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    Senior Managers

    Students Handbook


    Faculty: EPC/RFID (Bridge)

    DocType : Students Handbook

    Delivery: Classroom

    Status : Draft

    Date : 02/09/2009

    Author: Mark Van Eeghem

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    Document Change History.

    Author Date Review Actions

    Mark Van Eeghem 12/06/2009 New document Creation

    Mark Van Eeghem 02/09/2009 Error inChapter 1


    Document Conventions

    Useful information, often summarised. Hints and tips

    This information icon indicates additional informationor resources.

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    Icons The following icons appear in the Students Syllabus. Weincluded icons to draw attention to the text beside themand to give an immediate visual clue about the meaningof the material contained in the section.

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    Table of contents

    Document Change History. ......................................................... 2

    Document Conventions .............................................................. 2

    Table of contents ....................................................................... 3

    Chapter 1: INTRO ...................................................................... 5

    Chapter 2: BEFORE YOU START ................................................... 7

    2.1 The EPC Concepts .............................................................................. 8

    2.1.1 Solution to identification .............................................................. 9

    2.1.2 Solution to Data Capture ........................................................... 11

    2.1.3 Solution To Data Exchange ........................................................132.2 What Are the EPC/RFID Benefits? ..................................................... 14

    2.3 What Is The SCOR Model? ................................................................ 15

    2.4 Understanding Your Current Processes ............................................ 17

    2.5 Chapter Summary ............................................................................ 18

    Chapter 3: EPC/RFID AND THE PLAN PROCESSES ........................ 19

    3.1 PLAN Supply Chain ........................................................................... 20

    3.2 PLAN Manage Performance of Supply Chain ................................. 25

    3.3 PLAN Manage Plan regulatory requirements & Compliance ..........27

    3.4 Chapter Summary ............................................................................ 29Chapter 4: EPC/RFID AND THE SOURCE PROCESSES .................... 30

    4.1 SOURCE Schedule Product Deliveries ............................................ 31

    4.2 SOURCE Receive Product .............................................................. 32

    4.3 SOURCE Verify Product .................................................................. 33

    4.4 SOURCE Transfer Product .............................................................. 36

    4.5 SOURCE Assess Supplier Performance .......................................... 37

    4.6 SOURCE Manage Product Inventory .............................................. 38

    4.7 SOURCE Manage Capital Assets .................................................... 42

    4.8 Chapter Summary ............................................................................ 43Chapter 5: EPC/RFID AND THE MAKE PROCESSES ....................... 44

    5.1 MAKE Schedule Production Activities ............................................ 45

    5.2 MAKE Issue Material...................................................................... 47

    5.3 MAKE Produce & Test .................................................................... 48

    5.4 MAKE Waste Disposal.................................................................... 50

    5.5 MAKE Manage Production Performance ......................................... 51

    5.6 MAKE Manage MAKE Equipment & Facilities ................................. 52

    5.7 Chapter Summary ............................................................................ 53

    Chapter 6: EPC/RFID AND THE DELIVER PROCESS ....................... 54

    6.1 DELIVER Reserve Inventory ........................................................... 55

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    6.2 DELIVER Receive Products From Source Or Make .........................56

    6.3 DELIVER Pick & Pack Products ....................................................... 57

    6.4 DELIVER Load Vehicle ................................................................... 58

    6.5 DELIVER Ship Product .................................................................... 59

    6.6 DELIVER Assess Delivery Performance .......................................... 60

    6.7 DELIVER RETAIL - Receive Product at the Store ...............................61

    6.8 DELIVER RETAIL - Pick Product From Backroom ...............................63

    6.9 DELIVER RETAIL Stock Shelf .......................................................... 65

    6.10 DELIVER RETAIL Fill Shopping Cart .............................................. 67

    6.11 DELIVER RETAIL - Checkout ........................................................... 69

    6.12 Chapter Summary .......................................................................... 70

    Chapter 7: EPC/RFID AND THE RETURN PROCESSES .................... 71

    7.1 Authorize Defective Product Return ................................................. 72

    7.2 Authorise Maintenance, Repair and Overhaul (MRO) Product Return............................................................................................................... 74

    7.3 Chapter Summary ............................................................................ 76

    Chapter 8: SLIDEDECK OF THIS TRAINING .................................. 77

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    Chapter 1:...................INTRO

    Welcome to this EPC/RFID for Senior Managers course.

    We are happy to present you with this course where you will learnmore about how EPC / RFID can benefit your company and improveyour business processes.

    Enjoy the course!

    This course builds on the knowledge that you have acquired in theBasics of EPC course.

    It is strongly advised that if youre not familiar with EPC and/or RFID,that you first take the Basics of EPC course.

    There's general agreement that Radio Frequency Identification(RFID) technology is a potential boon to supply chain management.What's not as clear is who benefits and how.

    RFID is a indeed great enabling technology and having standardssuch as EPC and GLN to identify things and places is a great additionto that technology.

    But they are only great if used in the correct context and thatcontext is to provide benefits to people, companies and even

    governments.This context can however only be understood correctly through an

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    understanding of the basic business processes carried out.

    It is how this combination of technology and standards can impactthese processes, and the resulting benefits that are provided, which

    forms the key to understanding why anyone would undertake to usethis combination in the first place.

    This course will look at how the combination of RFID technology andidentification standards can impact those processes in a way, whichis beneficial not just to those carrying out the processes, but all ofthe stakeholders involved.

    The processes that can be impacted by EPC / RFID and the relatedbenefits will be presented to you using the SCOR model that is areference model considered cross-industry as the de facto standarddiagnostic tool for supply chain management.

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    Chapter 2:BEFORE YOU START

    What is in this chapter?

    Before you start, you should have a basic knowledge about EPC,RFID and which overall benefits you should expect from thiscombination.

    While this chapter will give you a brief overview about the EPC andthe RFID technology, you should refer to the other training coursesof this series that are basics of EPC, Advanced technical aspectsof EPC / RFID and advanced business aspects of EPC / RFID formore information.

    This chapter also briefly describes the SCOR model that we will useto show which of your business processes are impacted by EPC /RFID

    Additional information about the SCOR model can be found from theSupply Chain Council atwww.supply-chain.org

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    2.1 The EPC Concepts

    In the supply chain a number of different companies(manufacturers, warehouses, customs agent, forwarders, retailers,wholesalers) have a need to work together and share information ona regular basis.

    Given the number of partners involved, we have the need tocapture and share information in an easy and automated way.

    Overview of the 3 needs:

    When setting an information system in a supply chain, there are 3basic needs that have to be fulfilled:

    the need for identification;

    the need for data capture;

    and the need for data exchange.

    Below we will provide you with a clear understanding of theseneeds.

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    2.1.1 Solution to identification

    In order to identify items, a code called the EPC has been created.

    EPC stands for Electronic Product Code.

    The EPC identifies each single item uniquely and is also a key toinformation contained in IT systems

    The Electronic Product Code identifies each individual item since it

    contains a serialisation - a unique number allocated to eachoccurrence of the item.

