"Getting Your Business Ready for RFID"

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Getting Your Business Ready for RFIDWestern Pallet Association

January 23, 2006

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Introduction• Pat Winters

– Executive VP and Founder at Hunter Paine Enterprises– Working diligently to bring Lexite™ to market– Recently developed the SmartStick™ for RFID enabled pallets– Excited to introduce IBM and the pallet industry’s first On Demand

Solution for RFID enabled pallets• Mike Sorensen

– Member of the IBM Global Services Group– On Demand technology provider for all aspects of Hunter Paine– High tech solutions provider with a passion for solving customer

problems and creating unique solutions– Industry leader in the implementation of RFID business solutions

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Discussion Agenda

• Lexite™ and SmartStick™ Overview• IBM and RFID • On Demand Business Model• Implementing On Demand RFID Solutions • Next Steps

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Lexite™ Update

• HPE is working diligently to develop the manufacturing capabilities necessary to bring Lexite™ to the market in quantity

• Recent test results show Lexite™ consistently outperforms wood

• Lexite™ will enhance pallet pool performance and increase value of legacy pallet assets

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The RFID Enabled Pallets

• New patent pending technology from Hunter Paine Enterprises

• Creates value for the logistics and transportation industries

• Quick, inexpensive, reliable, and permanent method of mounting RFID tags to pallets

• Meets customer requirements for RFID compliance

The SmartStick™

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Why RFID enabled pallets?

• Creates an additional revenue stream for the pallet manufacturer

• Enhances your credibility with your customer base• Opens a new market and additional sales potential• Broadens your product base• Provides a viable RFID solution to your customer

IBM provides the infrastructure to make RFID enabled pallets and the SmartStick™ viable

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Questions and comments I’ve heard from you . . .

• How can I make money with RFID?• Where am I going to get the money to get started?• RFID is way too complicated to understand and it is changing every day• EPC can’t get their act together with a defined direction• I’m only the pallet provider. Why do I have to drive RFID to the market?• I can’t imagine an Industry Provider taking responsibility for

implementing the solution for pallets

© 2006 IBM Corporation

Radio Frequency Identification (RFID) for the Pallet Industry

Mike SorensenIBM Global Services

© 2006 IBM Corporation9

RFID capabilities at IBM

On Demand Business Model

Implementing On Demand RFID Solutions in the Pallet Industry

IBM, HPE and YOU - Next Steps


Why am I here?

IBM is a leader in the commitment to RFID implementation

Infrastructure from the pallet manufacturer is essential

IBM needs a solid foundational block for future success

We want to apply the RFID solution to the pallet industry

We have the know how and resources to make it work


IBM’s RFID Capabilities

End-to end design, deployment and maintenance Services, hardware and software Business case justification Strategy and roadmap development Solution design, choice of technologies and standards In house state of the art RFID test facilities Pilot testing Enterprise deployment Hosting and outsourcing On demand business model Financing


IBM On Demand Business Model

Access to expertise of IBM and RFID industry leading technology

One stop shop – IBM handles it all

Hardware, software and middleware design and implementation solutions are the responsibility of IBM

Pallet logistics and tracking are your responsibility

With the right business model, IBM can help finance

You pay for the RFID system as you use it Upfront initiation fee Pennies per month per pallet

IBM manages the technology, you manage the pallets


Data Integration(Data Warehouse)

Pallet Manufacturers

RFID InfrastructureProviders

Fortune 1000Pallet Users

(FMCG)

RFID Enabled Pallet Framework


Logistics Model

Your Customer A

Your Customer B

Your Customer C

(You) Pallet

Manufacturer/Aggregator

Model Driver: Everyone Needs to Make Money

Your Customer D

Your Customer A HUB 1



Logistics Model

Your Customer A

Your Customer B

Your Customer C

(You) Pallet


HUBDataCollection


Your Customer D




Logistics Model

Your Customer A

Your Customer B

Your Customer C

(You) Pallet


HUBDataCollection


Your Customer D




Logistics Model

Your Customer A

Your Customer B

Your Customer C

(You) Pallet


HUBDataCollection


Your Customer D




Logistics Model

Your Customer A

Your Customer B

Your Customer C

(You) Pallet


HUBDataCollection


Your Customer D




Benefits to you and your customer from RFID

Source: IBM Business Consulting Services analysis, Auto-ID Center

Cost Revenue Operational Effectiveness

• Improved product visibility• Improved asset & labor visibility• Improved data accuracy• Reduced handling requirements• Greater temperature & rotation capability• Improved planning, forecasting & allocation

• Reduced labor costs • Lower shrink costs• Lower inventory costs• Reduced reconciliation costs• Reduced returns costs

•Improved product availability on shelf•Increased cross channel selling opportunities •Enhanced ‘point of decision’ sales capabilities

Illustrative

Increased Profitability


What IBM needs from the pallet industry:

Your logistics and industry expertise

Closed loop durable pallet pools from your customer base For RFID implementation, we need to be able to track the

pallets We need solid shipping platforms that will last (Lexite™)

Understand the value We need to know what it is worth to you and your customer

to know what is on that pallet and to know where the pallets are

We need to develop a financially sound business model


What IBM needs from the pallet industry:

Access to end users We need to use your relationships and customer base We need Fortune 1,000 companies with committed RFID

initiatives and a budget to move forward Warehouse to warehouse local implementation Formal and informal pallet industry organizations to integrate for

national distribution

Commitment We need a commitment to move forward together over a period

of time. RFID implementation will not happen overnight. We need a commitment from you to provide the industry

expertise Start Small – Grow Quickly

Everyone needs to make money!


Call me . . . So we can learn and implement RFID together

Mike SorensenIBM Global Services4000 Executive Parkway, Suite 300San Ramon, CA 94583

(925) [email protected]