihon Unisys Ltd.

Nippon Telegraph and Telephone

NTT Comware

OATSystems

Omron Corporation

Philips Semiconductors

Rafsec

RF Saw Components

SAMSYS

SAP


Savi Technology

Sensitech

Sensormatic Electronics Corp

Siemens Dematic Corp.

STMicroelectronics

Sun Microsystems

Symbol Technologies

TAGSYS

ThingMagic

Toppan Forms

Toray International, Inc.

Vizional Technologies

Zebra Technologies Corporation



EPCglobal – commercializing the Electronic Product Code

 The base of the EPC vision is the Electronic Product Code – a robust labeling convention that is embedded into each radio tag

 What is the EPC ™?

A product numbering scheme

Created by the Auto-ID Center

Managed by EPCglobal

 How is it different from today’ UPC barcode number?

Variable length

Supports multiple industries

Uniquely identifies every single item (unique serial number)

EPC ™ - variable length product identification code

Header Domain Class Instance



RFID Standards

 Auto ID / EPCglobal Standards Compliance is a Strategic Issue

Customers demand AutoID/EPCglobal compliance

Significant support and participation from Retail/CPG players

IBM has minimal influence on the board of this organization

IT companies have issues with EPCglobal’s IP policies

Software and data standards for connecting readers and applications

Tag data enrichment through object lookup

 WW standards needed for RF technology and tag data formats

RFID Air Interface standard for item management (ISO 18000 part 6)

Information interface for object orientated use of RFID in item management (ISO 15961/62)

Application standard for the use of RFID in the macro-supply chain (EAN/UCC GTAG)

Application standard for tire and wheel identification (AIAG)

 Data privacy and ownership issues and regulations emerging



National, international and industry standard organizations require monitoring to ensure environment supportive of IBM technology

ANSI, IEC, ISO, EIA, AIAG, TCIF, ATA, GS1, EPCglobal

Emerging Markets – Pervasive/ Wireless EBO © 2004 IBM Corporation 16 Revision: December 17, 2004


17

RFID is an On Demand Technology

 Enables end-to-end business process integration

Recognition of real-time transactions/ actions of an object, via an automated system.

Decrease of redundant recording processes and data reads

Automation of manual processes

Streamlined processes and improved order turnaround

 Automates response to customer demand, market opportunities, and external events

Recognition of alert events or special condition

Forecasting and real-time inventory diversion

Improved supplier and customer relationships (vendor direct, manufacturer, retailer, consumer)

Just-in-time manufacturing

PC card readers


RFID helps to operationalize manual processes and read dynamic conditions across intermittent conditions.


Contents






 Why IBM?



Significant market opportunity exists, with the IBM opportunity representing $3.1B by 2008

 Based on estimates from Venture

Development Corp., ABI, Yankee

Group, and AMR, IBM estimates the

RFID market compound annual growth rate at approximately 34%





IBM estimates total market for 2004 to be $1.5 billion

Recent market triggers such as Wal-

Mart, Tesco, U.S. Dept. of Defence,

Target decisions to implement RFID systems are expected to accelerate market adoption

Worldwide RFID M arket

6000.00

5000.00

4000.00

3000.00

2000.00

$1.3B

$1.5B

1000.00

0.00

2003 2004

$2.2B

2005

$3.4B

2006

$4.3B

2007

$5.3B

2008

Readers

Tags

Hardware

Software

Services


Source: IBM estimates using inputs from Venture Development Corp., ABI

Yankee Group, AMR

Revision: December 17, 2004 © 2004 IBM Corporation 19


RFID WW IBM Addressable market opportunity differs by Geo; several drivers explain the growth

20

 EMEA Drivers

 Retail initiatives (Tesco, Metro)

 Cross industry adoption occurring

 Increasing user acceptance

 Cross-border shipping

 Government regulations

 AG Drivers

 US Government mandates

 Retailer initiatives (Walmart, Target,

Albertsons)

 Automotive, A&D, and Government industries are extending the adoption rate

 AP Drivers

 Expansion of suppliers in the region

 Adoption of radio frequency in Japan and

China

 Expectations that Australian Defense

Force will follow US Govt. lead

 Government and electronics industries becoming more of a focal point

WW RFID IBM Addressable Market Opportunity by Geo

3000

2500

2000

1500

1000

500

0

AP

EMEA

Americas

$.6B

2003

152

232

246

$.7B

2004

179

257

304

$1.1B

2005

263

364

483

$1.9B

2006

443

629

870

$2.5B

2007

566

809

1127

AP

EMEA

Americas


Source: IBM estimates using inputs from Venture Development Corp., ABI

Yankee Group, AMR



Market Drivers

Market

Economic

Physical/ Technical

Standards

Social/ Political

 Increasing end-user knowledge of RFID technology, its applications, and its advantages over traditional methods of data-capture

 Emerging and growing markets for different RFID applications across multiple industries

 Demand driven by large retailer requirements, CPG and supply chain vendors’ investment

 Industry systems integration and process expertise developing

 Business pressures driving adoption are intensifying -- supply chain enhancement, asset exposure, regulatory pressures

 Falling equipment prices and improved performance resulting in better price-toperformance ratio



Rapidly decreasing cost of RFID tags and readers

 Technology is beginning to mature



Technical and physical interoperability, interference and data overload issues will be overcome through 2004-2005

 Enterprise middleware will embed RFID middleware to sustain/grow market presence

 “Agile readers” emerging -> able to read multiple tag protocols

 Chip and frequency standards are expected to evolve globally



Active tags will be increasingly evolve over time requiring unique solutions

 Industry-wide standards for many applications leading to interoperability amongst different manufacturers’ products, including hardware