    As an example, a pallet oftrade item A will have adifferent EPC from anotherpallet of trade item A. Thecoding scheme is organisedin such a way thatcompanies can allocate

    numbers that are globallyunique.

    The EPC code can be encoded on a tag or on 2D barcodes.

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    The Electronic Product Code is also a key to information contained inIT systems.

    The information can be about the key attributes of the item such as

    its description dimension or packaging. This is called master dataand this data is generally stored in the Global Data SynchronisationNetwork.

    The information can also be about the movements of the item thatis which product was where and when.

    Some active tags allow the item history to be available directly onthe tag which is a key requirement for applications

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    2.1.2 Solution to Data Capture

    The EPC, the Electronic Product Code, is captured using RFID, RadioFrequency IDentification. RFID is a wireless technology.

    RFID is the main technologyfor EPC, but as an alternativeyou could also use barcodesor manual data entry tocapture the data if thesemeans are more relevant tothe business case.

    RFID has the advantage over barcodes that it requires no line ofsight that is the items generally dont have to be positioned in acertain position in front of the reader to be identified.

    The basic principles of an RFID system are very simple.

    It works as follows:

    1. The reader sends energy and data in the form of radio waves tothe tag;

    2. The tag transmits its identity back;

    3. The reader receives this information and inform the host systemthat this particular tag has been seen at the location the readeris installed at a certain time.

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    The captured data is next grouped and filtered by the ApplicationLevel Events or ALE Interface as to feed the EPC Information Systemor EPCIS.

    In turn, the EPCIS can be accessed by your internal applicationssuch as your ERP, WHS or CMR systems or can be shared with yourtrading partners.Additional information regarding EPC and RFID can be found in thecourse Basics of EPC and EPC / RFID: Advanced technicalaspects

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    2.1.3 Solution To Data Exchange

    In a supply chain, trading partners need to share information aboutthe items.

    In the EPC /RFID world, the EPCglobalNetwork is the system that provides real-time information about each item.

    The EPCglobal Network is also the systemthat allows the trading partners to captureand share information about the items in anautomated way.

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    2.2 What Are the EPC/RFID Benefits?

    As we will see during this course, there are many benefits that EPC,RFID and the EPCglobal network will bring to your business.

    Without entering too much into detail, please note at this stage thatEPC / RFID enables:

    End-to-end visibility along the supply chain

    Effective capture of data without human intervention and

    without line of sight

    Better data accuracy and integrity

    Tracking and tracing at granular level

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    2.3 What Is The SCOR Model?

    The Supply-Chain Operations Reference model or SCOR model is areference model considered cross-industry as the de facto standard

    diagnostic tool for supply chain management.

    SCOR enables you to address, improve, and communicate supplychain management practices within your company and with yourtrading partners

    So SCOR is a management tool, spanning from your supplier'ssupplier to your customer's customer.

    This model is based on 3 major "pillars that are Process Modelling,Performance Measurements and Best Practices

    In this course, we will focus on the processes as our aim is to linkyour business processes with the EPC / RFID benefits you canachieve.

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    The SCOR model is based on five distinct management processesthat are Plan, Source, Make, Deliver, and Return.

    Plan - Processes that balance aggregate demand and supply todevelop a course of action which best meets sourcing, production,and delivery requirements.

    Source - Processes that procure goods and services to meetplanned or actual demand.

    Make - Processes that transform product to a finished state to meet

    planned or actual demand.

    Deliver- Processes that provide finished goods and services tomeet planned or actual demand, typically including ordermanagement, transportation management, and distributionmanagement.

    Return - Processes associated with returning or receiving returnedproducts for any reason. These processes extend into post-deliverycustomer support.

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    2.4 Understanding Your Current Processes

    While the RFID/EPCglobal combination can provide many benefitsfor process improvement, this will be difficult to achieve unless youhave a clear and detailed understanding of your current processes.

    This is usually achieved by simply mapping out the processes thatyou use.

    Example of grab oil management process at a manufacturer

    You may find that your company already has its processes mappedout, particularly if they are ISO 9002 certified as this is a conditionto be certified.

    If you dont have your processes mapped out then we suggest that

    you do go ahead and complete this as this will be one of the firststep for any deployment of an EPC / RFID system

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    2.5 Chapter Summary

    What was in this chapter?

    This topic presented the three major concepts of identification, datacapture and data exchange and how EPCglobal has providedsolutions to these key questions:

    - the Electronic Product Code (EPC) to identify items;- RFID to capture information;

    - the EPCglobal Network to exchange data between tradingpartners.

    This topic also introduced to the SCOR model that we will use in thefollowing chapters to highlight the benefits you can achieve byusing EPC / RFID

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    Chapter 3:EPC/RFID AND THE


    What is in this chapter?

    The PLAN processes are those processes that balance aggregate

    demand and supply to develop a course of action which best meetssourcing, production, and delivery requirements.

    These are the processes associated with determining requirementsand corrective actions to achieve supply chain objectives.

    The SCOR model differentiates 5 sub-processes depending whetherthe planning is done at the Supply Chain level or at the level of oneof the other SCOR processes that are SOURCE, MAKE, DELIVER and


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    3.1 PLAN Supply Chain

    The concept of manufacturing a product in one country for sale inanother country is not new.

    But when China joined the World Trade Organisation in December

    2001 it gave a whole new meaning to this concept.

    Many believe that the attraction for moving manufacturing to Chinawas the extremely low labour rates compared to the rest of theworld.

    But this is only half the story.

    Indeed, labour costs are only part of the picture as what really

    matters in the supply chain is the total cost of the finished productas it reaches the consumer.

    So you can see that these costs include not only the cost of makingthe product but also include the costs for transporting it, storing it,importing it and giving it to the point of sale, including anyapplicable duties or taxes.

    This is often referred to as the actual cost or the landed cost.

    China didn't attract half the world's manufacturing simply because

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    wages are very low compared to other regions.

    It attracted that manufacturing because the landed cost, was onaggregate cheaper than manufacturing elsewhere.

    But this scenario introduced more factors into the equation, or to bemore precise it didn't introduce them, it just made them far, farmore important than they had been before.

    Those factors were time and risk.

    Let's imagine a scenario that more closely represents supply chainsof 25 to 30 years ago.

    An upmarket department store in Munich is selling seasonal fashionclothes, and those clothes were made in Milan.

    Assume that the journey time by truck from Milan to Munich is in theorder of 24 to 48 hours.

    If demand substantially exceed forecast then the time to recoverwould probably be quite short and would mostly consist of the time

    taken to make the products if they are not in stock and the time tocarry them by truck them from Milan to Munich.

    So the chances of replenishing before season end and thesubsequent lowering of demand are quite good.

    Now let's run that scenario again, but this time those clothes weremanufactured in the city of Nansha on the Pearl River Delta inChina.

    The margin on these products is not so large as to sustain the costof air freight so they have to be transported by ship.

    The nearest major port is Hong Kong where they will beconsolidated and loaded into containers for shipment to a majorGerman port.

