Pervasive / Wireless e-business
IBM RFID Solutions
IT Solutions for Business Value
Jean-Michel Corrieu
IBM Europe, Pervasive/Wireless e-Business Technical Sales Manager
May 25th
What is Wireless Computing
“A billion people will interact with
a million e-businesses via a
trillion intelligent interconnected
devices”
– Louis V Gerstner, Jr., 1999
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e-business on demand
Any device
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e-business on demand
e-BSC La Gaude
What makes RFID relevant now?

After decades of technology refinement these radio tags have now
become very small and inexpensive

A great deal of innovation has brought us to the point where the silicon
core of an radio tag is now 0.4mm

The antenna can be printed onto a product’s packaging at time of
manufacture

Currently radio tags can be purchased for less that €0.25 in quantity.
=> RFID is small enough, fast enough, and cheap enough to do
real work with today.
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Corporation
2003
2004IBM
IBM
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e-BSC La Gaude
RFID enables End to end IT Solutions
(Auto ID drawing)
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ONS
Server
Internet
Product
Information
(PML Format)
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Antenna
Write data
to RF tags
Items with
RF Tags
1
2
RF
Read
Manager
Reader
Antenna
3
4
5
Transaction
Data Store
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Application
Systems
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7
Tag/Item
Relationship
Database
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5
5
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EDI /
XML
Trading
Partner
Systems
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Corporation
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IBM
Corporation
e-BSC La Gaude
Progressing…… but still not perfect
 Does not work well if the tagged object is made of RF opaque material like
metals, several type of liquids, carbon
 RF can penetrate only up to a limited depth of a material. So it may be
impossible to read all the case tags of a pallet, even if the cases are made of
RF-friendly materials
 The number of tags that can be simultaneously read/written is limited to about
50 – 100 / second
 The following environmental factors can hamper proper reading:
-
-
Speed with which the object is moving
Human bodies (composed largely of water)
Presence of RF interference, moisture and metals
 Tag technology is not mature, intensive research is being conducted both at the
theoretical (e.g., antenna design) and manufacturing (e.g., material used,
processing techniques)
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Pervasive / Wireless e-business
RFID: an ENABLER for Business Value
 Measurable impact to labor costs
 Real reduction in errors via automation – reduction in
mis-shipments, lost inventory, and errors in redundant
data reads
 Real gains in productivity by better managing the use of
skilled resources through automation
 Industry recognized qualitative impacts which returns
improved customer service, lessened warrantee
handling,
 Driving regulatory impacts through compliance
activities to meet governmental regulations
 Automated POS means skilled resources are in front of
your customers – and not behind a cash register
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Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
Aligning RFID to business strategy is dependant on
the forces that are driving change - multiple factors
influence how a particular company might view RFID
TRANSFORMATION
High
Opportunities & Benefits
OPTIMIZATION
COMPLIANCE
 Meet minimum requirement
(e.g. DoD, Walmart)
 Replace or supplement
existing barcode
systems/applications
 Increase accuracy and
decrease error rates of
existing applications
(inventory management, etc.)
Low
Low
 Increase throughput
 Reduce labor requirements
 Enable Warehouse
Management
 Enable JIT
manufacturing/logistics
 Enable real time decision
support
 Provide internal track/trace of
goods/people
 Automate and speed
processes (e.g. cross
docking)
Complexity
 Transform
operating/business models
 Enable new sources of
revenue
 Enable collaboration with
external clients/suppliers
 Maintain item historical
records (where it has been
and what it has been
through)
 Track/Trace goods
throughout the value chain
both internally and externally
High
Source: IBM Business Consulting Services analysis
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Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
Developing an RFID strategy – Looking for BUSINESS VALUE
Strategic
Financial
 How can RFID enable our overall strategic
vision?
 What is the expected return on our RFID
investment?
 Should we be a leader or a “fast follower”?
 What specific RFID applications can drive
value for us?
 Which trading partners should I pilot with
and when?
 How will we operate in a world of dual
processes? And for how long?
 What is a realistic adoption pattern/rate of
RFID and how will that impact my business
case?
Organizational
Technological
 What are the change management
implications?
 What are our technology requirements for
an RFID implementation?
 What are the risks involved in an RFID
implementation?
 What is the architecture that best delivers
on my strategic technology plan?
 How will an RFID implementation impact
our current applications?
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Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Business Value
Innovative
business designs
that sharpen focus
and accelerate
growth
On Demand
Operating
Environment
Business
Business
Transformation
Transformation
An IT operating
environment
optimized for
flexibility and
resilience
Integrated, end-to-end business
processes that are built to change
Based on real customer cases with
real business processes
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e-business on demand
Extending On Demand e-business systems
Securely connecting the Physical Plant / Operational Environment to
the IT / Business environment to allow customers to aggregate,
analyze and act upon data to dynamically adjust operations in
response to changes in their business environment
Aggregate
On Demand
Infrastructure
Analyze
Physical
Environment
Act
Enable operational control systems to be integrated with Business Knowledge in IT
Systems, using open standards-based, Next Generation Pervasive Technologies
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This IBM Statement of Direction, while subject to change, is intended to describe our planned product line in the RFID space, based upon market trends and IBM’s perceived customer needs.