Government requirements for cross-border trade

 Regulatory mandates

 Safety and security concerns has increased

Sources: IBM, Venture Developmentt Group, Frost & Sullivan, BRG Townsend, The Yankee Group



Market Inhibitors

Market

Economic

Physical/ Technical

Standards

Social/ Political

 Availability of skilled RFID experts

 Over hyped value propositions, business cases, and timelines



Data ownership and security

 A multitude of vendors with fragmented approaches

 Confusion as to providers who have a WW presence and delivery capability

 RFID tags are still expensive compared to barcodes (approx. $0.25)

 Implementation and back-end integration costs are very high



ROI may not be immediate

 Balance of benefit across the trade relationships



Country-specific idiosyncrasies in regards to spectrum bands

 For wide-spread adoption, tag costs must drop below $0.05



Tag and reader incompatibilities still exists between rival manufacturers

 Read reliability still needs improvement. Heavily dependent on business application and tag placement



RFID signals can be blocked in certain environments (e.g., liquids, metals)

 Data loads produced by RFID systems could overload company systems



Lack of flexible and global standards

 Class 1 Generation 2 tags not available until late 2004/early 2005; EPC and ISO standards at odds until then

 Cross-company data sharing model has not been defined.

 End-user acceptance: Privacy, for example, remains a concern

Sources: IBM, Forrester Corporation, Frost & Sullivan, BRG Townsend, Bear Stearns, The Yankee Group



Achieving an RFID-enabled supply chain will take some time

Ongoing Challenges

 Physics

– Read reliability – depends on tag placement, environment, application

– Metals and liquids

 Standards

– Tags and Readers

– Cross-company data sharing model

 Economics

– Tag cost reduction is critical

– Confirming the benefit potential when dependent upon trading partners

 Data Ownership and Security

 Consumer Privacy Concerns



Lessons Learned - RFID Business Cases

24

 Every Business case is different

– “Pain Points” (e.g Do you really have a shrink or counterfeiting issue?)

– Distribution method ( e.g. full pallet vs. mixed vs. innerpacks)

– Process capabilities

– Trading partners

– Product margins and brand loyalty

 May need to look beyond your own four walls for significant opportunities

 Need to consider the transition

– Trading partner adoption over time

– Decreasing costs ( tags, readers, software, etc)

– Transitioning from one tag application strategy to the next

 Think strategically...but balance with operational realities



Lessons Learned - Pilots

25

 Physics matters !

– Tag placement on products

–

Existing RF and wireless networks

– Environmental factors – Static, handling, temperature, condensation, etc



Successful deployments require planning

–

Testing tags and readers

– Procuring hardware

–

Network and power considerations

 How will you measure success ?

–

Read reliability metrics

– Data integration

– Cost and benefits assumptions validated

Not enough detailed discussion on cross-company data sharing



RFID discussions start about compliance and quickly move toward how to take transformation solutions to customers

High

Transformation



Enable new revenue sources through partnership



Data enabled services



Transform operating and business models

 Meet minimum requirement



Replace or supplement existing barcode systems



Increase accuracy of existing applications

Low

Low

26

Compliance

Optimization

 Optimizing logistics



Reduced labor

 Enable warehouse management

 Enable JIT manufacturing

 Real-time decision support



Automate and speed processes


Complexity

Visibility

 Visibility through Value

Chain

 Enable collaboration with external clients and suppliers



Maintain full record of item history and touch-points



Track and trace materiel through the full value chain


High



Developing an RFID strategy

Strategic



How can RFID enable our overall strategic vision?

 Should we be a leader or a “fast follower”?



Which trading partners should I pilot with and when?

 How will we operate in a world of dual processes? And for how long?

Organizational



What are the change management implications?



What are the risks involved in an RFID implementation?

Financial



What is the expected return on our RFID investment?



What specific RFID applications can drive value for us?

 What is a realistic adoption pattern/rate of

RFID and how will that impact my business case?

Technological



What are our technology requirements for an RFID implementation?



What is the architecture that best delivers on my strategic technology plan?

 How will an RFID implementation impact our current applications?


Contents






 Why IBM?



The strengths of IBM

 The world’s largest information technology company; the world’s largest business and technology service provider ($42.6 billion); and the world’s largest IT financier ($35 billion in assets)

 $89.1 billion in annual revenues in 2003

 Net income of $7.6 billion in 2003

 Total assets of $104.5 billion in 2003



316,000 employees worldwide



With operations in over 160 countries worldwide


30


IBM business unit overview

Sales & Solutions Services

Wireless

EBO

Finance

Banking

Financial Mkts

Insurance

Distribusion

CPG

Retail

Travel &

Trans

Industrial

Automotive

Electronics

Chem & Petro

Aerospace

Communications

Telecomm

Utilities

Media &

Entertainment

Public

Government

Healthcare

Education

Products & Technologies

Personal

Computers

Application

Development

Tools

Printer

Systems

X-Series

P-Series

I-Series

Z-Series

IBM Research



RFID relates to selfidentifying “Smart Objects”, while other smart chip applications relate to smart machines and consumer-initiated transactions

“Smart Transactions” “Smart Objects”

RFID Tagging

RFID Tagging offers the vision of a “consumer driven supply network” based on cooperative vendor/retailer business models.

Assets are tracked using nonline-of-site RF to identify the object via a unique identifier

1.

2.

3.

4.