    Once at destination port they must be imported, customs cleared,handed over to the trucking company and taken down to Munich.

    Time to replenishment? Probably not less than four weeks, and if the

    season has only three weeks left to run?

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    You can see from these scenarios that when the manufacturing wasmoved to China the supply chain was considerably extended bothgeographically but also in terms of elapsed time.

    But it was also made more complex as many more stages andmodes of transportation were introduced as well.

    All of this combines to greatly increase the risk that some part of theprocess is going to go wrong, in general, the more processes thereare in a chain the higher the risk of failure.

    So what can be done to mitigate this risk and minimise any adverse


    The key to doing this lies in having the ability to see exactly what ishappening at every stage along the way.

    And that visibility has to be frequent, timely and accurate.

    But what exactly do we mean by visibility?

    In its simplest form it consists of just three elements:

    knowing what something is

    knowing where it was

    knowing when it was there

    Existing methods that rely principally on the scanning barcodes

    collect visibility data at just a few key steps in the overall process.

    RFID technology enables the automatic capture of this data muchmore frequently, more accurately and in real-time.

    The use of standards, such as those offered by GS1, to identifyitems, locations, commercial relationships, assets etc. means thatthis data can be easily exchange between trading partners andservice providers, such as transportation companies, in a standard


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    This standardisation acts as a key incentive for trading partners toparticipate in this exchange because, having developed a system todo this once, it can be used for any other trading partners using the

    same standards.

    Within the EPCglobal network, the cross-company exchange of dataregarding the physical flow of the products and assets is done usingEPCIS.

    EPCIS will not be covered in this course as its benefits and technicalaspects are already in the Advanced technical aspects of EPC /RFID and Advanced business aspects of EPC / RFID courses.

    So EPC / RFID provide you with a mean to know what is happening inyour supply chain in a manner that is much more granular, accurateand timely and to exchange this information with your tradingpartners.

    But the benefits of doing this can extend far beyond simply knowingwhen something has just gone wrong.

    It's possible to use such an environment to accurately predict thatsomething is going to go wrong.

    And it is this which enables a much more proactive approach to themanagement of supply chain issues.

    Let us illustrate this with a scenario where products are beingtrucked from the factory to a consolidation warehouse for loadinginto containers in time for the sailing of the particular vessel.

    With existing methods it is quite likely that we would not know if thetruck would make the vessel sailing until the truck arrived at the


    But using RFID infrastructure, coupled with standard means ofidentifying the truck and its contents, it's possible to track theprogress of the truck along its route from the factory to the port.

    Any delays en route can be automatically detected and alarms setto trigger in the system, with alerts sent to those managing thecustomer relationship.

    Customers don't like bad news but in general they can manage if

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    they know what is going on.

    But customers absolutely detest late bad news, because in effectyou have robbed them of the opportunity to contribute to improvingthe situation.

    In the above scenario knowing in advance that the truck would missthe vessel sailing enables you to proactively warn your customer onthe situation and to then offered to work with them on alternativecourses of action.

    Your customer then gets the perception that you know what is goingon, that you are proactively managing situation and that you really

    are concerned about the impact on them.

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    3.2 PLAN Manage Performance of Supply Chain

    We will clearly highlight in the next chapter how EPC / RFID canprovide you with accurate and timely data to help you monitoringyour different processes such as your receiving or productionprocesses.

    We will also highlight in the following chapters how EPC / RFID willallow to improve the performance of these processes that is forexample you will better use your assets and equipment or need lessinventory or production space.

    Improving the performance of your processes can have a beneficialimpact far greater than the cost directly associated to the process.

    Imagine a manufacturing plant that is nearing its throughputcapacity.

    Under these circumstances it would be prudent to undertakesecuring the next plant or other manufacturing facilities.

    But securing additional manufacturing facilities is a serious, time-consuming and expensive proposition.

    Suppose that the new factory doubles your overall capacity.

    But the day you proudly complete the opening ceremony it's veryunlikely that your sales volumes would have doubled as well.

    This means that the overheads in terms of capital invested andother general expenses for two factories must be spread over thesame or slightly larger volume of units produced.

    You can see from this example that delaying the point at which youmust introduce new capacity is a beneficial move.

    Yet the only way that this can effectively be done is to increase thethroughput using the existing capacity and EPC / RFID can have just

    about the impact.That ability to take less time to complete the production has the

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    effect of increasing supply chain velocity, which in turn delays thatpoint in time at which you need to consider additional capacity.

    This is a non-recurring benefit as at one point you will probably needanother facility but it is a sizeable benefit which could prolongcurrent levels of profitability, so it is well worth going after.

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    3.3 PLAN Manage Plan regulatory requirements &Compliance

    Government regulation can be an important driver for theimplementation of systems that would benefits from EPC / RFID.

    As an example, let us mention the European Union regulation thatbecame effective in January 2005 and that demands traceability offood along the entire supply chain in order to ensure consumersafety.

    Consequently, companies in the food business, whether they areproducers, processors or distributors, have to record from whomthey receive food products and to which businesses they supplyfood products.

    Companies dont have to trace their products through the entiresupply chain as they are only responsible for their own operationsand for the interface with their trading partners.

    Many companies started implementing barcode supportedtraceability systems well before the EU regulation for internalquality control and customer service purposes.

    What is new is that the increased visibility along the supply chain,provided by EPC / RFID can really improve your existing traceabilitysystem.

    First, EPC / RFID will reduce the data capturing effort and lower therisk of human errors such as mixing cases.

    What will generally happen if one of your food product container isnot properly scanned?

    Well there is a good chance you wont be able to trace this lotanymore thereby violating food safety and traceability regulations.

    Therefore you will probably have no other choice than to destroythese non-traceable products

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    Improved traceability systems can also help you target your recalls.

    Companies generally remove more products than required whenthere is a recall.

    Obviously, if there is a health issue, you will recall all the productsas you probably dont want your customer to think you haventremoved potentially dangerous products.

    But what would you do if you need to recall products because thereis a printing error for some batches?

    EPC / RFID at the case level would allow to better and faster identify

    which cases are part of the batches to be recalled.

    Similar applications such as those impacted by food safety, patientsafety, hazardous material handling, would also benefit from theincreased visibility EPC / RFID provides

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    3.4 Chapter Summary

    What is in this chapter?

    In this chapter, we have learned that extended supply chainsdemand much more attention to having good visibility all along thechain.

    EPC / RFID provides visibility along the supply chain that is what iswhere and when thereby allowing a better management andperformance of the supply chain from inventory control to facilitymanagement.

    EPC / RFID also allows the sharing of the data with trading partnersthrough EPCIS.

    Finally, you have understood that EPC / RFID could improve yourtraceability system by reducing the number of products you wouldhave to recall.

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    Chapter 4:EPC/RFID AND THE


    What is in this chapter?

    The SOURCE processes are those processes that procure goods and

    services to meet planned or actual demand.

    These are the processes associated with ordering, delivery, receiptand transfer of raw material items, subassemblies, product and/orservices.

