ΟΙΚΟΝΟΜΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ
ΤΜΗΜΑ ΔΙΟΙΚΗΤΙΚΗΣ ΕΠΙΣΤΗΜΗΣ ΚΑΙ ΤΕΧΝΟΛΟΓΙΑΣ
www.eltrun.gr
Evaluating the impact of RFID on
warehouse process performance
Angeliki Karagiannaki
ELTRUN, Dept. of Management Science and Technology
ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS
29/03/2011
RFID IN EUROPE - ACADEMIC WORKSHOP
RFID technology in
supply chain processes
• Process-driven value
– Physical flow process integrationprocess redesign
– Object-connected ICT: the
information is physically linked to the
products (CASAGRAS, 2009)
RFID
reader
RFID
tags
chip
antenn
a
RFID
technology
Integration
with Processes
Process
performance
General research scope: PROCESS-DRIVEN VALUE OF RFID
What is the impact of RFID and its subsequent changes in processes on process
performance?
2
Research Approach
MOTIVATION- PROBLEM DEFINITION
Approach: Literature Review
EXPLORATORY Phase
Approach: Case Study
HYPOTHESES GENERATING
Form
Research
Objective
CONFIRMATORY Phase
Approach: Experimental Simulation
HYPOTHESES TESTING
3PL warehouse
Manufacturing
Facility
Retail Distribution
Center
RFID-enabled
process redesign:
a reference
framework
Refined Research
Questions
Simulation model
on process-driven
value of RFID
RFID Assessment
between the as-is
vs. to-be processes
Factors affecting
the impact of
RFID
3
Case 1: a 3PL Warehouse
•
Background
–
–
–
–
•
03/2006- 01/2007
3PL company that deals with paper trading
a manual warehouse system with “some”
computer control
the warehouse consists of a number of parallel
aisles with paper rolls stored alongsides and
are piled one on top of the other
Outcomes
–
–
Simulation model of receiving, storage, picking
and shipping processes
Evaluation of the impact of RFID due to
automation in terms of Time savings & Labor
utilisation
Measurement
AS-IS
model
RFIDenabled
model
Comparison Result
% utilisation of scanning labor
9.60%
2.48%
Reduced 74%
% utilisation of storing/picking labor
19%
17.17%
Reduced 9.6%
% utilisation of unloading/loading labor
3.19%
2.48%
Reduced 22.5%
Average time waiting for storing
27.72
26.55
Reduced 4.22%
Average time waiting for scanning
0.21
0.06
Reduced 71.4%
Average time waiting for loading
12.56
11.86
Reduced 5.58%
4
Case 2: Manufacturing Facility
•
Background
–
–
–
•
01/2007- 07/2008
a leading food company in Greece
(more than 30% of market share)
and one of the largest in Europethe Frozen Foods Division
a project partly funded by the
General Secretariat for Research &
Technology, Ministry of
Development of the Hellenic
Republic
Outcomes
–
–
Requirements’ analysis, development and pilot
implementation of a RFID-enabled traceability
system within the central warehouse
Cost-benefit assessment of the proposed RFID
system
5
Case 3: a Retail Distribution Center
•
Background
–
–
–
•
07/2009- 10/2010
a retail distribution center of one of the biggest supermarket chains in Greece.
