Case Study

Tagging & Verification Retail Pilot

Mobile Maximo RFID Implementation

Date: 18 March 05

Contents

1. Abstract...........................................................................................32. Background......................................................................................43. Project Goal......................................................................................54. Pilot Overview..................................................................................75. Process Outline................................................................................86. Technology Outline........................................................................127. People............................................................................................178. Pilot Gaps.......................................................................................189. Conclusions....................................................................................1910. Acknowledgements And Further Information................................2011. Appendix 1 - Application Screenshots...........................................21

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1. 1. ABSTRACT

Can the use of mobile auto identification technologies solve the asset compliance challenges that the Sarbanes-Oxley (SOX) Act requires?

Most observers would agree that the Sarbanes-Oxley (SOX) Act is the single most important piece of legislation affecting corporate governance, financial disclosure and the practice of public accounting since the US securities laws of the early 1930s. In July 2002, the United States Congress passed the Sarbanes-Oxley Act into law.

The act was primarily designed to restore investor confidence following well-publicised bankruptcies that brought chief executives, audit committees, and the independent auditors under heavy scrutiny. The act is applicable to all publicly registered companies under the jurisdiction of the Securities and Exchange Commission. UK companies with a US listing, such as BP, are also subject to the Sarbanes-Oxley Act.

From an asset management viewpoint, BP needs to answer the following questions satisfactorily in order to comply with the Sarbanes-Oxley Act:

1. Do you have an accurate inventory of all your physical and intangible assets? 2. Have you reconciled asset data from different systems? 3. Do you have a full history and audit trail of all Asset Transactions? 4. Do processes exist to detect unauthorised Acquisitions, Disposals and

Transfers?

It is apparent that asset verification projects will play critical roles in addressing these requirements for Sarbanes-Oxley compliance. However what about sustainability? What about the concept of using a mobile application together with Radio Frequency Identification (RFID) tags as the basis for ongoing sustainability? BP Africa, the Marketing Downstream business stretching from South Africa to Tanzania recently tested such a scenario.

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2. BACKGROUND

BP Africa holds an extensive range of assets valued at approximately $700 million. In order to provide legal compliance, safety assurance and the effective management of these assets, the business unit needs to know: “What assets do we currently have? Where are these assets located? How are these assets changing over time? “

Currently it is unable to do this in a standardised and consistent manner because of the problems highlighted below:

o Asset data is duplicated across several systems.

o Data held on one system is not made available to other systems.

o Reports are drawn from various sources and are inconsistent.

o No systemized verification exercises having taken place since 2000.

These problems have resulted in fundamental control weaknesses in the management of the fixed asset base which needs to be corrected in order to comply with the requirements within the Sarbanes-Oxley Act, which state that BP needs to:

o Ensure that it has the correct asset management policies and procedures in place.

o Ensure that its assets are to be properly labeled and classified. o Ensure that asset data from different systems is reconciled. o Ensure that a full history and audit trail of all asset

transactions is in place. o And to ensure its assets are secure.

Hence it has begun work on a comprehensive Asset Tagging and Verification project, the objective of which is to create an accurate and verified record of fixed assets with significantly more detail than the existing financial system is able to provide.

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3. PROJECT GOAL

In order to add value a whole new approach to verifying, tagging and managing a fixed asset base of approximately 180,000 items has been adopted. This approach utilizes Automatic Identification, (Auto-ID) which is the broad term given to a host of technologies that are used to help machines identify objects automatically.

By making use of this type of technology, the identification of assets, the capture of information about them and the mechanisms of getting this data into a computer system(s) without having employees type it in, will ultimately result in increased efficiency, reduced data entry errors and will ensure that asset registers are easily kept up to date.

Diagram1: Illustration of Asset Tagging Technology

The project’s goal has been to find that affordable, accurate and flexible method for tracking assets (and their condition) anywhere a communications link exists, which will result in a verified record of fixed assets. In addition to the implementation of a mobile Asset Care solution that ensures that a higher level of solution sustainability will exist once the verification exercise is completed.

The first phase of this process was concluded with the initial investment in the Maximo Enterprise Asset Management solution. Its build saw the creation of a series of generic placeholders that the “real” asset data, which, once collected, will replace, as illustrated in diagram 2.

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Diagram 2 – Generic Asset Placeholders in Maximo

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4. PILOT OVERVIEW

Before conducting a project of this scale it was seen as prudent to first begin with a pilot before emulating the process throughout the region.

The key objective of the pilot was to demonstrate how assets could be verified; and how asset tracking could be accomplished via a mobile asset care solution utilising the applicable auto id and mobile technologies.