    At this point, the SCOR model differentiates in 3 sub-processeswhether the product is to be stocked or is directly attached to acustomer order possibly with additional requirements from the


    In this chapter we will however not differentiate these 3 sub-processes as the benefits of EPC / RFID are applicable to all 3

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    4.1 SOURCE Schedule Product Deliveries

    This process is about scheduling and managing an individualdelivery of product against an existing contract or purchase order.

    In this process, you wish to reduceyour order-lead-time that is theperiod between placing an order and

    receiving the ordered item as to havea more reactive supply chain andEPC / RFID can help you do just that.

    Indeed, while conventional systemslimit tracking of items beingtransported, RFID Systems canprovide a total visibility of productmovement in the supply chain. Thismay help you to make early decisionsabout inventory control in case thereis any interruption in the supply.

    EPC / RFID also partially or completely eliminates time and effortrequired for counting while loading/unloading the items.

    This results into reduction of total lead-time for arrival of an order

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    4.2 SOURCE Receive Product

    An obvious saving during thereceiving process is that taggedpallets take less time to bescanned than bar-coded palletssaving manual labour even ifthe process is not fullyautomated.

    This in turn would free thearriving truck earlier and would

    facilitate the cross-dockingprocess for which you generallyto route the items to their enddestinations as soon as they are received.

    Those benefits can be considerable both for you and for yourLogistics Solution Provider (LSP)

    EPC / RFID can also enable the

    development of newapplications such as prioritisedtreatment of truck at thereception area.

    Indeed, several retailers arestarting to install RFID-basedtruck identification systems atthe entrance of some of theirdistribution centres.

    The trucks carrying an active tag are identified at the entrance andthe reception personnel is informed of their load indicated on thedispatch advise even before the truck arrives at the dock door

    This reduces extra waiting time for the trucks carrying products inshort supply

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    4.3 SOURCE Verify Product

    Now that the products have been received, you will want to check inone way or another that the product you received is in line with thedelivery note.

    Imagine a scenario where youreceive from your supplier a palletwith lets say 240 small items on it.

    In this particular scenario, it is

    highly unlikely that every box onthe pallet would present one of itsfaces to the outside world so youwill have to dismantle the palletbefore scanning each and everybarcode if you wish to verify youhave indeed 240 boxes of thecorrect type

    Add the time to rebuild, wrap again and re-label the pallet and you

    have a pretty good idea on how this process can be cumbersome.

    Interestingly, you might want tocheck again what is on that palletat a later stage, for example whenthe pallet will leave the stockroomto go in production or beforedelivering the products to the clientas to ensure there is no shrinkageon this pallet

    Compare now with EPC / RFID where you might have all your boxesbulk checked in a matter of second without the need to dismantlethe pallet.

    EPC / RFID will not only speed up your verification process but it willalso greatly improve it by detecting inaccurate deliveries.

    Inaccurate deliveries can directly cause out-of-stocks when an

    product that is in short supply is missing from the delivery.Out-of-stocks problems are one of the key issue in todays supply

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    chain and we will describe them more in detail in the section oninventory management later on in this chapter.

    EPC / RFID will help you detectinaccurate deliveries right atyour dock door so that youhave probably still a goodchance to correct the situation.

    Worse would be for you not todetect the inaccurate deliveryas it would result ininaccuracies in your inventorysystem too.

    You will have much less timeto react the day you will findout that the products are notphysically there while yourinventory system tells you so.

    At this stage, you will probably also be willing to check that theproducts you have received and that are on the delivery note are

    matching your orders.

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    This is what is called order reconciliation.

    The costs for reconcilingimperfect deliveries can bereduced in two ways that areimproving the ratio of perfectdeliveries and reducing thecosts for processing theseimperfect deliveries.

    A big chunk of these processingcosts are the costs for resolvingthe dispute between the trading


    EPC / RFID could be used toreduce these dispute resolution costs if trading partners agree touse data as a proof of delivery and define a mechanism for sharingany discrepancies between the data at the point of shipment andthe data at the point of receiving.

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    4.4 SOURCE Transfer Product

    Now that your products have beenverified, they will generally be put awaythat is transferred somewhere else, yourproduct warehouse or a reconciliation zonefor example.

    In most warehousing systems, it is thesystem that tells the operator wheresomething should be put away.

    The system will normally check that thewarehouse location is large enough for theproducts to fit in and the system will alsotry to put your fast moving goods, alsoreferred as class A goods, close to youroutbound staging to minimize transferdistance.

    What would happen if you would change

    the transfer process and allow theoperator to pick up a suitable location?

    Of course this would require extremeaccuracy in reporting back to the systemexactly what was put where, but sinceboth the identification of the item and ofthe location are being picked upautomatically and accurately by EPC /RFID, then this requirement is met, 100%

    of the time.

    The operator doesn't have to wait for the system to determine andcommunicate where the item should go which would speed up thetransfer process.

    This is a clear example showing how EPC / RFID would provide youwith the tools to change your business processes for betterefficiency.

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    4.5 SOURCE Assess Supplier Performance

    As we have seen previously, EPC / RFID will allow you to detectinaccurate deliveries from your suppliers which is a key measure oftheir performance.

    To highlight a second benefit,let us quickly imagine that youhave outsourced yourwarehouse management to aLogistics Service Provider or LSPand as part of your SLA (Service

    Level Agreement) with themthey were obliged to put awayall items within two hours ofreceipt.

    Today, with barcode technology you would only know the timebetween the logical receipt that is when the data is entered in thesystem and the put away.

    A smart LSP would have no problem delaying the scanning of thebarcode until the products can be handled within the agreed SLA.

    With RFID technology, the time of the physical receipt would becaptured when the pallet crosses the dock door so that you canhave accurate and relevant data to assess if your LSP has met theagreed SLA

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    4.6 SOURCE Manage Product Inventory

    Let us imagine this scenario, your warehouse management or stockcontrol system has proudly informed you of the location from whichyou have to pick one or more items.

    You go to that location only to find that the product you are lookingfor is not there.

    The system says it should be there, but it isn't. What do you donow?

    Well, most probably you can look around, ask colleagues and searchthe whole warehouse but this will prove very time-consuming whilepossibly completely ineffective.

    You might reorder the same products in emergency but this willincrease unnecessarily your total inventory costs .

    A few months later, you discover the products that were hiddensomewhere. Too bad that they are now obsolete or spoiled by thehumidity, you will have to write them down from your Profit & lossaccount.

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    The EPC / RFID solution to this problem is to make sure you dont

    have this out-of-stock problem in the first place.

    Indeed, by using a combination of RFID and item and locationidentification standards such as EPC and GLN, you could ensure thatthe system always accurately knows where an item was put therebyreducing the risk for out-of-stocks.

    To minimize the risk of out-of-stocks, you will also possibly doregular cycle count or complete physical inventory checks as tovalidate the inventory data in your system.

    These activities are easier and way faster to carry with EPC / RFIDconsidering the data capture is made easy with no line of sightrequired.