a typical retail distribution center that stores a wide variety of products until needed by the
retail location
Data Collection
–
–
–
•
On-site observations in the research sites regarding the current production flow, process
operations, processing times, resources and facility layout
Semi-structured interviews in the three research sites with managers and operational personnel
Official records retrieved from enterprise system
Outcomes
–
–
A more generic simulation model of
receiving, storage, picking and shipping
processes
Test various RFID implementations
6
Factors affecting RFID implementation
Factor
Description
RFID Tagging Level
represents what objects are being passed through
the RFID enabled processes
RFID Tagging Process represents who has the responsibility to attach the
RFID tags to the objects
Responsibility
7
Alternative RFID implementations
RFID IMPLEMENTATION 1
Process A
(Receiving)
Functional
NEW Process
level (RFID
LABELING)
Process C
Process B
(Put-away)
Put-away +(Picking)
Picking
…is not
RFID
Tagging Level
Cases
RFID Tagging Responsibility
In-house
supported
by RFID…
+
Process D
(Shipping)
Shipping
RFID IMPLEMENTATION 2
Process A
(Receiving)
Functional level
RFID Tagging Level
RFID Tagging Responsibility
8
Process B
(Put-away)
…is not
supported
by
RFID…
Process C
(Picking)
Receiving + Shipping
Pallets
…is not
supported
by RFID…
Out-source
Process D
(Shipping)
Numerous Alternative RFID Implementations
• Numerous possible ways that the processes can be shaped
– Different implementation  different value of RFID
– no clear cut answer as to which RFID implementation is the
best
• Discrete Event Simulation as a decision support tool
– design differently configured to-be implementations and
– decide on a specific one based on a credible evaluation of
the alternatives
9
Experimental Design
Tagging
Level
Tagging
Responsibility
In-house
By all the
suppliers
By the large
suppliers
By the large
suppliers &
In-house
Pallets
Experiment 1
Experiment 3
Experiment 5
Experiment 7
Cases
Experiment 2
Experiment 4
Experiment 6
Experiment 8
10
A Retail DC simulation model
(SIMUL8 software)
11
Simulation Study Steps
•
•
•
•
•
Process modelling
Level of detail
On-site Observation
Retrieving data from official records
Model validation
12
Model validation
• Independent T test using SPSS software
• Test the null hypothesis that the distribution of the outputs is the same
across categories of simulated and real data
• Outputs
– no. of orders per day, no. of pallets receiving for each supplier
• Validation with the managers
13
Output Analysis
•
Run (8 to-be & 1 as-is) Simulation Experiments in the Simul8 Software
– For each experiment, the simulation runs with 30 replications to eliminate the
effects of random variants with:
• Warm-Up Period (20 days=4 weeks)
– Time-series method
– Welch method
• Run-length (70 days=14 weeks)
– Robinson (1995) graphical method
•
Using the outputs of the experiments, run a two-factor multivariate analysis of
variance (MANOVA) in the SPSS software
– Independent variables
• tagging level
• tagging responsibility
– Dependent variables
• labor utilization
– receiving, storage, picking, shipping, overall
• time savings
– average queuing time for unloading, scanning, checking-in, storing, checking-out picking time
and overall
14
Hypothesis H1 Testing
RFID effect on Labor Utilisation
Hypothesis H1: “The integration of RFID in warehouse processes has a positive effect on process
performance in terms of labor utilisation. This effect varies depending on tagging level and who has
the tagging responsibility.”
Tagging Level
Tagging Responsibility
100.00
100.00
80.00
60.00
40.00
20.00
0.00
80.00
60.00
40.00
AS-IS
20.00
0.00
AS-IS
Pallets
Labor Utilization
Cases
tagging tagging tagging tagging
inhouse by all the by the inhouse &
suppliers large
by the
suppliers large
suppliers
Labor Utilization
15
Hypothesis H2 Testing
RFID effect on Time Savings
Hypothesis H2: “The integration of RFID in warehouse processes has a positive effect on process
performance in terms of time savings. This effect varies depending on tagging level and who has the
tagging responsibility.”
Tagging Level
Tagging Responsibility
7.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
6.00
5.00
4.00
3.00
AS-IS
2.00
1.00
0.00
AS-IS
Pallets
Time Savings
Cases
tagging tagging tagging tagging
inhouse by all the by the inhouse
suppliers large & by the
suppliers large
suppliers
Time Savings
16
Tagging Level*Tagging Responsibility
Labor Utilization
Labor Utilisation
80.00
As-is
70.00
60.00
50.00
Experiment1
Experiment 5
Experiment7
Experiment3
40.00
as-is
Experiment2
Experiment6
Experiment8
30.00
Experiment4
tagging inhouse
tagging by all the
suppliers
20.00
tagging by the large
suppliers
10.00
tagging inhouse & by
the large suppliers
0.00
pallets
cases
17
Conclusions
• RFID deployment within warehouse processes pays off the
investment
– numerous RFID implementations
– each RFID implementation has different value
• Understand the linkages between RFID assessment and
simulation for:
– evaluating RFID implementations in terms of processdriven savings (labor hours, processing times, etc.)