5.

supply chain work in process mfg asset management security & access control consumer applications

Embedded

Solutions

“Smart Machines”

Asset

Monitoring

Embedded Solutions are focused on the remote access / control of appliances and machines via embedded sensors or smart chips that collect and synthesize status

1.

2.

3.

embedded machines intelligent vending / unattended retailing connected home scenarios and service aggregator solutions

1.

2.

3.

4.

Asset Monitoring is the remote collection of data across networks of community-based assets in the field via embedded sensors or chips which transfer that data across wired/wireless lines to a remote location metering, AMR e-SCADA condition monitoring predictive maintenance

Smart Cards / Secure ID

1.

2.

3.

4.

Smart Cards/Secure ID is focused on smart chip solutions that provide for the authentication of an individual based on information contained on a smart chip device (smart card, sim card, transponder, etc) carried by that person to allow for actions / transactions either in a “secure” or “non-secured” fashion eCash

– spend, loyalty, IRC secure id toll collection smart card / sim card


32


The IBM Point of View

 Transform business operations by coupling RFID, a powerful enabling technology, with process change in areas such as supply chains, asset management and work in process manufacturing

 Integrate RFID into your business using a planned approach and learn through using the technology while recognizing standards & technology capabilities will evolve over time

 Build a foundation today that you can scale for future growth

 Incorporate RFID into your broader strategy for process improvement or transformation such as e-production or Consumer Driven Supply Chain, since “compliance alone will not deliver value”

 Gain benefits today by applying RFID capabilities to improve specific business processes

 Business transformation drives requirements for a scaleable, flexible, robust and manageable infrastructure

© 2004 IBM Corporation Emerging Markets – Pervasive/ Wireless EBO Revision: December 17, 2004


IBM’s Strategic Direction in RFID

Importance of the RFID Market



Market opportunity will grow to over $2B by

2007 with significant growth rates



Game changing technology



Market drivers will lead to broad adoption by 2006

 IBM competitors are entering the market

IBM’s Vision



Become the dominant Services and

Middleware SW provider in the RFID solutions market, by adding value to our customers businesses and delivering endto-end solutions

33

IBM Strategic Direction



Focus on key RFID markets

– Supply Chain, Work In Process, Security & Access

Control

 Focus on key industries

 Develop end-to-end solutions

 Build a strong RFID ecosystem

 Support and drive open standards



Forrester: “RFID Middleware Vendor Profile: IBM "

"IBM’s strong integration and application development capabilities will make it a good option for firms with a best-of-breed application landscape — particularly those looking for a one-stop services and software offering."

34

Source: Forrester: “RFID Middleware Vendor Profile: IBM” August 2004



The AMR Research Risk Assessment Profile lists IBM Global

Services as the Leading Service Provider for RFID Deployments

IBM leads or ties with market leaders in seven of eight categories:

 Domain Expertise



Delivery Expertise

 Referenceability

 Internationalization

 Business Strategy

 Financial Strength



Customer Practices

 International Capabilities

35

The AMR Research Report, RFID in Consumer Products: Which Service Providers Have the

Goods? May 2004, Kara Romanow and Dana Stiffler


36


The AMR Research Risk Assessment Profile lists IBM Global

Services as the Leading Service Provider for RFID Deployments

The Bottom Line:

AMR Research’s Risk Assessment Profile analysis of the service providers reveals that no firm can be considered low-risk yet, but leaders like IBM Global Services and Accenture lead the pack in hands-on

RFID deployments .

 IBM Global Services -- IBM leads or ties with market leaders in seven of eight categories. Higher than average years of CP industry expertise in its core CP

RFID team puts it just ahead of Accenture in Domain Expertise. Where IBM pulls away from the pack is in its technology expertise, complexity of delivery, and in referenceability. Its ability to link RFID projects to cutting-edge

DDSN initiatives also sets it apart. References admired IBM’s Business

Consulting Services RFID team for "not falling into a vat of RFID Kool-Aid."

Internationalization and overall International Capabilities scores tie with those of our other two top global players: Accenture and Capgemini.

Source: The AMR Research Report, RFID in Consumer Products: Which Service

Providers Have the Goods? May 2004, Kara Romanow and Dana Stiffler



IDC Leadership Grid: WW RFID Services Market

Source:

IDC Study: "Worldwide and U.S. RFID

Services Competitive Analysis and

Leadership Study, 2004: Disruptive

Technology in Waiting and Why the

Services Value Chain Matters"



IBM laboratories worldwide - 3 IBM RFID Test

Centres

Solution Partnership Centres :

Waltham, MA - US

Chicago, IL - US

San Mateo, CA - US

Hursley, UK

Paris, France

Stuttgart, Germany

Shanghai, China

Sydney, Australia

Tokyo, Japan

Seoul, Korea

Bangalore, India

 Wireless Enterprise Lab (WEL) :

Gaithersburg

La Gaude

Raleigh



Technology Lab

Austin

 Demo Lab

Raleigh

 WebSphere Integration Centres :

Chicago

San Mateo

Washington

Singapore

Sydney

Boeblingen

Hursley

Paris



Global e-business Solution Centre

Dallas



Others

Hawthorne

IBM RFID Test Centres

Gaithersburg

La Gaude

Yamato

SPC Satellite Centres :

Budapest, Hungary

Warsaw, Poland

Tel Aviv, Israel

Helsinki, Finland

Sao Paulo, Brazil

Toronto, Canada



IBM’s world class RFID test lab objectives

 RFID testing services

Technology Providers (tags, readers, printers, middleware)

Customer products (liquid content, metals in product or packaging, foils, special packing problems)

Specific use cases (speed, temperature)

Operating environment (RF interference)

Specs/standards (e.g. Wal*Mart's specs on read rates and distance)

 Testing Approaches

Your Target RFID Site

"mobile on site" testing

IBM sends our lab equipment temporarily to client location

Helps identify site-specific factors disrupting RFID solutions

Your Lab

IBM assists clients in designing and implementing permanent labs on client premises

Our Lab

IBM RFID Test Center (IRTC) offers full range of cutting-edge RFID capabilities

Low-cost, entry level options

Clients send pallets to IRTC for series of tests with a broad array of vendors and equipment

Client report benchmarks results for the product, technology, and spec identified

IBM offers complex RFID system consulting including custom solutions and integration.