In addition the pilot aimed to:

o Determine appropriate workflow for the integration of Asset Care;o Determine value of tagging for reducing cost associated with Asset Churn; o Determine most appropriate forms of tagging;o Determine infrastructure needs (e.g. savant, middleware and Maximo

integration); o Determine data flow requirements;o And to determine a cost model for asset tagging.

While the project’s overall scope covers the Retail, Commercial and Industrial (C&I) and Logistics businesses in South Africa, Namibia, Botswana, Mozambique, Zambia, Malawi and Tanzania excluding Zimbabwe, the pilot was conducted in Cape Town, South Africa and it’s scope included the following:

o In Scope

Completely tag and record asset data at two full convenience and three fuel sites

The duration was to be no longer than two months And to be concluded before year-end December 04 i.e. a project

timeline of five months with the work effort being completed Sept- Dec 04 and pilot performance monitoring Dec -Jan 05 (two months).

o Out of Scope

Sanitising (data cleansing) of the Asset this area of work would be scoped and designed in “Define”.

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5. PROCESS OUTLINE

RFID will not solve bad processes but has the ability to improve those that exist even providing the impetus for realigning these processes with an RFID benefits driven approach. The pilot attempted to outline two key processes with this in mind:

o On site Asset Tagging and Data Collectiono Ongoing Asset Verification

Because both of these where to a large degree “new” the predominant focus of the process mapping involved how the target audience would react to what was proposed i.e. did it fit in with their current workload and expertise.

Diagram 3: High Level Process Map - Click on the diagram and zoom 200

The overall process started with the communication of the project and continued through training, initial tagging of the assets and on to the regular monthly scanning of the assets by the sales managers (SMs). This is graphically illustrated above by diagram 3.

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Mapping:

To-Be

Version:1.0

Page:

5Title:

Level A4 : Track assetsLevel:

3Status:

DONEDate:09/2004

1

A41

CommunicatePlans

3

A43

Tag ExistingAssets

2

A42

Train DeliveryStaff

4

A44

Perform ongoingtracking

5

A45

HandleExceptions Deployment Schedule

Training Schedule

Asset PlannersInstallation ContractorsMaximo Administrators

Mobile Support StaffSales Managers

Trainers

Arrival ChecklistAsset List

Asset List TemplateDefined Processes

Exception SheetFeedback Form

New Work Order typesScanning Guide

Tagging GuidelinesTagging Rules

Training ManualTarget AudienceWrap Up Sheet

Trained Sales ManagersTrained support organization

Trained contract organization.Trained support organization

Arrival ChecklistAsset List Template

Job Card Safety GuidelinesTagging Guidelines

Tagging RulesWrap Up Sheet

Connectivity SettingsSynch Guide

Rollout ScheduleWork Order System

Exception Sheets

BP AdminDealer

ContractorData Capturer

Sales ManagerDealer

BP Admin

Updated Asset ListJob Cards

Exception SheetsData Verification Errors

Job Cards

Asset List

Asset ChecklistConnection SettingsPlanned Branch Visit

Synchronization GuideScanning Guide

Deployment ScheduleProject Goals

Defined Processes

Planning Team

Target Audience

Informed staff

New Work Order typesTagging Rules

BP AdminData Capturer

Updatedprocesses

1

A431F

Prepare for sitevisit

2

A432F

Perform Site Visit

3

A433F

Perform weeklydata checks

4

A434F

Handleinstallation

issues

Rolloutschedule

Work ordercreation rules

BP Admin

dealer

contractor

work-ordersystem

dealer

contractor

arrival checklistasset list template

job card safety guidelinestagging guidelines

tagging ruleswrap up sheet

connectivity settingssynch guide

feedback formforecourt mapcolour stickers

RFID tagsscanner

exception sheetconnectivity to BP

BP Admin

exception sheet

TaggedAsset data

Dataverification

errors

Operational data store

updated scheduleupdated guidelines

updated sales manager planupdated validation rules

data capturerBP Admin

loggedjobcard

Informal feedback

5.1 On Site Tagging and Data Collection

A turnkey contractor with the relevant experience and skill level was appointed to perform this task with the aid of an internal “Assets Tagging” co-ordinator who would play a liaison role between the role-players – Dealer; BP Sales Manager; Turnkey Contractor and Technical Back-office. In this process the turnkey tagging contractor (In-site Info) together with BP’s project co-ordinator would:

o Schedule – Pilot sites.o Confirm visits with the Dealero Ensure that all work done would start with the standard BP Asset Care work

order

This key process is described in more detail below and illustrated in diagram 4.

