RFID for Carton Tracking

BJ FavaroTechnical Leader

September 2014

Factory of the Future Program - Supply Chain Operations

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Previous Challenges to RFID

CostPerformance &

ReliabilityStandards

Partners not interestedCisco mandate

DecreasingNow at 99.9%Global standard definedPartners engaged/doing their own workCollaborate for mutual benefit

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How RFID Can Help Cisco

Component

SuppliersGlobal Hubs

PCBA Sites

Direct Fulfillment Sites

Service Logistics Centers

Customers

Reverse Logistics Centers

Service Repair

CentersService Depots Scrap

Shipping & Receiving automation X X X X X X X X X X

Inventory management X X X X X X X X X X

Asset tracking X X X

WIP visibility X X X X X

WIP automation X

Process control X X X X X

Traceability X X X X X X X X

Increase data accuracy, increase productivityReduce out-of-stock, reduce shrinkage, increase productivityReduce capital cost, improve financial compliance, increase

productivityUpdate customers, quantify bottlenecks

Streamline processes, increase productivityDetect and report process errors

Automate data collection, improve purge/ECO/UMPIRE accuracy

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Objective of RFID for Carton TrackingAdd RFID tags to cartons at DF sites to:

• Automate shipping & receiving at DF sites and SLCs• Execute faster, more accurate inventory audits• Reduce shipping errors

Business benefits:• Increase partner productivity to reduce partner & Cisco cost• Improve planning & fulfillment• Reduce customer complaints

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RFID label printer and encoder

Product line

DF Packout

RFID fixed reader portal

RFID handheld readers

Warehousing

RFID fixed reader portal

DF Outbound/SLC

Inbound

DF/SLC Outbound

Packscan & Pallet Load Outbound

Loading docks

RFID fixed reader portal

Truck load

Truck load

RFID fixed reader portal

......

Product line

Product line

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RFID Packout Demo @ FTX

Videohttp://videosharing.cisco.com/p.jsp?i=9703

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Packout station equipment = $9,300 X 161 linesInbound/outbound portal equipment = $11,050 X 91 stationsTraining & misc equipment per site = $10,500 X 27 sitesPartner systems integration cost = $100,000 X 7 partners

Total cost = $4,072,000

What Would It Cost to Implement?

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How Many Times Are Cartons Scanned?Direct

FulfillmentOrigin SLC Destination

SLCCustomer

Route A61% of cartons shipped

Route B5% of cartons shipped

Route C19% of cartons shipped

Route D15% of cartons shipped

Scan outbound shipment

Scan outbound shipment

Scan outbound shipment

Scan outbound shipment

Scan outbound shipment

Scan outbound shipment

Scan inbound shipment

Scan inbound shipment

Scan inbound shipment

Receive inbound shipment

Receive inbound shipment

Receive inbound shipment

Scan outbound shipment

Scan outbound shipment

Scan inbound shipment

Receive inbound shipment

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What Does It Cost To Manually Scan at SLCs?Process Cost

Physical Receiver $ 1,799,616.00 Inbound Receiving $ 6,271,200.00 Cycle Count $ 514,252.00 Physical Inventory $ 108,864.00 Lost Carton Search $ 223,800.00 Outbound Scanner $ 6,614,400.00 Grand Total $ 15,532,132.00

• Cost of labor from 4 of 8 SLCs• Does not include DF sites• Does not include Cisco resources to respond to deviations, or cost to Cisco for

rebuilds

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FY15 Q3 (Proposal)

2nd Phase :- Other DF sites

:- Sites name are TBD

Other SLCs :- Sites Name are TBD

Time

Capa

bilit

ies

Roadmap

FY15 Q1FY15 Q2 (Proposal)

1st Phase:- One DF and One SLC Site Pilot release to put the RFID on the Carton. Program Caron id as RFID.

• Add the RFID/Carton id in the ASN/4B2/3B2 and 3B3 messages

• Replicate the RFID/Carton id and location in the SAP Hana

• Report to show the end to end tracking of carton based on RFID.

FY15 Q4 (Proposal)

3rd Phase :- Remaining DF sites :- Sites name are TBD

Remaining SLCs :- Sites name are TBD

BTS sites( Pallet level implementation)(FVE,IML, SHK, SEL) .

Scoping and Planning

FY16 Q1 (Tentative)

Align with Cloud Solution :- TBD

FY16 Q2 (Tentative)

Collect the data Using Autotest Cesium:- TBD

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Risks

Description ActionPartner productivity improvement may not automatically reduce Cisco cost

Work with partner managers and partner to agree in advance cost reductions based on agreed upon productivity improvements

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Resources to refine cost and benefit estimates, and create implementation plan

Request to Move Forward

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Arvato DF sites that ship software only (Dublin-BV, Wville-INC) Changes to Cisco software or systems Improvements to Universal Order Visibility

Out of Scope