IBM’s RFID organization

IBM has a matrix, non-hierarchical teaming approach to RFID

Industry (S&D, BCS) IGS SWG

Distribution

• GTM & Marketing

• Customer Deliverables

• Industry Alliances

Sean Campbell, Bill Paulk,

Jan Jackman

Industrial




Kal Gyimesi

Public




Bill Phillips, Radha Sekar,

Tony Prince

ITS BCS Other

SMB

Jeff Benton, Tom Motyka,

Pat McNabb (AG)

Communications/

Financial Services

Pervasive/

Wireless EBO

 Strategy

 Thought Leadership

 Standards Bodies

 Solution Development

 Alliances

Software Group

• Solution Development

• Alliances

Sensors &

Actuators EBO

 Software Development

 Alliances

 Standards Bodies

Robert Mayberry

Sesh Murthy

Ann Breidenbach

Eric Gabrielson

Faye Holland

Research  FOAK

 Solution Development

Industry & Solution Labs

 Demonstrations

 Prototypes

 Blueprints

 Testing

Paul Chou

Stefan Hild



IBM Investments in Solution Development

41

 Multi-million $ Investment

 Supporting RFID as strategic play

 Focused RFID Expertise

 Pervasive/ Wireless Emerging Business Opportunity

 SWG (with unique RFID investments)

 Services - ITS and BCS (with additional focused investment)

 Research (with additional $ investment)

 18 Months Experience with Solution Development

 Complete, tested and integrated solutions

 Keeping ahead of market demand

 Industry specific focus

 Componentized Middleware Products with RFID Capabilities

 Robust scalable infrastructure

 Unique extensions for RFID Solutions



IBM RFID Solutions Architecture Investment

 Important to our customers, across industries

 RFID is a key transformation initiative for consumer products and retail companies

 “The adoption of RFID technology is inevitable. It’s transformational promise, huge.

But the success of RFID in your business depends on your infrastructure.”1

 Domain architecture provides flexibility and scalability to maximize business value capture

 Group logically-related technology components

 Adapt to rapidly changing business and technology needs with minimum disruption



Protect IT investments in both new and existing business applications



IBM envisions the supply chain as a synchronous response environment

Companies will require a consistent architecture to support triggers from intelligent devices

(RFID) and retailers

 Insulate layers of technology advancements through loose coupling, flexible & clean interfaces between domains

 Support evolving standards (ISO, EPCglobal)

1 Source: CIO Magazine – 12/01/03, The RFID Imperative By Meridith Levinson)



The End-to-End Component Model is split into specific domains to contain the architecturally significant groups of components

Tagged

Object

Domain

Antenna &

Reader

Domain

Systems Management Domain

Edge

Domain

Premises

Domain

T

Business

Process

Integration

Domain

Enterprise

& Business

Application

Domain

43

Security & Privacy Management


T

T T

Object Directory Domain

T

T Tooling – support for customized business logic



IBM plays in many areas of the value chain and partners to provide an end-to-end solution


Tagged

Object

Domain

Antenna &

Reader

Domain

Edge

Domain

Premises

Domain

Business

Process

Integration

Domain

T

Enterprise

& Business

Application

Domain

T

T T


44

Security & Privacy Management

RFID System Integrators

Hardware Providers

Infrastructure & Storage

Application Management & Strategic Outsourcing

Emerging Markets – Pervasive/ Wireless EBO Revision: December 17, 2004

T



The Partnering Strategy Maps to the RFID Solution Domains

Systems Management Domain IBM T

45

Tagged Object

Domain

AeroScout

Alien

Avery Dennison

Intermec

MeadWestvaco

Philips

Printronix

Savi

Symbol

Texas Instruments

Wavetrend

Wherenet

Zebra

Antenna &

Reader Domain

AeroScout

Alien

AWID

FEIG

Intermec

MeadWestVaco -

Intelligent Systems

SAMSys

Sato

Savi

SIS

Symbol

TagSYS

Texas Instruments

ThingMagic

Wavetrend

Wherenet

Zebra

Security & Privacy Management

Edge

Domain

Hardware

Arcom

Emness

Software.