18
Publications (1)
Journals
•
Chryssochoidis, G., A. Karagiannaki, K. Pramatari, O. Kehagia (2009). A cost-benefit evaluation framework
of an electronic-based traceability system, British Food Journal, 111(6)
•
Karagiannaki, A. Papakyriakopoulos, D. and Bardaki, C. A framework for identifying RFID-enabled
warehouse settings, Submitted to Industrial Management and Data Systems (IMDS) – to be published 30Jun-2011, vol:111, iss:5
•
Karagiannaki, A., I. Mourtos and K. Pramatari. Measuring the impact of RFID on process performance
metrics: a simulation study of the warehouse environment, Submitted to International Journal of
Production Economics
•
Karagiannaki, A., Pramatari, K. and Doukidis, G.J. Decision Support for the Design of RFID implementations:
Toward a Simulation Framework, Submitted to Journal of the Operational Research Society (JORS) – 1st
revision
•
Karagiannaki, A. and Pramatari, K. The interaction effects of RFID tagging level and tagging responsibility
on warehouse process performance, Submitted to the special issue: “Interdisciplinary Research in
Operations Management” , International Journal of Production Economics
Book Chapters
•
Karagiannaki,A., C. Bardaki and K. Pramatari. “RFID and its role in food supply chain” in the book entitled:
“Delivering performance in food supply chains”, Woodhead Publishing (forthcoming)
•
Karagiannaki,A. and K. Pramatari. “Leveraging RFID-enabled Traceability for the Food Industry: a case
study” in the book entitled “Intelligent Agrifood Chains and Networks: Current Status, Future Trends &
Real-life Cases” (forthcoming)
•
Andriana Dimakopoulou, Katerina Pramatari, Angeliki Karagiannaki, George Papadopoulos, Antonis
Paraskevopoulos. “Investment evaluation of RFID technology applications: An evolution perspective” in
the book entitled "Unique Radio Innovation for the 21st Century: Building Scalable and Global RFID
Networks“(forthcoming)
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Publications (2)
Conferences
•
Karagiannaki, A., Pramatari, K. and Doukidis, G.J. (2010). Using simulation to design & evaluate RFID implementations in the
supply chain, In the Proceedings of the Operational Research Society Simulation Workshop 2010 (sw10), 23-24 March,
Worcestershire, England
•
Panousis, K. and A. Karagiannaki (2009). Quantifying RFID-Enabled Traceability for the Food Industry: a Case Study. In the
Proceedings of the 4th Mediterranean Conference on Information Systems (MCIS), September 25-27, Athens, Greece
•
Karagiannaki, A. and M. Kehagia (2009). Modeling the Warehouse Operations to Quantify the Value of RFID. In the Proceedings
of the 4th Mediterranean Conference on Information Systems (MCIS), September 25-27, Athens, Greece
•
Karagiannaki, A. and K. Pramatari (2008). Towards a framework for simulating the impact of RFID on different warehouse
settings, In the Proceedings of the 15th International Annual EurOMA Conference, June 15-18, Groningen, the Netherlands
•
Karagiannaki, A. and K. Pramatari (2008). “The impact of RFID on different levels of packaging for streamlining the warehouse
operations”. In the Proceedings of the 1st Panhellenic Packaging Convention of Food & Drinks, March 17-18, Athens, Greece
(best-paper award)
•
Bardaki,C., A. Karagiannaki and K. Pramatari (2008). A Systematic Approach for the Design of RFID Implementations in the
Supply Chain. In the Proceedings of the Panhellenic Conference on Informatics (PCI 2008), August 28-30, Samos, Greece
•
Karagiannaki, A. and K. Pramatari (2008). Leveraging Traceability using RFID technology: a case study. In the Proceedings of the
Department of Management Science & Technology (DMST) 5th Conference, May 8, Athens, Greece
•
Karagiannaki, A., I. Mourtos and K. Pramatari (2007). Simulating and Evaluating the Impact of RFID on Warehousing Operations:
a case study. In the Proceedings of the Summer Computer Simulation Conference (SCSC), July 15-18, San Diego, CA
•
Bardaki, C., A. Karagiannaki, K. Pramatari (2007). A RFID-enabled Supply Chain Traceability System for The Food Industry. In the
Proceedings of TRACE 3rd Annual Meeting, April 26-27, Crete, Greece
•
Karagiannaki, A. and L. Oakshott (2006). Simulation for Facility Layout Redesign. In the Proceedings of the 20th European
Conference on Modelling and Simulation (ECMS), May 28-31, Bonn, Sankt Augustin, Germany
•
Karagiannaki, A., I. Mourtos and K. Pramatari (2006). Evaluating the impact of RFID in supply chain operations by using
simulation: A review. In the Proceedings of the Department of Management Science & Technology (DMST) 3rd Conference,
May 10, Athens, Greece
•
Bardaki, C., A. Karagiannaki, K. C. Pramatari, and I. Mourtos (2006). RFID technology: Simulating the impact on supply chain and
demand in retail industry. In the Proceedings of the 21st European Conference in Operational Research (EURO XXI 2006), June
2-5, Reykjavik, Iceland
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Thank you for your attention!
Questions
21