1© 2005 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialRFID for Retail Training

RFID Enabled Warehouse for Retail

Herb WangExecutive DirectorCisco SystemsJuly, 2006

Delivering Intelligence to RFID

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Agenda

• RFID Application for Retailers

• Background of Bailian Group

• Overall Review on Project–Project Phases

–Current Status

–Cisco’s Technology Support RFID for Supply Chain

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RFID Application for Retailers

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Industry DriversSupply Chain: RFID Value is bi-directional

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Slap & Ship (Compliance)Encode and apply tags to goods, Record EPS data, No business process context

Value

ROI

Enable collaboration and visibilitySecurely exchange EPC data with partners; Enable tracking and tracing across supply chain

Zero latency decision support using RFID dataAnalytics & reporting; Create actionable insight; Extract more value from RFID investment

RFID enabled adaptive Enterprise Integrate into ERP, SCM, CRM, Legacy and other back-end systems; Leverage captured data to drive business decisions

Industry

The Current Industry Dilemma

FunctionalitySource: SAP

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Background of Bailian Group

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综合业务事业部General Enterprise Division

物流事业部Logistics Division

房产置业事业部Real Estate Division

专业专卖事业部Specialized Business Division

购物中心事业部Shopping Mall Division

超商事业部Supermarket Division

生产资料事业部Materials Division

百货事业部Merchandise Project Division

百联八大事业部Brilliance Group has eight divisions

百联简介Introduction of Brilliance Group

• No 1 Retailer in China• Multiple Retail Business Format• More 200K Employees• More Than 7400 Stores• 1,100 Billion RMB Revenue• RMB 45 Billion Asset (not including real estate)

Highlight

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• 上海百联配送有限公司• Shanghai Brilliance Distribution Co., Ltd.

• 上海商业储运有限公司• Shanghai Commercial Warehousing & Transportation Co., Ltd.

• 上海现代物流投资发展有限公司

• Shanghai Modern Logistics Development Investing Co., Ltd.

• 上海华联配送实业有限公司

• Shanghai Hua Lian Logistics Co., Ltd.

• 上海汉克国际货运有限公司

• Shanghai Helka International Transportation Co.,Ltd .

百联物流旗下拥有:The affiliate companies include:

百联物流简介Introduction of Brilliance Logistics

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Bailian Logistics IT Environment

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Purpose: Step 1 - Warehouse Optimization

• AON RFID Solution–Short range mobile RFID readers to read RFID tags on pallets and storage rack units

–Accurate tracking of inventory as they are being stored in the correct storage racks

–Automated process to validate correct product put-away

–Automated process to validate picking process

• Problem Definition–Manual process to store inventory in storage rack leads to incorrect misplaced inventory

–Unable to locate misplaced inventory

–Manual process to validate the picking process

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Overall Review on Project

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Retailer3PLCPG MFG

DistributionCenters

DistributionCenters

Warehouse

ConsolidationConsolidation TransportationTransportation WarehouseWarehouse ShippingShipping De-consolidationDe-consolidation

Goo

ds F

low

Proc

esse

sEn

ablin

g In

fras

truc

ture

&

App

licat

ions

Global Digital Supply Chain – Phase Approach

DistributionDistributionManufacturingManufacturing

Standard Network and InfrastructureStandard Network and Infrastructure

Supply

Manufactures

Demand

Retailers

Pilot ApplicationsPilot Applications

3PL 3PLWarehouse

Asset/ Inventory MgtAsset/ Inventory Mgt Warehouse MgtWarehouse Mgt Secure TradelaneSecure Tradelane Logistics Track & TraceLogistics Track & Trace

EPC Dataflow

EPC Dataflow

EPC Dataflow

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Project PhasesPhase 1 – Q4 2005

A – Physics Test: Comparison between Japanese UID with EPC standards. Prove the feasibility of technology

B – Warehouse management using RFID as the enabling technology for a local positioning and navigation system. EPCIStrial in Bailian environment

Phase 2 – Q2 2006

Deploy tested technology to 6000 Sqm warehouse in Bailian for business operation and build business case by ROI calculation. Finalize RFID solution and build ecosystem.

Phase 3 – Q4 2006

Track and trace of products from supplier to the distribution warehouse and retailer by establishing an EPC network for logistic data sharing between retailers and CPG manufacturers

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RFID Tagged Storage Racks

Real Warehouse

AON

EXE WMS

Phase Approach: Technical Requirements

• AON Technical Functionality :–ALE Event filtering to read RFID tags

–Correlation logic to associate pallet and storage rack locations

–Alert generations for exceptions handling when inventory is incorrectly stored

–Extensible adapter framework for integration with WMS Systems to update inventory management systems

SQL DB

Short Range RFID reader on

Forklift

AON

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Tyco Agile 2Reader/Antenna

Shelf Tags

RFID Phase 2 Architecture

Cisco 2811 routerWith AON module

switch

Teklogix VMT

AP

WiFi

Teklogix handheld

Pallet Tags

AON host

AON Oracle DB server

RF .netServer

WMS DBserver

VerSign EPCserver

ONSStandard Data interface

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Current Status

• 6000 SqmWarehouse• 2 Forklifts equipped with RFID readers• More than 3000 tags installed on shelf and on floor• Four handheld readers in use• Cisco wireless network in place• Technical Issues

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Cisco Technology for RFID

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Cisco Application-Oriented Networking (AON)

• The first and only network-embedded intelligent message routing system

• Moves key application infrastructure functions into the network where they can be easily shared

• Makes message-level communication, visibility, and security ubiquitous throughout the enterprise

Adding Functionality in the Network

Announced in

June 2005Announced in

June 2005

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Cisco’s Place in the RFID EcosystemA

ctiv

e/Pa

ssiv

e Ta

gs

System Integration

ISO/ANSI standards (active)

Intelligent FoundationIntelligent Foundation

Network Planning/Support

WiFi“Readers”

Location

WiredReaders

EnterpriseApplications

Supply Chain Management

WirelessReaders

Printers

EPCIS

ONS

HandheldReaders

EPCglobal standards (passive)

AONMiddleware

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Delivering Intelligence to RFID