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    Shrinkage - also a common reason for out-of-stocks- will generallyoccur due to theft or obsolescence of the products.

    Everybody knows that theft can happen in shops but theft alsogenerally takes place in the supply chain itself.

    The most determined thief will always ultimately find a workaroundto any security system but RFID coupled with a standardidentification system can be used to deter and even stop the casualthief.

    And it is not always necessary even to install additionalinfrastructure to achieve this as RFID detectors on your receiving orshipping docks that are used for operations are equally useful fordetecting the departure of goods that should not be shipped!

    Obsolescence will occur when the inventory is no longer attractive

    enough to be sold in its target market or when inventory becomesoutdated in terms of regulations.

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    As the largest contributing factor to obsolescence is time, EPC / RFIDcan help tremendously in this process by giving you automatic,timely and accurate information as to exactly where your inventory

    is, what it is, how long you have had it and what order you shoulduse it in.

    We will discuss out-of-stocks in retail operations that is when theproduct is not available on the shelf for the customer in the DELIVERchapter.

    So, EPC / RFID can help you reducing out-of-stocks by reducingtheft, obsolescence and misplaced products that could result inunnecessarily replenishment orders and additional products ininventory.

    But above all, by providing you an exact figure of what is where andwhen, you will be able to better control your inventory reduce yourminimum stocks.

    Remember that Inventory costs are making a substantial part ofyour overall supply chain costs so anything you can do to keep yourinventory at the adequate level will have a direct impact on yourbottom line.

    And guess what, if you reduce your inventory, you will need asmaller warehouse and less equipment to operate it while at thesame time your inventory management will be easier.

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    4.7 SOURCE Manage Capital Assets

    As we are discussing the source process, we will only look here atthose company assets that are located at a suppliers facility or anoutside source.

    In this scenario, let us imagine you are providing your supplier withreturnable transport items such as pallets or crates either directly orthrough a pool operator.

    When these assets are delivered back to you with the suppliersproducts on them, well, they look like 100 years older.

    Tagging the returnable transport items with an EPC number wouldallow you to track and trace these assets that you exchange withyour trading partners and would therefore guarantee that the assetsyou received are those you shipped.

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    4.8 Chapter Summary

    What was in this chapter?

    In this chapter, you have learned that EPC / RFID will speed upprocesses of receiving and verifying the products.

    EPC / RFID will reduce out-of-stocks by reducing theft andobsolescence and by detecting inaccurate deliveries right at thegate.By providing real time information on what was where and when,EPC / RFID will also allow you make sure your inventory is adequatethat is also you dont have excess inventory.

    This better control over your inventory will allow you to furtherreduce your inventory costs as you will also be able to reduce yoursafety margins, minimum stocks, size of warehouse and the neededequipment to operate it.

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    Chapter 5:EPC/RFID AND THE


    What is in this chapter?

    The MAKE processes are those processes that add value to productsthrough mixing, separating, forming, machining, and chemical


    At this point, the SCOR model differentiates in 3 sub-processeswhether the product is to be stocked or is directly attached to acustomer order possibly with additional requirements from thecustomer.

    In this chapter we will however not differentiate these 3 sub-processes as the benefits of EPC / RFID are applicable to all 3

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    5.1 MAKE Schedule Production Activities

    In this process, you will schedule the operations to be performed as

    to produce the quantity of semi-finished and finished products yourequire.

    Availability of the required raw products is one of the key input intothis process so let us see how EPC / RFID can help you there.

    Let us imagine a scenario where the production planning at yourfactory is run on once a day at 8:30 AM.

    A pallet of material that you desperatelyneed for that day's manufacturing hasbeen delivered on time at 7:30 AM thismorning.

    However, that pallet didn't get scannedinto the system until 9:20 AM becausesome of your reception staff was sick orthere was just too much to scan at thattime.

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    As result, production using that material was delayed not by the twohours of the delay in scanning in, but by 24 hours that is when thefollowing day's production is scheduled.

    An EPC / RFID infrastructure would have detected automatically the

    received material as it crossed the dock door and would haveinformed your production planning system that the material wasavailable.

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    5.2 MAKE Issue Material

    We have already covered in the previous chapter the benefits to begained by EPC / RFID when you wish to issue material but thepicking location is empty.

    EPC / RFID will also save you time in the picking process as youwont have to scan the picking location or to input the number ofcases of cases you picked as this can be automatically detected.

    We have already covered in the previous chapter the benefits to be

    gained by EPC / RFID when you wish to issue material, includingpackaging material, but the picking location is empty.

    EPC / RFID will also save you time in the picking process as youwont have to scan the picking location or to input the number ofcases you picked as this can be automatically detected.

    For increased visibility, you can also install an RFID portal that woulddetect automatically the material that has left the warehouse andentered the production zone.

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    5.3 MAKE Produce & Test

    In some supply chain operations, particularly those which producecomplex finished goods, various components are brought togetherin specific configurations to form the final product.

    Automobiles, household white goods, computers, furniture andoffice equipment are all examples of these.

    What is particularly important in these operations is that the rightcomponents are brought together in order to make the final product.

    For many products the components are designed in such a way thatthe wrong components will not fit together properly and thusprovides a very visible signal that something is wrong.

    However, there are other operations were components such ascomputer disks, may be identical in physical form and may vary onlyin some other manner such as capacity, speed or internal content.

    Where this is the case it would be comparatively easy to complete

    the assembly of the product with the wrong components.

    In most cases this would lead to financial loss, customerdissatisfaction or incorrect functionality.

    But in some cases it could lead to the final product being adangerous combination of the wrong components, such as anelectrical fitting that would be incompatible with the electricitysupply in the target market.

    So you can see from this that building the product with the wrongcomponents can have serious consequences.

    Up until now barcodes have been the most effective barrier to thistype of error.

    But this technique requires that the unit identity, the workstation atwhich it is sitting and the identity of key components are all scannedin order to collect the identification data.

    This is an effective technique, but it is not always an efficient one as

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    it can take quite some time relative to the overall process tocomplete.

    Now imagine that a combination of RFID and standard means ofidentification of items and location are being used.

    Now the main unit will be identified simply because it arrived onstation.

    Bring a component near to that unit that is not on the bill ofmaterials and the system will automatically identify what thatcomponent is, pick up a serial number and then determine if it really

    should be being used for this unit.

    If it shouldn't be then the operator can be warned and the systemwould refuse to close the builds of that unit until the error wascorrected.

    Therefore, any work being done at that workstation is devotedentirely to progressing the build rather than identify what is beingbuilt.

    This has the double benefit of greatly improving accuracy whilereducing time to build.

    These in turn have knock-on effects on industry levels, customersatisfaction, time to market and supply chain velocity.

    Finally, note that no one has had to scan anything thereby reducinghuman errors that are often reported to be the biggest source ofmaterial and time waste

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    5.4 MAKE Waste Disposal

    You have made your finished products, packed them and they arenow available to the DELIVER process

    It is now time to collect and manage waste produced duringmanufacturing including scrap material and non-conformingproducts.