Diagram 4: Asset Tagging Process Map - Click on the diagram and zoom 200

When the contractor arrived on site, they would be required to approach the dealer or site owner with the work order in hand and introduce themselves. The contractor would go through a short interview and a checklist with the dealer to understand the assets on the site. The checklist covers items such as stolen assets, broken equipment, third party equipment (e.g. Coke sponsored fridges) and dealer owned equipment.

Regardless of ownership each asset is tagged and recorded. To minimise the disruption on site the process recommended that the contractor walk around the site with the dealer and identify each asset and its owner individually. The contractor could use coloured stickers to mark ownership (e.g. green=BP, red=third party, blue=dealer, white=unknown, etc.) during the site walk-through.

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Using the template document that describes the assets that are typically found on the site and which BP are interested in tagging. All assets whether they are owned by BP, the dealer or a third party are to be tagged. BP is responsible for the safety of its sites and any third party equipment must conform to BP’s Health and Safety tracking requirements. Certain fixed assets (as specified by the catalogue list) such as the canopy or coldroom which are high value, are not tagged because their status is unlikely to change. Whether assets are tagged or not their static and performance data is collected for analysis in the back office.

Once the assets have been identified and marked, the contractor can begin to tag and record each asset. When the tagging is complete, the contractor will confirm the asset list with the dealer and get signoff of the work order.

Finally, the contractor will need to synchronise the handheld to return the captured asset information back to BP. Any paper forms, such as exception sheets or insurance records (in the case of stolen assets) will either be faxed for mailed back to BP.

5.2 On-Going Scanning

The Sales Manager (SM) manages the relationship between the business and the Dealer as part of their normal management activities they perform regular visits to “their” sites. Part of their responsibility is the maintenance of the asset list, which forms part of the lease agreement between the Dealer and BP.

The SM would still do their normal sales-related activities at the branch as before with the addition of recording of the existing assets on site. They would thus be doing the continuous monitoring of the state of the assets as they visit each branch at least once a quarter as part of their regular sales activities. The intention is to simplify the asset recording process and with the aid of the RFID technology to minimise the amount of disruption to the Sales Managers job (15-30 minutes extra).

In preparation for their visit, the Sales Manager would connect to BP and download the current asset list from the server to the handheld. They should also download the Business Objects (Data Warehousing Software) report for a copy of the latest outstanding job cards for the site. These two lists should be reviewed in preparation for the visit.

At the end of the visit, the Sales Manager will record any exceptions that were discovered as described in the scanning guidelines document. They would also create any new work requests, either by calling in to the call center or directly on the handheld (when this service is available). Once the visit has been completed they would synchronize the handheld with the BP server when they connected to the BP LAN.

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De

ale

rS

ale

s M

ana

ge

r

exception report

scan and recordassets

performregular site

visit activities

discussdiscrepancies with

dealer

performasset review

asset list job cardsassetchecklist

scanning guide

feedback form

scan in branch tagscan out branch

tag

Diagram 5: Swim lane View of the Verification Process Map - Click on the diagram and zoom 200

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6. TECHNOLOGY OUTLINE

In an effort to define the architecture for the project, three solution proposals where requested and submitted by:

o IBMo SAIC ando Syclo

These proposals (Technical Infrastructure Plans) were submitted in relation to the pilot phase of the project with the expectation that the solution piloted would have a high degree of fit for the production solution.

Following an initial one-day workshop held in London (July 04), a more comprehensive two-day workshop was held in Cape Town (Sept 04). IBM and SAIC were present but not Syclo who were briefed by Brian O’Regan (INTEL) in his capacity as Technical Advisor to the project.

6.1 Evaluation Format

As part of the workshop a matrix of key issues was developed which formed the basis for the evaluation. These included:

o Tag suitabilityo Support networko Standards complianceo Solution component availabilityo Solution flexibility; compatibility and integrationo Scalability

Two issues, Cost and Partnership Aspects which were not covered in the technical evaluation were dealt with by the selection panel.

6.2 Overall Conclusions

On purely technical merits, it was concluded that any of the three proposals would have supported the business need. Implicit in the evaluation was however, a reference to time as per the project Terms of Reference that stated that the pilot would be completed by end-2004.

In this regard the Syclo option provided the most immediately available solution. The only potential downside to this solution was a considerable degree of “lock-in”. The Syclo solution was the least flexible in terms of application integration and potential development.

If the decision horizon was strategic rather than tactical, then either the SAIC or the IBM solution became more attractive. Differentiating between these two would need to be made within a broader context and as part of a separate evaluation.