IBM

ConnecTerra

T

Premises

Domain

IBM

ConnecTerra

OAT Systems

MeadWestVaco

Savi

Wherenet

IBM

VeriSign

T

IBM

Business

Process

Integration

Domain

Enterprise &

Business

Application

Domain

T


ERP: SAP,

PeopleSoft

WMS: Red Prairie,

Manhatten

Retail: Retek

Planning: i2,

Manugistics

IBM

RFID System Integrators

Bearing Point, Cap Gemini, IBM Intel, IPI, Intellident

Hardware Providers

IBM

Infrastructure & Storage

IBM

Application Management & Strategic Outsourcing IBM

T



IBM RFID Software Solution Architecture


Antenna and

Reader Domain

Edge Domain Premises Domain

Enterprise & Business

Application Domain

Business Process

Integration Domain

Dock

Door

Reader

Conveyor

Belt

Reader

Handheld /

Portable

Reader

RFID

Label / Tag

Printers

Visual

Indicators

RFID

Controller

WebSphere

Embedded

Software w/ IBM RFID enablement


Portal

Server

EPC

Information

Services

WPC

IBM Application Accelerators

DB2

RFID

Premises

Server

Business

Events

MQ

 WAS J2EE platform

 MQ Messaging

 IBM RFID Software

RFID

Integration

Server

XML, other over MQ

WMS

ERP

SCM

 WBI Message Broker

 WBI Integration Connectors

 Tivoli Remote Management

Supply Chain

Business Partners

Switches and

Sensors End to End Reliable Messaging Ensures Data Integrity

Persistent Data Flexible Integration



We advise the execution of integrated and concurrent work streams to accelerate our client’s RFID readiness

47

Assess

Plan & Design

Implement

Pilot

Run

Feedback

Feedback


Feedback



To assist in tailoring a client solution, the following business adoption questions need to be reviewed

Assess Plan & Design

Pilot Implement Run

Managing

Trading

Partner

Relations

How can I enhance relationships with my suppliers and vendors?

How do I communicate with my trading partners?

How will RFID impact my business operations with my trading partners?

Managing my

Business

What benefits can I gain through greater visibility to my supply chain, manufacturing process, asset status and/ or inventory levels?

How do I configure a scalable RFID solution for world-wide operations?

How will RFID impact my business operations?

How can I implement a reliable – scaleable and extensible RFID solution that will integrate with my overall architecture?

What is the most costeffective way to ensure that I achieve required service levels?

Understanding my Technical

Environment

How does RFID interact with my products, my processes and my technical environment?

How does RFID interact with my products and my technical environment?

How will RFID impact my technical environment?



IBM can also help our clients understand where they fit in the RFID Offering Framework



Managing

Trading

Partner

Relations

I have mandates being placed on me by my trading partners

I understand there will be an impact to how I interact with my trading partners – but I do not know what it is

I want to gain RFID experience so that I can respond to / or issue a mandate(s)

Managing my

Business

Understanding my Technical

Environment

I intend to place mandates on my trading partners

I intend to understand how

RFID can enhance my business operations

I understand there will be impact to my business environment – but I do not know what it is

I am considering implementing RFID across my business

I have completed successful pilot(s) and am ready to deploy an RFID solution including associated process changes and back-end integration

I understand there will be an impact to my technical environment

– but I do not know what it is

I need to understand how to define and deploy an architecture for my RFID implementation that can scale as I extend the use of

RFID

I have deployed my RFID solution and now I need to effectively manage this solution



IBM has a breadth and depth of RFID offerings to help our customers understand and implement RFID solutions based upon business processes and business objectives.

Our IBM team will work with the customer to understand their needs and tailor a solution from a set of the offerings we can provide

Assess

Plan & Design









Business Case

Assessment

RFID Test

Center

QuickStart

Services

Solution

Development

Workshop

RFID Execution

Roadmap











RFID Site Survey

RFID Capabilities Lab review

RFID Technical Solution Design

Incl. Software Domain Mapping &

Trading Partners

RFID Partner Selection

Business Process

Transformation

Pilot

 RFID Pilot

Define/ Validate Pilot Requirements

Build Pilot

Test Pilot

Pilot Oversight & Performance

Results



50

Security & Privacy Services


Implement



RFID Enterprise Deployment

Trading Partner implementation

Initial facility implementation

Application Design and

Implementation

RFID hardware installation

Security tools deployment

Network integration and implementation

Process Transformation

Training

Application planning, testing, integration and

Implementation

 RFID Total

Management

Services

Maintenance

Software Help

Desk

Remote Systems

Monitoring

On Site Services


Run



Achieving the Vision



Business Consulting

Business case and deployment strategy development; pilot planning and implementation; process design; application implementation/integration

Technology Services

Technology network and infrastructure design, deployment and maintenance

Strategic Outsourcing

Management, hosting and outsourcing of RFID Solution

Software and Research

Open and scalable RFID infrastructure, data integration and management tools

Alliances with Hardware and Software Application Providers



Industry-Focused RFID Initiatives

 As a partner for leading industry players:

Business strategy

Pilot design, delivery & management

Technology and business application integration

On-demand infrastructure, software and services

 Specific examples:

Consumer Products / Retail

- Dedicated teams since 2002

- IBM Auto-ID Business Case White Paper Series

- Worked with GCI to develop a Retail/CPG EPC Adoption

Roadmap

- An end-end order-fulfillment RFID implementation accelerator, Pick

Pack Ship, built by the SWG Distribution Sector Solutions team

Automotive, Electronics, Forest & Paper, Aerospace

- Automobile Tire tagging and Tire-Vehicle correlation using RFID technology

- Launched competencies in RFID 2004

Pharma White Papers

Streamlining pharmaceutical manufacturing and distribution

Thwarting counterfeiting

Public Sector

- US Department of Defense recently awarded IBM BCS the contract to oversee their RFID initiative Program Management

Office (PMO)

Emerging Markets – Pervasive/ Wireless EBO 52 Revision: December 17, 2004 © 2004 IBM Corporation

Contents






 Why IBM?