RFID Across All Sectors
Pervasive / Wireless e-business
RFID across industry sectors
Industrial
Healthcare
Retail/CPG
Government
Logistics
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Emerging Markets – Pervasive/ Wireless EBO
Field Service
© 2004 IBM Corporation
Pervasive / Wireless e-business
IBM’s Divisions Supporting RFID
Industry (S&D, BCS)
RFID Focussed
IGS
Consulting
Services RFID
Trained
SWG
Tech
Group
Systems
Group
Software Group
• Solution Development
• Alliances
Sensors &
Actuators
Personal
Systems
Group
 Software Development
 Alliances
 Standards Bodies
WW RFID Focused
Community
Pervasive/
Wireless EBO
Research
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Strategy
Solution Development
Thought Leadership  Alliances
Standards Bodies
FOAK
Solution Development
IBM has a matrix, non-hierarchical teaming approach to RFID
Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
IBM’s View – RFID will deliver value in the context of
current mission critical business processes
Partner Performance
VMI/SMI
CPFR/ SC Collabor
Production Planning
SC Execution
Asset Mgmnt
SC Event Mgmnt
Warehouse Mgmnt
Order Management
Trans. Logistics
Security
Shrink Mgmnt
Track & Trace
Counterfeiting
CRM
Promotion Mgmnt
Assortment MgMnt
Price Optimization
Targetted Marketing
Websphere Business Process Modeling / Workflow
Websphere
Integration
Websphere
BusinessBusiness
Integration
For Collaboration
DB2
Db2 Integrator
Item Master File
Internal Catalog / PIM/PML
RFID Edge Server
Reader
Reader
RFID Edge Server
Reader
Auto-ID
Tags
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Directory
RFID Middleware Server
Emerging Markets – Pervasive/ Wireless EBO
Reader
Reader
Reader
WBC Gateway
Order Mgmnt System
Auto-ID
Enablement
Communication
& Connectivity
Management
Process
Integration
Architecture
Partner Collaboration
Business
Process
Pilot
Definition
Partners Exchanges
SC Planning
Strategy
Assessment
Registry External Catalog
/ONS
/Data Pool/PML
External Data
Acquisition
Business
Case
WPS Portal
Strategy
Services
© 2004 IBM Corporation
Pervasive / Wireless e-business
IBM laboratories worldwide - 8 research centers focused
on RFID advanced learnings, 3 testing labs
Almaden
Yorktown
Zurich
ISL Hawthorne
ISL Zurich
Beijing
IBM RFID Testing Labs
Gaithersburg
La Gaude
Austin
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Emerging Markets – Pervasive/ Wireless EBO
Haifa
Delhi
Tokyo
© 2004 IBM Corporation
Pervasive / Wireless e-business
Customer Reference: Supply Chain: IBM Fishkill Plant
Challenge
Solution
Benefits
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• $2.5B Corporate 'from scratch' investment in 300mm Manufacturing and Development. Fishkill
then made the decision to use RFID after assessing barcode and infra red systems. The 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 ($1K
per container holding goods worth ~$2M). Their challenge was to create a real time, common
container tracking system
• 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
• IBM software is used to create and write the ID to all new containers
• The contents of the container, wafer or recepticle, are associated with the ID in the Factory
Control System's DB2 database
• The transponder is read at every processing step to validate that the correct container and
material are going to the correct process tool result
• Fabs moved from infrared systems to RFID allowing real-time vs. point to point tracking of wafer
containers (on average 25 wafers in each container) providing true track/trace capability
• RFID enabled increased efficiency, decreased error rates, and reduced labor requirements
• RFID systems facilitated prioritization of orders, processing of specialty orders, and order routing
during retooling or maintenance accelerating time to market
• RFID has enabled IBM’s 300mm fab to run with 60 to 70 people compared with an industry average of
100 to 120, allowing IBM to add value to its products without necessarily adding cost
• With automation enabled by RFID, IBM is able to run the plant with skeleton crew when normally they
would shut it down (e.g. holidays)
Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
Customer Reference: Supply Chain: Metro Group
Challenge
Solution
Benefits
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 The Metro Group Initiative has been up and running since April 28, 2003. The
initiative helps Metro 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.
 IBM in collaboration with Intel and SAP have been involved in technology
selection and implementation.
