EPC
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Delivering Value Through Global Standards Patrick Javick EPCglobal North America October 2007 Overview • • • • • • About EPCglobal The Need for Global Standards Current Standards Tangible Results Case Studies Summary 2006 EPCglobal Inc Introduction GS1 Global Support: • Standards • Frequency Allocation • Multi-Industry Local Support: • 109 Member Organizations • Training & Services • Localized Guidelines • Trading Partner and Regulatory 2006 EPCglobal Inc EPCglobal Overview Role and Scope Established Neutral, not-for-profit organization owned by GS1 Support Network 109 worldwide offices Mission Commercialization of RFID technologies through global technical, application, and business process standards Reduce the risks and costs of implementation through adoption tools and services Guiding Principals Driven by committed companies and supply chains By industry, for industry” is crucial success factor Must support “supply chain convergence” Subscribers 1,000+ global firms with $6 trillion in revenues from 51 market segments fielding 3,000 participants Board Member Firms Cisco Gillette Johnson & Johnson Procter & Gamble Lockheed Martin Dow Chemicals 2006 EPCglobal Inc DHL Hewlett-Packard Metro Group Wal*Mart Sony US DOD Core Consumer Markets Retail 2006 EPCglobal Inc Consumer Goods Food & Beverage Healthcare & Life Sciences Electronics & High Tech Logistics & Transport Growth Through New Industries Aerospace & Defense 2006 EPCglobal Inc Chemical Industrial Footwear & Apparel Automotive Overview • • • • • • About EPCglobal The Need for Global Standards Current Standards Tangible Results Case Studies Summary 2006 EPCglobal Inc RFID drivers Higher Quality Tracking Traceability Increased Outcome Control Automation Increased Visibility Reduce Cost New Service Generate Value Increase Security Authentication Fulfill Requirements Law New Product Feature CRM 2006 EPCglobal Inc Mandate © Stephane Pique Why are global standards important? • Reduce complexity – Within organizations – Between organizations – For H/W and S/W production and purchase decisions • Reduce cost – Implementation – H/W, S/W and Integration • Facilitate trading partner collaboration • Allow organizations to focus more on how to use the information than how to get information 2006 EPCglobal Inc Supply chain visibility • Potential to transform business process – bar code replacement alone will not deliver ROI • The power of event related information – Improved customer availability – Demand driven supply chain – Reduced inventory – Reduced counterfeit – Improved ability to track and trace – Shrinkage – Returnable Assets • Transformation of commercial relationships 2006 EPCglobal Inc Global Standards & Competitive Advantage The Case Study of Motorola vs Nokia Time Division Multiplex Access Personal Communication Systems Code Division Multiplex Access Global System for Mobiles • Three competing standards in U.S. • Global System for Mobiles 90% of world outside of North America • Motorola must focus valuable engineering resources on supporting multiple standards • Single standard allows Nokia to focus engineering on value-added functionality • Motorola loses its early dominance in cell phone market • Nokia takes dominant position in today’s mobility market Standards allow technology providers to focus on innovation, not translation and intermediation 2006 EPCglobal Inc Global Standards & Supply Chain Convergence The manufacturers perspective: An apparel manufactures sells warm-up track suits to multiple retailers • How can the apparel be identified in one common way to meet multiple market needs without segregating inventories? Solution: EPCglobal Tag Data Standard 2006 EPCglobal Inc Global Standards & Supply Chain Convergence The retailers perspective: A retailer has inbound warm-up track suits, DVD’s, food & beverage, and household items. They need one system that will handle everything from receiving to point of sale. How can a retailer purchase from many industries and use a common point of sale? Solution: GS1 Standards 2006 EPCglobal Inc Overview • • • • • • About EPCglobal The Need for Global Standards Current Standards Tangible Results Case Studies Summary 2006 EPCglobal Inc The EPCglobal Community Pulling diverse organizations together End Users Manufacturers Public Policy Distributors Trade Organizations Retail Other Technical Standards Regulatory Bodies Frequency Compliance Public Health Requirements Industry Guidelines Industry Regulations Technology Vendors Software Vendors Hardware Vendors 2006 EPCglobal Inc Consultancies Education Programs Rapid progress continues • 11 ratified global standards • Network and security standards (supported by Architectural Review Committee Guidelines) • Item level tagging - UHF and HF work groups – Other