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6.3 Syclo Back-End Solution

Diagram 6: Syclo Back-end Technical Solution

The backend solution comprised of:

o Audit and Work Order Application: Syclo (Mobile Maximo)o Front-End application middleware: Agentryo Back-end Application (Maximo) interface: Agentry.

Agentry is the underlying architecture that supports these applications. It has a GUI based development environment that allows for rapid modifications of base screens and business logic; it essentially serves as the “middleware” solution onto which the Maximo Mobile Suite and RFID integration has been built.

Once the backend architecture was in place attention was then given to getting the front-end right.

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6.4 Front End Technical Solution

The following technical selections where made with regard to getting the front end correct.

TAGS Factors Piloted TypeLow Frequency (134 Mhz)

Successfully used in LPG pilot in Holland;

Robust; Very Stable; Short Read Range

Yes Low Frequency 30mm Disk Transponder

Manufactured by Texas Instruments (RI-TRP-R9QL)

Operating frequency of 134.2 kHz

Est. read range < 60 mm Typical read time : 70ms Dimensions : 29.4 mm x

8.4 mm Weight : 8 gramMiddle hole allows tag to be screw mounted

High Frequency (13.56 Mhz)

Good tactical fit Read range 0.5 -1.0 m Stable Available

Yes High Frequency 13.56MHz “Laundry” Transponder

Manufactured by Texas Instruments (RF-HDT-DVBB-N0)

Compatible with ISO15693 standard for 13.56MHz tags

Est. read range 12-14mm

(on a steel structure with 3mm adhesive backing)

Data retention time: more than 10 years

Dimensions: 22 mm x 3 mm

Weight: 1.6 gramUltra HF (913 Mhz)

Potentially the best strategic fit but 915Mhz band is currently not available in South Africa

No

RFID READERS

Factors Piloted Type

TSL 134 Mhz “puck”

RuggedSize of a matchboxATEX 1

Yes RFID Wireless Bluetooth handheld tag scanner

Operates on both 134.2 kHz and 13.56 MHz

Supplied by Technology Solutions UK Limited

Dimensions: 56 x 41 x 21 mm

Weight: 51g Intrinsically safe for use

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on the forecourt - ATEX 1Bluetooth range: 10 meters

TSL 13.56 Mhz “puck”

RuggedSize of a matchboxATEX 1

Yes Same as above.

HANDHELDS Factors Piloted TypeSymbol MC 9000

Rugged Bluetooth WLAN GPRS Very Industrial and

expensive

No Rejected because it was not end user friendly.

Symbol PPT 8860

Good tactical fit Rugged Bluetooth WLAN but no GPRS Safe for use on

forecourt Nice look and feel Expensive

Yes Symbol PPT 8800 Series Manufactured by Symbol

Technologies Dimensions 33 H x 80 W

x 146 L (mm) Weight (with wireless

lan): 306g Display: TFT-LCD, 65K

colors, 240x320 Screen

Intel XScale 300/400 MHz processor

Windows Mobile 2003 Memory: 32Mb / 64Mb

RAM Serial, USB and IrDA

Connectivity

IPAQ 6340 Good strategic fitNot rugged (two screens went down in less than two weeks)Not safe for use on the forecourtTelephone; GPRS; BluetoothNice look and feelCheapest option

No Not safe for use on the forecourt

Very fragile.

Table 1: Front end Technology Selections

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RFI

D T

ag R

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r

Rad

io F

requ

ency

134.

2kH

z or

13.

56M

Hz

Blu

etoo

th W

irele

ssH

andh

eld

devi

ce

Han

dhel

d Cra

dle

Con

nect

ivity

to B

P

infra

stru

ctur

e

RFI

D T

ags

When all the components were pieced together this is what the front-end technical solution looked like:

Diagram 7: integrated Front-end Technical Solution

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7. PEOPLE

The development of capabilities in a consistent and standardised way did not occur because both the process and technology solutions where being developed in parallel and at a very high rate. The resultant training was often via show and tell; learning by playing and participating; some trial and error and via open channels of communication. As a result much of the time was spent in trying to design the potential training templates that would be needed rather than formally presenting specific courses to the respective audiences, this was a restriction encountered as a result of a tight timeline and a global project team who often had other project commitments.