 Metro has decreased misorders and lost inventory due to accurate visibility of inventory
from the distribution centre to the retail store
 Real-time tracking of retail store inventory helps Metro order new inventory on-demand,
reducing “OOS” (out of stock) situations
 POS checkout locations are monitored and staff added during peak hours to avoid
customer bottlenecks
 Customers have instant access to information about products from kiosks located
through the store, improving customer satisfaction
 Dr. Gerd Wolfram, Executive Project Manager, Metro Group Future Store of the Future
says “The tremendous success of the Metro 'Future Store Initiative' is also driven by
IBM's contribution to this innovative project. In particular IBM developed a RFID
Middleware and integrated a complex RFID solution with multiple functions on pallet,
case and shelf level."
Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
Customer Reference: Supply Chain: Philips Semiconductors
Challenge
Solution
Benefits
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• The objective of the project was to help Philips increase inventory turns. The project provides
near real-time inventory visibility to the Philips Semiconductors business units. It will also enable
changes to policies in production and inventory planning systems which will, in turn, drive
increased inventory turns
• The project is initially between the Philips Semiconductors Kaohsiung (PSK) site and the
Regional Distribution Center Hong Kong (RDC HK) on all packaged quantities and boxes, all
customer direct ships (cartons) in AP from the PSK location, all cartons sent from the RDC HK to
all destinations and for EXEL (3PL) all outbound flows in Hong Kong
• IBM provided an end-to-end solution that encompasses:
• Services to support Philips Semiconductors in the STAR proof of concept project approach will be
delivered during the following project phases (total duration 30 weeks), in particular:
•Vendor selection
•Design and validation
•Construction and testing
•Targeted launch
•Evaluation
• Intellectual property services components; IBM proprietary radio frequency identification (RFID)
framework and documentation
•IBM software licences:
•DB2 UDB Enterprise Edition (including one year maintenance)
•2 Websphere studio application developers for the proof of concept (including one year
maintenance)
 This project will help PSC to further optimize its supply chain and is another step in the route to
become an on demand company. The savings will be used to reinvest in competitive advantage and
growth.
Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
Customer Reference: Supply Chain: US Department of Defense
Challenge
Challenge
Solution
Benefits
Benefits
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 The U.S. Department of Defense is dedicated to becoming an early adopter of
Radio Frequency Identification (RFID) technology. The DoD is currently preparing
to read RFID tags at key sites within their supply chain. Beginning January 1, 2005,
the Department of Defense has mandated that all suppliers place passive RFID
tags at the case, pallet, and Defense Department Unique Identifier (UID) item
packing level.
IBM is working with the Department of Defense to:
–Develop test pilot milestones and manage test pilot requirements
–Create project metrics and reporting
–Build a business case analysis of the overall RFID implementation
–Monitor implementation issues and resolution
–Assist in the development and release of RFID business rules
–Establish commercial best practices
–Provide Subject Matter Experts to develop the short term and long term
implementation plan
IBM seen as trusted brand for US DoD
Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
Customer Reference: Supply Chain: Sara Lee
Challenge
Challenge
 Major field trial in RFID USA
 Step 1 pilot at one DC in compliance with Wal-Mart Mandate
 Integrated to WMS
 Step 2 roll-out in 2004 to more DCs (5 to 30)
Solution
Benefits
IBM chosen as RFID System Integrator and RFID Software Infrastructure and Applications
Provider
Solution uses Alien UHF tags and readers and Zebra and Printronix printers
Different RFID Use Cases
RFID Picking/Labelling
RFID Goods Outbound
Order verification at case level
Load verification
Benefits
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Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
In Short, How do we Help Companies :
Deliver Business Value
Focus on key industries
Develop end-to-end solutions
Provide Consulting, Integration and Professional
Services
Leverage IBM and non IBM Components
Build a strong RFID ecosystem of Partners
Support and drive open standards
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Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
IBM: a leader in mobile and wireless computing
“IBM ranks first among the enablers of
enterprise mobile computing solutions”
A mid-2002 IDC report shows IBM and
PwCC Wireless jointly have close to a
30% market share, and when
combined, are over 5 times the nearest
competitors.
“IBM also boasts the most successful
professional services business (IBM
Global Services) in the mobile computing
space”
“IBM Global Services (IGS) is by far the
leading provider of mobile and wireless
professional services. One could be
shocked by seeing how far ahead IGS is”
The Yankee Group ranked IBM # 1 in
March 2003
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Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation
Pervasive / Wireless e-business
AMR Recent assessment of IBM
 January 2004 release with Metro on Store of the Future and IBM's
involvement
 IBM--The overall systems integrator on the project, IBM is providing
strategic direction, consulting, and implementation expertise. It will
also establish an RFID lab in Germany to test supplier
interoperability in all stages of the initiative.
 The Takeaway: IBM is emerging as the leader in RFID
integration and consulting services.
 http://www.amrresearch.com/Content/view.asp?pmillid=16933
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Emerging Markets – Pervasive/ Wireless EBO
© 2004 IBM Corporation