tag types to follow (EPCglobal is tag “neutral”) • Certification services - confident technology use 2006 EPCglobal Inc Electronic Product Code (EPC) GTIN 1 2 3 4 5 6 7 1 3 1 2 3 4 5 6 3 4 5 6 5 8 Trade Item Reference Company Prefix EPC 2 7 1 EPC Manager Number 2 3 4 Trade Item Reference GTIN The EPC can only be interpreted in combination with the corresponding data base 2006 EPCglobal Inc 0000000123456 Serial Number EPCglobal Network Architecture The Foundation of “Actionable Intelligence” If you can’t see it, you can’t measure it If you can’t measure it, you can’t control it If you can’t control it, its probably costing you too much money…. And you probably don’t even don’t know how much 2006 EPCglobal Inc Work items of EPCglobal Secure Internet Exchange Event Registries ONS Search & Discovery available under development EPC IS Internal Systems ERP, WMS, etc. Enterprise System 2006 EPCglobal Inc Authentication & Authorization EPC IS EPC MW EPC MW EPC Reader EPC Reader EPC Tags EPC Tags Internal Systems ERP, WMS, etc. Enterprise System Overview • • • • • About EPCglobal The Need for Global Standards Current Standards Tangible Results Case Studies • Summary 2006 EPCglobal Inc Tangible Examples – Electronic proof of delivery • Avoiding waste of resources. • EPC data was able to refute received amount 80% of occasions – Department of Defense • Reduced order backlog form 92k to 11k orders • $1.7bn ROI over 7 years • Improving “confidence” in the supply chain – Baggage tracking • Improving control and accuracy • 99% read rate helping to solve a $1.6bn problem (Significant transport and logistics project now starting) 2006 EPCglobal Inc Tangible Examples – Apparel • Improving customer availability • 20% improvement in accuracy (size and colors) – Prompt movement of promotional items to sales floor • Retailer 19% sales lift • Supplier 26% sales increase 2006 EPCglobal Inc Tangible Examples • RFID on Tap - WIRELESS LIQUOR INVENTORY MANAGEMENT – According to hospitality industry experts, every year in the United States, over $7 billion is lost due to “liquor shrinkage.” – 100% return on investment over 1.5 years – Piloted by Outback Steak in Miami 2006 EPCglobal Inc Overview • • • • • • About EPCglobal The Need for Global Standards Current Standards Tangible Results Case Studies Summary 2006 EPCglobal Inc Business Case examples – Metro • Process efficiency - 12% to 17% (incoming merchandise & shelving) • Loss/theft - 11% to 18% (depends on category) • Goods availability - 9% to 14% (reduction OOS) • Incoming goods - € 8.5mio (German est. only) – Lemmi Fashion (SME – 1 mio garments per year) • Stock turnover before tagging - 5,000 to 10,000 items per day • Stock turnover after tagging - 20,000 items per day • Increase of 250%-300% in receipt and shipment of goods 2006 EPCglobal Inc The Business Case and the numbers • Increasing number of leading organizations are publicizing results, for example…. – Gillette 3 days • Improving product launches and promotion • “The Advantaged Strategy” – moving beyond an all or nothing approach – Wal Mart 16% 89% 99% • Improving on shelf availability • Broad based process improvements – DoD • Improving “confidence” in the supply chain – Baggage tracking • Improving control and accuracy – Apparel 20% • Improving customer availability through improved inventory accuracy and control – And many more….. 2006 EPCglobal Inc Comparing Current Process to EPC- Enabled Process Revealed Significant Benefits Receiving Checking Shipping 20 seconds per pallet 80 seconds to 20 minutes per pallet 10 seconds per pallet 5 seconds per pallet 20 seconds per pallet 5 seconds per pallet Current Process EPC Process The example of promotions non-compliance Future stock-outs Future unhappy customers Need to hit the mark exactly Lost sales Unhappy customers Run advertisements Publish TAB’s Launch product Enabling Actionable Visibility performance promotions date Sales-loss (Sanjay Sarma) time Overview • • • • • • About EPCglobal The Need for Global Standards Current Standards Tangible Results Case Studies Summary 2006 EPCglobal Inc In summary… • EPCglobal ..from hope to hype to implementation. – The EPCglobal community grows stronger every day – Physics and standards challenges are being overcome – Prices are going down – The benefits of “visibility” are starting to be realized – The EPCglobal community has moved decisively from preparation to implementation The race for business benefits and competitive advantage is on!! 2006 EPCglobal Inc Questions Patrick Javick Manager, Industry Development EPCglobal North America T: +1 609.620.8023 M: +1 609.477.9286 -----------------------------------------------------------1009 Lenox Drive, Suite 202 Lawrenceville, NJ 08648 www.EPCglobalNA.org ------------------------------------------------------------ 2006 EPCglobal Inc