RFID across industry sectors

Healthcare

Industrial

RFID Across All Sectors

Retail/CPG

Government

54

Logistics Field Service



Examples of RFID applications in all industries



Retail

Lower labour costs

Out-of-stock triggers

Reducing shrinkage

Reducing inventories

Locating products

Real-time supply/demand data

Smart shelves

Self check-out

Reverse logistics

Customer convenience



Healthcare/ Pharma

Tracking hospital equipment

Patient ID and tracking

Preventing medication errors

Tracking samples/ vials etc

Environmental monitoring (e.g. blood samples)

 Manufacturing

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Quality control

Lot Tracking

Recalls

Government regulations

Inventory accuracy and visibility

Labour & material costs

Asset utilization

Contract manufacturing

Supplier Management

Customer relations

Supply chain management

WMS

Inventory

Gray markets/ theft

Shrinkage

Shop floor execution

 Government

-

-

Homeland security

Military/ defense asset tracking

Anti-counterfeit measures

Product recalls

 Transportation & Logistics

-

-

-

-

-

-

-

Asset utilization and tracking

Volume planning

Automated sorting

Automated data capture

Shipment route tracing

Delivery reliability/ efficiency

Contract pricing verification

Reduced claim costs

 Construction

-

-

Asset utilisation and tracking

Automated data capture

Yard control

Safety equipment tracking

 Other

-

-

-

-

-

Farm animal tracking

Contactless payment systems

Sensor/ sensing applications

Theme park applications

Airport tracking of baggage/ passengers



The RFID solution cluster is defined by five market spaces

Supply Chain

Management

Work In Process

Manufacturing

Asset

Management

Security &

Access Control

Leverage RFID technologies to transform supply chains by providing end-to-end visibility of goods and enabling improved inventory management.

Includes: Supply Chain Mgmt using RFID for Warehousing, pallet/goods tracking,

Inventory Tracking, Track & Trace, Sensor/ sensing applications. Also covers RFID impact of counterfeiting and fraud.

Apply RFID technologies to the in process manufacturing processes to enable effective inventory tracking and management, product line efficiencies, and JIT manufacturing advantages.

Includes: Automation of assembly, Component production, Production of vehicles.

Companies have physical assets (plants, truck fleets, PCs etc) that are needed to make, and to deliver products and services to customers - knowing where an item/ vehicle is on route, and also tracking of depreciating good – tools, HW, equipment, leased items.

Includes: Equipment tracking, Fleet management, Vehicle maintenance management,

Track & Trace, Military and defense tracking.

Monitor the movement and use of valuable equipment and personal resources.

Includes: Access control and tracking, Animal tracking, Automobile ignition security,

Baggage handling systems, Inventory control, Parking lot security and access, Shoplifting prevention, electronic article surveillance, Vehicle security, Sensor/ sensing applications.

Consumer

Applications

Monitoring peoples movements, personal security, convenience and Point of sale applications.

Includes: Personal identification and authentication, personal security and safety, Patient

ID and tracking, Maintaining shelf stock, Innovative payments, Return management,

Purchase maintenance..



Each market space addresses specific customer needs

Supply Chain

Management

Work In

Process

Manufacturing

Asset

Management

 Lower labor costs by automating data collection and data transfer

 Reduce errors in mis-shipments, lost inventory and redundant data reads

 Reduce theft and shrinkage

 Drive government compliance through regulation

 Utilize remote product maintenance, warranty and recall alerts

 Minimizes re-work – insures accuracy of manufacturing,

 Production Line Efficiencies - expedites locating and retrieving the correct part, facilitates the staging of products and reduces manual processes

 Lowers manufacturing costs – alleviating labor intensive processes e.g. manual barcode reads

 Helps eliminate recalls

– automation of part integration tracking

 Less Line Stoppage - continuous inventory of parts in passage

 Provide rapid identification of company assets

 Ensure secure tracking through the point of transfer

 Reduce theft and shrinkage

Security &

Access Control

 Ensure secure, convenient access to personal, confidential information

 Provide a mobile, dynamic data repository that can be updated

 Reduce theft, decrease fraud and mitigate risk

 Improve users “peace of mind”

57

Consumer

Applications

 Improve individual safety

 Ensure secure, convenient access to personal transaction data

 Increase users’ convenience in accessing goods and services

 Decrease fraud and mitigate risk



There has also been an increased focus on Traceability which affects 4 of the 5 segments

Supply Chain

Management

Traceability is about tracing life cycles of individual products (sometimes people) starting from their resources, materials, parts, subassemblies through final products ending up with consumer use and recycle processes for the purpose of

•Individual Quality Assessment, Individual Response/Action of business processes,

Individual Environmental Impact Analysis, Individual Risk Analysis, individual Customer

Services, Individual Recycling, Granular Optimization of Resources, etc

Work In Process

Manufacturing

Traceability

Asset

Management

RFID

Applications

Traceability

Applications

RFID technology is expected to play a major role in Traceability applications because we can write/carry/read IDs, attributes and generated data of objects in motion by embedding.

Security &

Access Control

Consumer

Applications



Sample Customer Experiences

(more detail in separate reference ppt)

Track and manage grocery store inventory from the distribution centre to and within the retail store environment. IBM have provided business consulting, middleware, implementation, hardware and support

BP enlisted the help of IBM Global Services Integrated Technology Services’ Wireless Consulting for this project. In this year-long technical consulting contract, IBM is providing subject matter expertise in RFID physics and sensory technologies. Business benefits for BP will likely come from a reduction in chargeback and shipping errors.

The Fishkill plant needs to use thousands of different active containers for different functions that are transferred from storage area, process tools and manufacturing facilities - all of which are very valuable. Every container has an integrated passive RFID tag with a unique ID (common across all IBM sites) - know where its been, where its going and its history. Every container has an integrated passive RFID tag with a unique ID

(common across all IBM sites) - know where its been, where its going and its history

The project provides near real-time inventory visibility to the Philips Semiconductors business units. IBM provided an end-to-end solution with RFID Middleware and consulting and integration services.

