Opportunity Lies in Threat

© 2009 IBM Corporation

Opportunity Lies In Threat - Surajit Paul

Supply Chain Security

20 October 2012

© 2009 IBM Corporation2

Agenda

Introduction

Financial Loss

Technology

RFID

Risk

Technology Vendors

Q&A



Introduction

Cargo Theft is an international phenomenon which is a primary concern for the traders and 3PL providers.

Indirect loss comprises of the cost associated with replacement of goods, loss of business, reputation damage, and price undercutting by the sale of stolen properties.

While Australia and China being among the low risk countries, Russia is having high risk of cargo theft.

As per the study conducted by the Transported Asset Protection Association (TAPA), at present worldwide annual loss due to cargo theft is estimated to be US $50 Billion.



Financial Loss due to Cargo Theft

As per the statistical data collected from various sources, following is a snapshot of the estimated direct annual loss due to cargo theft at various regions across the globe

Data Source: FreightWatch, TAPA


$10.80

$30

$5$1.20

$0.13 $0.50

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

EMEA USA Canada India Brazil Argentina

Annual Loss in Billion USD


Technology

The risk of cargo theft can be mitigated by pervasive adoption of sensory technologies like RFID and GPS which increases supply chain visibility, irrespective of cargo being stolen at water, in-transit on the truck or in a warehouse.

The value of the RFID market in 2012 is US $7.46 Billion. The RFID world market is estimated to surpass US $20 Billion by 2014. [Wikipedia]

Today Radio Frequency Identification (RFID) is an integral part of our life whether it’s an access management, apparel tracking at shopping malls, brake free toll collection, automated inventory tracking, retrieval of stolen vehicles, animal identification, supply chain visibility, theft prevention or automated corrosion, temperature and moisture detection in infrastructure management.

On 14th December 2010, Bellagio casino in Las Vegas was robbed of US $1.5 Million worth of chips. Using RFID tags embedded inside, those chips were deactivated immediately rendering them unredeemable for cash value.

Source: Wikipedia



RFID

Several types of RFID devices exist, yet RFID devices may be broadly categorized in following two types –

– Active: Active tags require a power source; it can either be connected to a powered infrastructure or use energy stored in an integrated battery

– Passive: The tag’s lifetime is limited by the stored energy balanced against the number of readings the device must undergo.

An active RFID must be embedded with a battery, and a passive RFID receives energy from the reader / interrogator while a semi-passive RFID can support both. A passive RFID tag consists of an antenna, a semiconductor chip and some form of encapsulation; therefore it’s a suitable option for SKU level tracking in the retail industry due to its low cost of production, while an active RFID device can be applied for container level tracking due to its high manufacturing cost.

Retailers are considering RFID investment primarily for in-store inventory control, POS automation and loss prevention due to shoplifting, theft etc. Some of the Retailers adopting RFID are Dillard’s Inc, Bloomingdale’s, Macy’s, American Apparel, Charles Vogele, Metro, Marks and Spencer, Jones Apparel Group, Pantaloon Retail etc. American Apparel and Macy’s are planning to rollout RFID to all the stores in 2012.

Source: IDC Retail Insights



RFID

Some of the RFID post implementation benchmarks in the Apparel industry are –– Up to 30% improvement in inventory accuracy– Up to 50% of Out-of-Stock eliminated– Up to 96% reduction in the amount of time to cycle count

Since 2003, Wal-Mart has been working with the top suppliers to implement RFID for complete supply chain visibility, which also addressed the risk of cargo theft to certain extent.

Source: IDC Retail Insights, FreightWatch



Risk

The cost of production and RFID implementation is the greatest barrier to its wide spread adoption for commercial use.

The cost of production of a passive RFID tag varies from US $0.05 to US $10.00

The cost for an active RFID tag varies from US $5.00 to several hundred US dollars.

Source: IDC Retail Insights, FreightWatch



Technology Vendors

Transportation Predictive

Analytics & Simulation

Transportation Planning &

Optimization

Source: Gartner Research


Transportation Management

Real Time Routing

4flow

Battery-Powered

RFID

Cargo Portal Global Visibility for

TMS

Accenture Descartes Systems

Freight Gate Aero Scout Descartes Systems

Amber Road

IBM-Sterling Commerce

Barloworld SC Software

Cap Gemini

SAS

JDA

Infor

Lawson

JDA Software

Quintiq

SAS

Terra Technology

Manhattan Associates

Oracle

Ortec

Quintiq

Red Prairie

TMW

GT Nexus

JDA

Log-Net

Management Dynamics


Oracle

SAP

Ekahau

Intelleflex

RF Code

GLS HK

GT Nexus

Inttra

Unisys

Descartes Systems

GT Nexus

JDA

Log-Net

Oracle

SAP


Technology Vendors

Carrier Scorecard

RFID for Logistics

Source: Gartner Research


Transportation Tracking

Wireless/ Mobile Integration

GT Nexus

Automated Vehicle

Tracking

GIS for Mapping/Visualization/

Analytics

Hi-G-Tek Aero Scout Alien Cadec Autodesk

JDA IBM

Impinj

Xerafy

Tego

Motorola

Intermec

Savi

Lean Logistics

Management Dynamics


Mercury Gate

Oracle TMS

IBM-Sterling Commerce

AirClic

Cadec

Isotrak

Motorola

People Net

Qualcomm

Sprint

Checkpoint Systems

GlobeRanger

GPS Insight

Hi-G-Tek

IBM

Intermec

Isotrak

GPS Insight

Hi-G-Tek

Intermec

Isotrak

People Net

Qualcomm

SkyBitz

Descartes Systems

Esri

Google

Intergraph

Navtec

Oracle TMS

Pitney Bowes


Q&

A


Documents

Opportunity Lies in Threat