    While today, EPC / RFID brings limited benefits for waste disposal atcompany level, it is expected that companies will be more and more

    requested to tag their waste for recycling and disposal in the future.

    As an example, under the latest WEEE directive manufacturers ofPCs, and other electrical goods such as cookers, fridges and otherwhite goods, are now liable for the cost of their disposal.

    In Japan, medical waste materials are being tracked as they aremoved for disposal, the primary goal for the RFID system being toprevent illegal waste disposal.

    With tags fitted into these products, the task of disposal is muchsimplified.

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    5.5 MAKE Manage Production Performance

    To measure your production performance, you will look periodicallyat your Key Performance Indicators or KPIs such as number ofproducts manufactured, failure rates, processing times, comparisonbetween like operations, consistency of inbound material delivery,etc.

    By looking at these KPIs over time, you will be able to identify"trends" that would both tell you what has happened in summaryand provide you with a reasonable indication, though not a perfectone, of what is likely to happen in the future.

    It is these KPIs and trends that are used to monitor performance,set production targets, give commitments to customers, decide oninventory levels, set replenishment points, scheduled time for theuse of lines and equipment, and so on.

    But the key thing about trends is that they are made up of theunderlying data of individual events, which means that they canonly be as accurate as that underlying data.

    RFID technology, identification standard data & the means to easilyexchange that data in a standard way can vastly improve thequality and availability of this underlying operational managementdata.

    And that means getting a much better view of what is happening,trends, choke points, early warning of degradation and all sorts ofkey information that enables you to improve operations.

    Basically, putting much better data into the management reportingsystem is likely to result in much better decisions being made!

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    5.6 MAKE Manage MAKE Equipment & Facilities

    There are numerous applications where reusable containers such astotes, bulks, crates, used in production are tagged so that they canbe better tracked and traced within the company.

    Having a better visibility on these containers minimises time fortheir search thereby reducing the total lead time.

    Attaching active tags coupled with sensors would allow you torecord parameters such as the temperature while these containersare going through these harsh processes.

    This would mean that by knowing where your assets are and inwhich condition they are, you would reduce or eliminate manualchecks for maintenance

    Another advantage for these assets that will transit through harshenvironment such as stoves or freezers is that rugged tags generallyresist better than barcodes.

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    5.7 Chapter Summary

    What is in this chapter?

    In this chapter, you have learned that efficient production is heavilydependent on the availability of raw material, containers, packagingmaterial and equipment .

    By providing better visibility in finding and picking this material, EPC/ RFID reduces the production lead time and the labour costs.

    We have also learned that EPC / RFID can speed up the time to buildby limiting human errors and ensuring your final product such as acomputer are made of the correct components as indicated on thebill of materials.

    You finally understood that EPC / RFID provides you with moreaccurate production data so that you can better assess the performance of your production and make better businessdecisions.

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    Chapter 6:EPC/RFID AND THE


    What is in this chapter?

    The DELIVER processes are those processes that provide finishedgoods and services to meet planned or actual demand, typically

    including order management, transportation management, anddistribution management.

    At this point, the SCOR model differentiates in 3 sub-processeswhether the product comes from the stock or is directly attached toa customer order possibly with additional requirements from thecustomer.

    In this chapter we will however not differentiate these 3 sub-processes as the benefits of EPC / RFID are applicable to all 3.

    The SCOR model also define the 4th sub-processes that is DeliverRetail Product that we will also discuss in this chapter.

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    6.1 DELIVER Reserve Inventory

    Thanks to the increased visibility on your products whether they arein stock, work-in-progress, in transfer within your company, or ontheir way to your receiving dock, EPC / RFID will providing youaccurate data on where your products are and in which quantity.

    This will ease your process of reserving these products for specificorders and will allow you to schedule and commit for an earlierdelivery date than if you had less visibility.

    Customers rarely complain to be delivered sooner, do they?

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    6.2 DELIVER Receive Products From Source Or Make

    Finished goods coming either from the receiving zone or from theproduction zone will be received, verified, recorded and put away ina location such as in your finished goods warehouse.

    While barcode is a perfectly fine technology to do all these tasks, wehave seen in the previous chapters that EPC / RFID really speeds upthese tasks as most data will be captured automatically by the RFIDreaders.

    This limits human intervention that are prone to errors ensuringproduct data is recorded more accurately.

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    6.3 DELIVER Pick & Pack Products

    We have already covered the advantages that EPC / RFID provide inpicking products in the section on issuing material for production.

    Your picked products will next be combined, packed and wrappedand a label or tag will be placed on the pallet before delivering it tothe shipping area for loading.

    A stretch wrap station is usually the final step before shipping so anRFID system at this place guarantees the integrity of the containers.

    A stretch wrap station is also extremely attractive for an RFID portalconsidering the orientation of the tags continuously changes whilethe pallet spins making their reading very efficient.

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    6.4 DELIVER Load Vehicle

    To see how EPC / RFID can help with this process, let us imagine ascenario where a pallet is barcode scanned before loading on to thetruck.

    The scan told you that the pallet was at a certain position at acertain point in time.

    It told you that the pallet was staged for shipping, it can't tell youthat the pallet was definitely loaded on to that truck.

    The pallet could still be loaded on to the wrong truck yet the"system" considers that it was put on the right one!

    With RFID it's possible to minimise the chances of this type of erroroccurring.

    In this example positioning RFID antennae at the entrance to thetruck would indicate whether or not the goods had indeed been


    Some trucking companies are fitting out their trucks with readers forthis very purpose and of course the reader can detect if the goodsare being removed from the truck too!

    And readers are getting smarter too, with some now adding thecapability to determine direction of the tag as well as proximity.

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    6.5 DELIVER Ship Product

    EPC / RFID can also provide with visibility on your products whilethey are en route.

    Let's take the example of a truck load of valuable items and let'ssuppose that the truck embarks upon a journey that should take 14hours, and that we'd like to know if that track deviates from its routetiming at all.

    It is possible to use a combination of RFID to identify the truck, GPS

    to establish its position on earth and some form of communicationsto transmit the information back to a control point.

    RFID helps greatly here because it can enable you to see wherethings are much more accurately, more frequently and at a muchlower level of granularity than you could before.

    It's important also to realise that most operations today alreadyhave some form of visibility of their processes.

    Perhaps the form of this is that most people are familiar with is thecourier companies such as FedEx, who have very sophisticatedtracking systems which customers can access through a commonwebsite.

    FedEx are only able to provide this information because it wascaptured during their processes to begin with.

    So with RFID we arent really talking about providing something thatwasn't there before.

    But what we are talking about is a vastly improved method forcapturing the data that is then fed into such systems and forexchanging this data with your trading partners using EPCIS

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    6.6 DELIVER Assess Delivery Performance

    Knowing precisely exactly when the products departed and whenthey arrived will allow you to better monitor your deliveryperformance and improve your percentage of on-time deliveries.

    A good example can be seen in airport where tagged luggage areautomatically detected while passing choke points as to inform thepassengers when they should expect their luggage and as to reportreal-time the percentage of on-time deliveries.