A Large Paper

Company

A Major US Car Rental

Company

At the Burlington facility, RFID tags affixed to the container-level and item-level for tracking the movement of and location of hazardous materials containers helps ensure IBM production exceeds environmental and regulation safety standards.

Our client needed differentiation in a commodity market to elevate vendor switching costs, increase market share and provide a competitive advantage. The client solution will use RFID for product tracking and portal technology for inventory visibility throughout the supply chain. IBM Consulting and SWG involvement.

Rental cars are equipped with RFID tags that ensure vehicle location and movement are identifiable at all times while on the rental lot and when entering/leaving.

APC needed to prepare for the implementation of RFID because of requirements identified by some of its customers such as Wal*Mart and the DoD. IBM helped designed and install a Phase I Pilot at APC’s manufacturing facility in Rhode Island. The solution included business consulting, hardware, middleware and implementation.

59

SGM (Shanghai GM) SGM hope to improve inventory and supply chain management of field material. Now field workers need check it

Emerging Markets – Pervasive/ Wireless EBO Revision: December 17, 2004 has to wait for materials because material requirement is not found timely.



What does IBM stand for?

60

Experience

 IBM implements RFID strategies with customers and in its own locations

 IBM addresses compliance whilst moving customers through optimization to transformation

 Offers a phased approach to RFID implementations

 Ability to connect to multiple business applications (incl. ERP, WMS, legacy)

 Change management, process design and business case a focus

 Proven capability in complex systems integration, standard based

 IBM Research

 Developed and patented RFID technology

 Highest number of patents each year for last 10 years

 IBM’s Gaithersburg, Tokyo and La Gaude testing facilities provides on-site advisory services to design technology solutions in the context of your business needs


Vertical Integration

 Implemented RFID & wireless solutions in many industries

 Deep vertical integration and expertise

 Dedicated industry teams

Full Equation

 IBM positioned to provide all the necessary infrastructure required to implement a RFID solution :

 Hardware

 Wireless software/middleware

 Device operation management, deployment and support

 Secure and scalable solutions

 Global coverage & Global financing

 Partnering capabilities across value chain

 IBM has RFID partnerships with over 25 leading technology players including producers of readers, tags and chips, software and storage solutions



Market trigger: Wal-Mart expands RFID mandate to include all suppliers by 2006

 In June, Wal-Mart required its top 100 suppliers to have products on pallets employing RFID chips and in cases with RFID chips beginning in January 2005

Pilot ramp-up in 2004 – starting with ~20 suppliers in Jan. ’04.

Regional implementation roll-out – start with Texas region ( 3 DCs, ~150 stores)

By January ’05 - ALL products flowing through Texas region for Top 100+

DSD and DC, all impacted formats, including SAMS Club

 Wal-Mart has indicated it would start deploying Electronic Product Code

(EPC) technology in the United States and then quickly move to implement it in Europe, then the rest of the world.

 In August, Wal-Mart announced it would require all suppliers to implement RFID systems by 2006


Source: RFID Journal .



Market trigger: U.S. DoD will require suppliers to use active and passive RFID technology by 2005

 DOD memo: “The DOD will be an early adopter of innovative RFID technology that leverages the Electronic Product Code (EPC) and compatible tags. Our policy will require suppliers to put passive RFID tags on lowest possible service part/case/pallet packing by January

2005. We also plan to require RFID tags on key highvalue items”

 The new policy expands active RFID tracking of all: sustainment cargo unit movement cargo ammunition shipments pre-positioned materials and supplies.





Market trigger: Tesco RFID announcement: IGD Retail

Logistics Summit (London) – 6/11/03



Philip Clarke (Main Board Director; IT, Logistics & International

Businesses) announced the following:

"We will have RFID infrastructure in all UK stores by this time next year”.

(approximately 1,000 locations)

Selected suppliers (by size and category) will be required to send Radio

Barcode Tagged pallets and cases to Tesco starting September 2004

1 Quarter ahead of Wal*Mart

Tesco will give suppliers 6 months notice (i.e. April 2004 for first wave)

A series of trials and launches through Q1-3 2004 will precede Phase 1.

All suppliers will have to ship tagged pallet and cases by the end of 2006

“Suppliers should start R&D efforts now”

Tesco will continue to trial item level tagging in 2004

“We firmly believe suppliers will have four-wall benefits through using this technology”.

Visit the website @ tesco.com/radio barcodes



Market trigger: Metro Store Announcement: NRF, Jan 04

 The project at Metro highlights the accelerating deployment of radiofrequency-identification technology in the retail industry.

 Metro's RFID rollout, planned for November 2004, is expected to reach 250 stores and 10 central Metro warehouses in Germany within the first year and involve 100 of its biggest suppliers, representing 65% of its sales in

Germany.

 Metro expects to equip all of its roughly 800 stores in Germany with the system by the end of 2007.

 The Metro rollout follows a pilot RFID project at one of its supermarkets in

Rheinberg, Germany, begun last year.




65


Market trigger: Target, 20 February 2004

 BREAKING NEWS: In a letter from CIO Paul Singer, the 4th largest retailer announced plans to require all suppliers to use RFID across all product by Spring 2007

“Top Suppliers” required to tag all pallets and cases, shipped to select regional DC’s by late Spring

2005.