Sales

Mgr

Deale

r

Asset

Car

e Pla

nner

Mai

ntenan

ce C

ontract

or

Max

imo S

ys A

dmin

CCCPro

cure

men

t

Finan

ce &

Acc

ounting

Inst

alla

tion C

ontract

or

Local D

CT

Proje

ct R

esourc

e (e

.g. I

BM)

Train

ing D

ept

Mobile

Support

Senio

r Mgt

Foreco

urt Sta

ff

Descr

iptio

n

Communication

Kick-off communication x x x x x x x x x x x x x x

Introduction to what is being done and why. How the rollout will take place

Installation Process x x x x x x xThe process by which the installations will be done at the sites

Ongoing Scan Process x x x x x x x x x x x x

The process by which sales manager staff will do the ongoing scanning

High level process x x x x x x x x x x x x xThe schedule by which the installation will be done

Install Schedule x x x x x x x x x

The schedule by which the installation will be done

Results of install x x x x x x xMIS Summary reports of the results of the installation

Results of install (per branch) x x x

MIS Summary reports of the results of the installation per branch

Results of install (exceptions) x x x x x x x x x x x

MIS Exception reports of the results of the installation per branch

Results of ongoing scan (exceptions) x x x x x x x x x x

MIS Exception reports of the ongoing scanning per branch

Training

Tagging x xHow and where to apply tags to equipment

Categorising x x x x xHow to categorize equipment in Maximo heirarchy

HH application x x x x xHow to use the handheld application

Sync'ing device x x x x xHow to synchronise with the handheld

Data transmit x x x x x xThe information going into Maximo

Diagram 8: Training and Communication Plan Summary

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8. PILOT GAPS

The pilot produced the following GAPs:

No TECHNOLOGY GAP IMPACT FIX/MITIGATION8.1 Handheld battery life

approximately three-four hours.

LOW Double size battery; Car Charger; Additional Batteries to be carried by Turnkey Contractor.

8.2 Battery life of the “puck” LOW Battery should last approximately 16 hours. No power indicator but can be recharged using a Nokia Cellphone charger. Additional pucks to be carried and investigate a non blue-tooth add-in.

8.3 No Reads of Low Frequency Tags off metal surfaces.

LOW High Frequency tags more appropriate and will be used for the full roll-out.

8.4 Partial Reads of High Frequency Tags off metal surfaces.

HIGH Investigate and test a tag with a plastic backing which will work in this environment.

8.5 Application enhancements MEDIUM Minimal, involved reworking some of the data templates and embedding the application into the PDA RAM, so that it would auto install if the battery went down.

No PROCESS GAP IMPACT FIX/MITIGATION8.6 Process conformance by

Asset Tagging Contractor and SMs where minimal.

MEDIUM Once technical solution is robust and tags are giving 100% read. Process training will formally be given to all parties.

No PEOPLE GAP IMPACT FIX/MITIGATION8.7 Capability with regard to use

of the handheld.HIGH Proper training material has

been developed to close this GAP. It deals with wider topics not just the use of the application.

8.8 Support for Handheld and Application.

HIGH Process and subsequent agreements/contracts will need to be in place prior to a full roll-out.

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9. CONCLUSIONS

The use of RFID technology on the Asset Tagging and Verification pilot provided enough evidence that increased RFID network connectivity to a broad range of high value assets translates to better control and management and ultimately more efficient asset tracking.

Once the GAPs have been closed the pilot goes a long way to satisfying the SOX requirements with regard to asset management. The use of RFID will enable the Business Unit to improve its sensing capabilities within the technology’s actual limitations as well as the business readiness.

It should be noted that the RFID will not make bad Asset Management processes better, or miraculously clean bad data in the Asset Register, but with the correct upskilling of the user base will make a good practice better and allow for more accurate asset management at far less cost and complexity.

Looking forward the Model now offers the BU a platform – a strong electronic back-bone - todevelop its asset verification and tagging strategy. The era of using spreadsheets and bar-codingto control assets over a wide and diverse area, will soon be over for complex, asset intensive, Business Units within the Group, and with an asset base of $8bn, it is vital that BP begins using auto identification technology to extract value, and to extend the useful and safe life of its assets.

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10. ACKNOWLEDGEMENTS AND FURTHER INFORMATION

This paper was written by Robin Golding (BP Assets Project Manager, BP Africa), David Mooney (IBM Business Consulting Services), Brian o’ Reagan (Intel, Solutions Architect) and Neil McKinley (SAIC).

With assistance from Curt Smith (BP US Application Director, CTO); James Neophytou (IBM Business Consulting Services), Nick Waller (SAIC Business Consulting Services), David Evans (TSL), Tom Altergott (Syclo) and Emily Woffod (IT Business Consultant/Project Manager).

For further information on the project please contact: robin.golding@za.bp.com

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11. APPENDIX 1 - APPLICATION SCREENSHOTS

Logging On Screen Pilot Sites with RFID tag type

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Establishing the bluetooth connection Scanning the tag and capturing other information from drop down lists.

Equipment details and specifications Setting up two blue tooth readers using the “favourites” option.

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