    EPC / RFID will also help you detect more accurately if shrinkageoccurred during the shipment so that you can take correctiveactions.

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    6.7 DELIVER RETAIL - Receive Product at the Store

    The process for store receiving is in theory the same as that forreceiving goods into a warehouse.

    But for most stores there is a significant difference between the two,which is that stores typically have much less dock doors and smallerreceiving areas than warehouses do.

    Whilst it is also true that stores have less goods to receive than theaverage warehouse, what it does receive can arrive in an

    unpredictable and uneven manner, thus putting pressure on thosereceiving to complete the task very quickly.

    This is can be a particular problem during periods of high sales suchas the period leading up to Christmas.

    There are two common solutions to this problem, neither of which isparticularly perfect!

    The first is to specify a precise time at which each delivery can bemade.

    This has the distinct advantage of evening out the flow of arrivals atthe store receiving area.

    It has a distinct disadvantage of loss of flexibility in the operationand the potential that goods desperately needed on the shelves aresitting in a truck in the yard at the back of the store waiting theirturn to be received.

    The second method is even more unpalatable, as it involves takingshortcuts on the receiving process itself by not checking goods asthey arrive but simply moving them to a location in the back store,or directly to the shelf it is the type of operation that does not havean actual back store.

    As a mechanism for pulling goods through from the receiving areainto the store very quickly this has much to recommend it.

    But for the impact on your inventory, customer service, overalloperational efficiency, use of storage and financials, it has nothing

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    to recommend it!

    With EPC / RFID, the ability to automatically identify something as itcomes through your dock door should really speed up receiving, justas it does in any warehouse.

    If it is radio friendly material, then it's quite likely that you canautomatically receive it right down to carton level. But even if thematerial being received is an impediment to radio identification, itshould still be possible to receive it and say pallet level from readingthe tag on the outside of the pallet.

    The ability to automatically confirm where the goods have been putshould also speed up the put away process.

    Whilst the other benefits, such as inventory accuracy and being ableto find things later on, are important, at the back of the store it isthis ability to significantly increase throughput that is key.

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    6.8 DELIVER RETAIL - Pick Product From Backroom

    Picking products from the backroom is no different than issuingmaterial from a raw products warehouse or picking finishedproducts for delivery.

    The problem will discuss now is what happens if your shelf is emptyor as expressed in the retail world, you are out-of-stock.

    When those goods are not on the shelf they are not going to be sold,as simple as that.

    And this has knock-on effects, such as customer dissatisfaction andloss of revenue.

    Customers will not always go and shop with a competitor justbecause something they want is not on the shelf, it depends greatlyon brand loyalty, time available, distance to competitor and a wholehost of other factors which are very well understood by retailprofessionals.

    But if the customer encounters this situation often enough, they willmove to a competitor.

    There are three basic issues which cause out of stock that are:

    1. the item is not actually physically on-site, either in the shop orthe back store

    2. the item is in the back store but cannot be found

    3. the item is in the store that cannot be found

    Let's take the first situation where the item that is not on the shelf isnot physically on sites either, be that on the shop floor or in theback store.

    Here the most important thing to know is that the item is notactually available at all and that therefore going to look for it would

    be a complete waste of time, effort and money.

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    But as we have already seen, the logical inventory as perceived bythe system does not always match what is physically in place.

    EPC / RFID, by Improving inventory visibility, goes a long way toremoving this issue and restoring faith that the logical inventorypicture does match the physical.

    Its potential to avoid unnecessary work should not beunderestimated.

    Next, let's look at the situation where the goods are on site but theyare lost somewhere in the back store, in other words, when the

    associate went to the location as indicated by the system theproduct could not be found at that location.

    The two most common causes of this issue are incorrect put awayand the products being moved after a correct put away without thesystem being notified.

    Again, EPC / RFID can be used to ensure an accurate put away or todetect when items had been moved to another location.

    Lastly, let's look at the situation where the item is on-site and weknow that it was moved to the shop floor at some point. How weknow this will be explained in the next topic on shelf stocking.

    Success in detecting where the item is now really depends upon thetype of infrastructure that you have set up on the shop floor.

    If it's in an area where you are tracking at item level on the shelfthen it's quite likely that the system will tell you where it is.

    If it's not, then you will not necessarily know where it is but at leastyou will know that it was moved to the shop floor.

    And of course, it is still palletised you should be able to find it fairlyquickly as it's difficult to miss a complete pallet!

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    6.9 DELIVER RETAIL Stock Shelf

    Exactly when to replenish a shelf and to what level to replenish it isdependent upon many different parameters.

    In essence there are three basic parameters that drive this processthat are:

    the current level of stock on the shelf

    the desired level of stock on the shelf

    the probable level of demand in the foreseeable future

    The current stock level can be determined by deducting sales ofthat product from the stock level at a previous point in time andthen adding any stock that has been moved to the shelf since then.

    For this to work well you must have an accurate count of what hasbeen moved out of the back store and onto the floor and shelf.

    Using barcodes, this would be a very expensive and time-consumingprocess, as you would have to interrupt the flow of products leavingthe back store to scan them before they enter the sale floor.

    Indeed, this is such an expensive proposition that is simply notdone.

    But it can be done automatically using RFID and identificationstandards, giving an accurate picture of the flow from the back store

    to the sale floor.

    We should point out that unless RFID has been implemented as anitem level on the shelf itself, then this technique does not guaranteethat the item made it to the shelf, though it does guarantee that itleft the back store and entered the shop selling area.

    Where item level tagging is in operation on the shelf, the arrival ofthe goods onto the shelf would indeed be confirmed back to thesystem .

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    This has spin-off benefits as well, such as inventory accuracy andeven process improvement based upon a time analysis of the

    replenishment process.

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    6.10DELIVER RETAIL Fill Shopping Cart

    There are many mushrooming RFID based applications that are allaiming at better serving the customer and providing him withadditional information.

    More and more retailers are installing screens coupled with anantenna station in their stores where the customers can check if theproducts are somewhere in the shop.

    The stations also generally provide additional information on the

    product such as how the country of origin, how the product is made,the allergens it may content or whether this product is available inother sizes or colours.

    While all this can be achieved with lets say barcode technology,RFID has the advantage to insulate the consumer from thetechnology .

    Basically, the customer only need to know enough to take theproduct to a place where it is indicated they can get moreinformation.

    They don't need to scan anything and indeed they don't even needto be aware that anything is being scanned to begin with

    So the real difference between both technologies is the ease andconvenience with which the identification of the product can bemade.

    In the apparel industry, similar applications such as the magic mirroravailable in the changing room are also bringing benefits to thecustomers.

    Magic mirror will inform you on the different sizes and coloursavailable for the clothes you brought in the changing room, let youknow which other pieces of clothing would fit well with the one youchoose and also inform you about any promotion on these items.