Goal is for all suppliers to be using tags by Spring 2007

Top Suppliers not defined publicly

– probably similar to Wal-Mart’s top 100

No indication yet if the mandate include only stores operated under the Target banner

Suppliers required to use UHF tags based on the EPC Class 0 and Class 1 protocols. The company expects to move to EPC Class 1 Gen 2 when tags and readers based on this specification become widely available

 Target Messages:

Very much taking a learning approach. Already in pilot with a few key suppliers, and intent is to share learnings with suppliers later in 2004

RFID views as a complement to barcode and EDI technologies, and Target is supporting a migration approach. Current carton marking requirements for shipping containers will remain unchanged.

Target recognize and supports the efficiencies of common technology standards for RFID for both retailers and vendors.



Market trigger: Albertsons, 5 March 2004

 In another significant boost for RFID deployment in the United States, Albertsons, the nation’s second largest food and drug retailer, has launched its first RFID pilot and announced that it will require its top 100 suppliers to tag palettes and cartons by April 2005. The pilot, which the retailer is carrying out with select partners, involves the tagging of pallets and cases of products.

 Albertsons says that it expects its top 100 suppliers to tagging their shipments to the company at the case and pallet level. Albertsons’ deadline, however, is not until April 2005, three months after

WalMart’s January deadline.

 According to Bob Dunst, executive vice president and chief technology officer at Albertsons, the company believes its RFID deployment will improve what it calls its consumer demand chain management by enabling the company to instantly locate products as they flow through its supply chain.

 Although Albertsons would not provide much detail about its plans going forward, the company said the announcement about its pilot and deadline was a way to signal to its suppliers and customers that RFID is part of its future strategy.

 The company gave few details about its RFID pilot other than that it covers just one of its many project categories and that it expects it to be expanded to other categories as the trial continues.

Details of the pilot and the companies involved could be made available later in the second quarter, according to a company spokesperson. The company also said it expects to hold a briefing for the suppliers its expects to meet its tagging deadline.



Questions & Answers

Faye Holland

IBM WW RFID Solution Leader

Pervasive / Wireless e-business

EBO

Home office: (44) 1638 742335

Mobile: (44) 7740 740839

Email: fholla@uk.ibm.com

Lotus ID: Faye Holland/UK/IBM

Mail point: 31NA – Bedfont Lakes, Middlesex

UNITED KINGDOM


IBM RFID Executive Presentation

IBM RFID Executive Overview

Contents

Building an effective RFID enabled business solution requires a fundamental understanding of the technology

RFID Basics

Examples of RFID tags from different vendors

EPC Tag Classes

Tag Frequency

RFID Reader Technologies

Examples of RFID readers from different vendors

RFID –purchasing curve

World Wide Challenges for RFID

Standards

Tags

Frequency

All Evolving

RFID tags are the next step after barcodes

Electronic Product Code (EPC™) Vision: pen standards for pervasive product tagging

The sponsors of EPCglobal are come from multiple industries and geographies

EPCglobal – commercializing the Electronic Product Code

RFID Standards

RFID is an On Demand Technology

Contents

Significant market opportunity exists, with the IBM opportunity representing $3.1B by 2008

RFID WW IBM Addressable market opportunity differs by Geo; several drivers explain the growth

Market Drivers

Market Inhibitors

Achieving an RFID-enabled supply chain will take some time

Lessons Learned - RFID Business Cases

Lessons Learned - Pilots

RFID discussions start about compliance and quickly move toward how to take transformation solutions to customers

Developing an RFID strategy

Contents

The strengths of IBM

IBM business unit overview

RFID relates to selfidentifying “Smart Objects”, while other smart chip applications relate to smart machines and consumer-initiated transactions

The IBM Point of View

IBM’s Strategic Direction in RFID

Forrester: “RFID Middleware Vendor Profile: IBM "

The AMR Research Risk Assessment Profile lists IBM Global

Services as the Leading Service Provider for RFID Deployments

The AMR Research Risk Assessment Profile lists IBM Global

Services as the Leading Service Provider for RFID Deployments

IDC Leadership Grid: WW RFID Services Market

IBM laboratories worldwide - 3 IBM RFID Test

Centres

IBM’s world class RFID test lab objectives

IBM’s RFID organization

IBM Investments in Solution Development

IBM RFID Solutions Architecture Investment

The End-to-End Component Model is split into specific domains to contain the architecturally significant groups of components

IBM plays in many areas of the value chain and partners to provide an end-to-end solution

The Partnering Strategy Maps to the RFID Solution Domains

IBM RFID Software Solution Architecture

We advise the execution of integrated and concurrent work streams to accelerate our client’s RFID readiness

To assist in tailoring a client solution, the following business adoption questions need to be reviewed

IBM can also help our clients understand where they fit in the RFID Offering Framework

IBM has a breadth and depth of RFID offerings to help our customers understand and implement RFID solutions based upon business processes and business objectives.

Achieving the Vision

Industry-Focused RFID Initiatives

Contents

RFID across industry sectors

Examples of RFID applications in all industries

The RFID solution cluster is defined by five market spaces

Each market space addresses specific customer needs

Traceability

Sample Customer Experiences

What does IBM stand for?

Market trigger: Wal-Mart expands RFID mandate to include all suppliers by 2006

Market trigger: U.S. DoD will require suppliers to use active and passive RFID technology by 2005

Market trigger: Tesco RFID announcement: IGD Retail

Logistics Summit (London) – 6/11/03

Market trigger: Metro Store Announcement: NRF, Jan 04

Market trigger: Target, 20 February 2004

Market trigger: Albertsons, 5 March 2004

Questions & Answers

Pervasive / Wireless e-business

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