March 18th, 2010

Welcome Knoxville Welcome Knoxville APICS & SME GroupAPICS & SME Group

Presenter:Paul Reed, President, BRS

1585 Mallory Lane, suite 105, Brentwood, TN 37027615-377-8849 x2903Paul@ThinkBRS.com

RFID OutlineQuestions we’ll cover:

• What is RFID Technology?

• How does it work?• Who currently uses

RFID?• How is RFID being used

today?

• What are the limitations?

• What are the advancements?

• What is the Future of RFID?

• How do I implement RFID?

What is RFID?• RFID = Radio Frequency

Technology

• RFID uses a Radio Frequency Field to identify a person, animal or object

• It includes an antenna, transmitter, a reader and a tag

RFID Terminology• Read Only: Term applied to a

tag in which the data is fixed so can only be read

• Read/Write: the ability to read data from a tag and to change data (write process)

• Transponder: An electronic TRANSmitter/resPONDER, commonly referred to as a Tag

• Transmitter: An electronic device for launching an electromagnetic wave to transmit energy or data information

• Tag: Term for a transponder, commonly used by BRS

• RFID Tag acts as transmitter with memory (microchip) embedded within

• Types of Tags: o Active: use a battery to

transmit a signal (~500 + ft)o Passive: No battery but

draws power from reader (~50ft)

Components of RFID•Reader: An electronic device used to retrieve data from a tag •Antenna: Receives and transmits electromagnetic waves

What does RFID Offer?• Faster and Unique ID for

track & trace• Security: Not easily

replicated or counterfeited

• Large memory and high read-write

• Increased efficiency• Better service

How Does RFID Work?

Reader Antenna

Reader broadcasts signal through antenna

RFID

Tag Tag receives signal

Computer System

Reader sends info/data to computer system for collecting, logging and processing

Tag is charged with enough energy to send back an identifying response

• Barcode technology must look to scan, one item at a time

• RFID can scan the chip without visual contact• RFID can scan numerous items (10-100 tags)

simultaneously eliminating bottle necks • Barcode = Sight• RFID = Sound

Barcode vs. RFID

How is RFID used Today?• Supply Chain

Management• Passports or ID cards• EZ Pass on Toll Roads• Access Cards for Security• Airport Luggage• Library Check outs

• Real time inventory control

• Tracking surgical equipment

• Homeland Security• Counterfeit Identification

for currency• Ensures Quality and

freshness of produce

• Department of Defense• Healthcare Facilities• Airports• Warehouses• Ranchers (Livestock) • Wal-Mart• Many more

Who uses RFID?

• RFID cannot not easily function near or on: o Liquido Metal

• Radio Frequency Interferenceo Too many RF devices can interrupt the signal

• Environmento Outside (extreme cold or heat)

• Readers don’t need line of sight to read tag but can only read in certain area

Limitations

Advancements in RFID• New Tags designed to

function on metal• Tags and readers built to

withstand extreme conditionso Humidityo Extreme cold and heat

• New Equipment with Further Read rangeso 500+ feet

• RFID in Healthcareo Medical/surgical devices,

O.R.• RFID in Fashion

o Counterfeit prevention• RFID in Trucking

o Tire monitoring: pressure, mileage, rotation

• Automated Grocery Store Check outso A World Without Checkout Stations

• RFID Patient locator in Hospitals in case of disaster• Researchers Develop Motion-Measuring System

for Seniors and Athletes • Use of RFID to monitor strawberry temperatures

during shipments• RFID 2030: Retail and Manufacturing:

• Imagine how RFID will shape these industries two decades in the future

The Future of RFID

• Case Study 1: Chicago Aquariumo RFID Interactive submarine

• Case study 2: Pneumonia in Pakistano Doctors track patients and

symptoms• Case Study 3:

Newmont's Leeville Gold Mine (NV) o Use RFID to track workers and

equipment

Case Studies

• Problem: A medium size Belgian Logistics company was debating the use of RFID but didn’t know the ROI

• Goals:o To deploy the use of Passive Ultra High Frequency Tags

(UHF) that meet the EPC standardso To use a permanent UHF tag for each container

• Advantage: Deployment of RFID typically saves labor cost and reduces error

• Disadvantage: If RFID does not save labor costs near 50% or reduce errors by 10%, the ROI may not be worth deployment

Logistics Case Study Overview

• Step 1:o The Logistics Company tested and recorded their

current shipping and processing time (~ 30-40 shipments/wk)

• Step 2: o The Company then deployed and tested their average

time and shipments with RFID

Logistics Case Study – RFID and ROI

• Total cost for RFID implementation for Logistics Company (i.e. tags, readers, handheld readers, software, training and maintenance) is ~ $172,200

• The average Belgian employee’s salary = $26.05/hr• Cost of 1 employee’s labor for average shipment without

RFID= $69.30 (2.66 hours at employee’s $26.05 pay rate)• Without RFID= 35 containers/wk which equals 1,680

containers/year• 1,680 containers x $69.30 = $116, 424 total annual labor

cost per employee

The Actual Cost without RFID

• Total time for shipment with RFID recorded as 36min. 30 seconds VS. 2.66 hours without (as displayed on chart)

• Total cost for shipment with 1 employee with RFID equals: $15.89 (.61 hours x $26.05)

• Total Annual cost for 1,680 containers = $26,695 (15.89 x 1,680)

• Total Annual Savings = $89,730 ($116, 424 - $26,695 )

The Actual Cost with RFID

ROI with RFIDImplementation Year 1 Year 2 Year 3

Savings in Labor Cost

$89,730 $89,730 $89,730

Implementation Cost

$172,200

Maintenance Cost

$10,000 $10,000 $10,000

Net Savings -$172,200 $79,730 $79,730 $79,730

Solution: Payback period would be around 24 months, meaning implementation of RFID would be a wise decision

• Know RFID Standards • Technological updates found on EPC Global website:

epcglobalinc.org • Evaluate your resources• Determine times for compliance and develop a budget

for implementation• Estimate your ROI for the project• Determine if you want to incorporate a compliance

package (i.e. Wal-Mart, DoD, Metro) with your existing auto tracking

Implementation

Thank You

If you have any questions about RFID, Barcode and Packaging Needs or Custom Software, Think BRS!

Paul Reed, President1585 Mallory Lane, suite 105,

Brentwood, TN 37027615-377-8849 x2903Paul@ThinkBRS.com www.ThinkBRS.com

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