    EPC / RFID in the changing room can also be used to automaticallyrecord which items go in and out of the changing room for theft

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    While you will frequently find today a store attendant countingmanually the number of items entering the changing room, all thiscould be done automatically with EPC / RFID

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    6.11DELIVER RETAIL - Checkout

    The original reason for inventing barcodes was for speeding upcheck out at supermarkets.

    Today sophisticated 3D scanners have speeded up that process tothe point where it takes just a quick swipe of each item across thescanning area to capture the identity of most items.

    The weakness of the process is that it is still basically sequential, sonow matter how fast you are, you can only scan one item at a time.

    Imagine now bringing 15 items of apparel to check out, placingthem on the checkout counter and then receiving the receipt orcredit card voucher for them 2 seconds later.

    Sounds implausible? Well, it is being done today all over the world.

    This technique is particularly effective with the items being sold aremade of material that is radio friendly.

    Apparel and footwear fall into this category, and there are manyvery successful implementations in this industry sector. But recentadvances in technology mean that books, DVDs andpharmaceuticals; all previously considered too difficult to use in thisscenario, have all been successfully implemented.

    Don't expect RFID to completely replace barcodes at retail checkoutfor some years however as this process cant yet be carried out forall types of items within a retail store.

    Metals and water still impact some forms of RFID such as UHF andother forms such as HF have a limited range.

    However, every month new developments are announced that movethe technology nearer towards overcoming these limitations.

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    6.12Chapter Summary

    What was in this chapter?

    In this chapter, you have learned that the increased visibilityprovided by EPC / RFID on your products and assets will speed upmost of your delivery tasks and reduce your labour costs whileproviding you a better accuracy as to which products are where andwhen.

    You have understood that EPC / RFID can also save you a lot of timein the store by locating more precisely whether the products are onthe back floor or on the sale floor reducing thereby out-of-stocks foryour customers.

    Finally, you have been shown some example of EPC / RFIDapplications implemented at the store level for the benefit of yourcustomers.

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    Chapter 7:EPC/RFID AND THE


    What is in this chapter?

    The RETURN processes are those processes associated withreturning or receiving returned products for any reason.

    These processes extend into post-delivery customer support.

    The SCOR model differentiates 6 RETURN sub-processes depending:

    Whether you ship (that is SOURCE) the products to be

    returned or you receive (that is DELIVER) them. Whether the product is defective, needs MRO that is

    Maintenance, Repair, and Overhaul or is in excess.

    Generally the handling of returned product in containers, pallets, oreven cases may not be complex enough to benefit significantly fromRFID

    There are however some RETURN tasks for which EPC / RFID couldprovide significant benefits.

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    7.1 Authorize Defective Product Return

    Let us imagine a scenario where a customer returns to your shopand claims that the digital camera he just bought last week doesntwork anymore.

    He wants the camera to be fixed or replaced, what will you do?

    Most probably you will first want to confirm that the customer isactually entitled to warranty services for the camera that ischecking the "warranty entitlement".

    Warranties come with differing levels of repair, differing levels ofservice to repair and differing periods within which warranty may beclaimed.

    So it's important that the precise terms and conditions of thewarranty are understood and can be confirmed before any work isundertaken.

    The traditional method of achieving this was for the customer to be

    given a warranty certificate of some form at the time of purchaseand have to produce it at the time of claiming warranty service.

    In some industries this may also be supplemented by the ability tolook up the warranty details by reference from the unit serialnumber.

    This latter method works well when manufacturers provided theirown warranty service as they had details to their own records.

    But as this work has increasingly been contracted out to thirdparties, this is far less convenient.

    RFID can help to make this whole process both more effective andmore efficient by carrying the warranty details on the product itself.

    Clearly these details need to be protected in some way againstunauthorised changes, or everything that is sold will suddenly

    acquire a 20 year on-site full parts warranty!But there are techniques available today to ensure the integrity of

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    this data in the same way that such techniques protect the dataheld on disk in the manufacturer's records.

    There is another aspect of warranty that is perhaps far moreinteresting, and although not openly spoken about, far more of aproblem, at least for those providing warranty service.

    Imagine a scenario where a customer company owns two identicalPCs and that the disk drive in one of them fails.

    That machine is not under warranty but the other one is.

    It's a simple matter to swap drives in the machines and then make awarranty call for the machine that now contains a different diskdrive to the one that was sold with it.

    The disk drive in that the machine is not under warranty but thewarranty check will be done only at the PC serial number level.

    The manufacturer has now provided warranty on a component thatwas no longer under warranty, and has borne the cost of doing so.

    There is already work underway looking at the technique of storingthe full configuration of complex units like computers or televisionsets on its RFID tag at the time of manufacture.

    This is commonly referred to as the "DNA tag" of the machine.

    It is then a simple process for whoever is providing warranty to readthe DNA of the machine and verify that all of the components that

    are being submitted under warranty are entitled to that service.

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    7.2 Authorise Maintenance, Repair and Overhaul (MRO)Product Return

    Warranty service would normally include some form of repair.

    While repair processes should be dealt with in the chapter on theMAKE processes, it is discussed here for clarity.

    The "DNA tag" can be very useful for the repair process as well, as itwill be useful for the repair operator to know the originalconfiguration of the unit for diagnosing the possible root causes ofthe problems being experienced.

    This concept can also be extended to indicating versions of firmwareor software in electronics products and even for variations of thesame part number.

    Indeed, in some industries the same physical part has a differentreference for warranty and repair services than that used for theoriginal sale.

    This is a technique invoked to ensure that parts that have already

    been used or serviced are not used in the manufacturing process fornew product.

    So sometimes, for the repair process, it is necessary to know notonly the reference of the original part but also the reference of thereplacement part.

    This is another important piece of data which could be carried onthe DNA tag.

    EPC / RFID and the concept of DNA tag are also very useful to keepthe history of critical components such as aircraft parts.

    Aircraft parts are refurbished regularly that is bringing the part backto the condition and tolerances that it enjoyed when it was new.

    However, all refurbishment processes to some extent weakens theintegrity of the original part so in many cases limits are set as to thenumber of times that refurbishment can be carried out.

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    Therefore someone has to keep track of what has happened tothese aircraft parts and ensure that any refurbishment limits are notexceeded.

    Today this is all achieved with paper records adjacent to the part incombination with electronic records with the manufacturer or ownerof the part.

    While effective, this process is also a very cumbersome and time-consuming method of maintaining and tracking this information.

    Although the central records will always be the formal records,

    imagine the efficiencies that could be obtained if the part historywas effectively carried on the RFID tag on the part itself.

    This is in effect, an extension of the DNA tag concept discussedbefore and is under active development by the aerospace industry.

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    7.3 Chapter Summary

    What was in this chapter?

    In this chapter, you have learned that:

    The handling of returned product may not be complex enoughto benefit significantly from RFID

    The warranty details can be stored on the tag attached to the product as to speed up the verification of the warrantyentitlements at the satisfaction of the customer.

    The full configuration of the product can also be encoded inwhat is called a DNA tag.

    DNA tags are useful for speeding up the repair of the product,verifying that the customer returns exactly what was sold andtracking critical components such as refurbished aircraft parts.

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