RFID/EPC 101

RFID/EPC 101

John Seaner

EPCglobal US

28-July 2004

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22004 EPCglobal Inc

Context for EPCglobal

• Significant, foundational industry transformations require leadership – EDI, network computing, barcodes

• Current mandates for the use of EPC indicate long-term commitment by global leaders– Albertson’s, U.S. DoD, Metro, Target, Tesco, Wal*Mart, etc.

• Industry priorities and needs must be addressed to meet timelines and avoid excessive costs– “by industry, for industry” critical success factor– Avoidance of fragmented approaches

• Successful path forward is a global approach– Leverage reach of committed companies and supply chains – Directly engage other industries, associations, standards bodies

and governments


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32004 EPCglobal Inc

Overall EPCglobal Mission• Partner with all industries to build communities

that drive mass adoption of RFID/EPC technologies

• Combine technical research and user experiences to drive collaborative development and rapid deployment of EPC technical standards

• Reduce risk and system integration costs for implementing firms

• Manage integration and coexistence of EPCs with successful bar code implementations of today


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42004 EPCglobal Inc

From “Research” to “Real World”

Research Commercialization

Partnership between 100 global firms, including founders:• Uniform Code Council• EAN International• Procter and Gamble• Gillette Continued

Research

US


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52004 EPCglobal Inc

Creating a Global Community

• Market Development• Training and Education• Localized Member Implementation Support

• Drive Technical Standards Development• Champion Global Trading Community Adoption • Provide Public Policy Advocacy and Intellectual

Property Protection• Fund Current and Future Research of Auto-ID Labs• Design and Administer the EPCglobal Network

Global Standards Development, EPCglobal Network, and Governance

Deployment of Standards, Implementations and Support Services

Member Organization

Supporting Global Supply Chain Convergence


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62004 EPCglobal Inc

Technical Standards Development• Unique opportunity for members to drive industry

requirements to leading hardware, software, and services providers

• All inter/intra industry perspectives represented• All geographies and supply chain participants

included• Industry/member commitment determines priorities• Linkages to support compatibility with the work of

other standards bodies, associations, and consortium

• 13.56 MHz, 915 MHz, 64/96 bit Tag Data, Gen 2 (forthcoming)


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72004 EPCglobal Inc

Public Policy and Regulatory• Multi-industry, global Public Policy Steering

Committee (PPSC)– Provide education and outreach to key stakeholders in the

public and private sectors.

– Reviews all relevant, recent and future studies on consumer privacy to inform and guide our discussions.

– Studies consumer perceptions and opinions regarding privacy and EPC.

– Provides state and federal bodies information that includes, relevant facts on EPC and its benefits to consumers and business.

– Investigates environmental, health, and safety issues

• Regulatory linkages to influence/monitor global legislation, rulings, codes, etc. that effects RFID/EPC standards development and industry adoption.


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82004 EPCglobal Inc

Intellectual Property (IP) • Free and open technology is essential for global

RFID/EPC adoption

• Initial due diligence completed with over 6,000 patents examined

• Continued work to assure there is no IP that would prevent the implementation of EPC technology

• IP Participation Policy in place covering all members (supported by 160+ companies)

– Open access/open process– Full disclosure of known patents– Specific declaration of IP– Royalty-free licensing (RAND by exception only)


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92004 EPCglobal Inc

Funding Auto-ID Labs Research• Federation of 6 worldwide academic institutions:

MIT, Cambridge, Adelaide, Keio, Fudan, St. Gallen

• Provides R&D related to RFID/EPC implementation:– Packaging Optimization– Manufacturing and Materials Handling– Automotive Research Initiative– Healthcare Research Initiative

• Effects of RFID on drug efficacy

• Cold chain requirements

• Performs fundamental research into the design and manufacture of RFID/EPC technologies


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102004 EPCglobal Inc

EPCglobal Network• Tags are “license plates” -most information is

held in the network• Serialized items can be individually tracked

across traditional trading boundaries in a standardized way

• Supports real-time, automatic identification and visibility of items at all points in the supply chain

• Provides high value business processes through on-demand information access

• Track and trace• Authentication/pedigree• Anti-counterfeit/diversion• Product recall and expiration


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Trading Community Adoption• Instantiation of multiple numbering systems and data

structures– Issuance and maintenance of globally unique object identifiers

• Existing Keys such as GTIN (Global Trade Item Number); GIAI (Global Individual Asset Identifier); SSCC (Serial Shipping Container Code); GRAI (Global Returnable Asset Identifier); GLN (Global Location Number); and NDC (National Drug Code)

• Supports non-EAN/UCC keys such as UID (Unique Identifier) and VIN (Vehicle Identification Number)

• Other numbering systems will be adopted based on industry support and implementation commitments

• Support member roll-outs through comprehensive, training programs and educational curriculum

• Solution provider compliance, interoperability, and certification testing results

• Steers the research agenda of Auto-ID Labs to address industry-specific needs.


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The RFID Tag

• 3 Parts– A Chip that holds information about the physical object to

which it is attached– An Antenna that transmits information to a reader via RF– The Packaging/Substrate that encases both the chip and

antenna so that the tag can be attached to a physical object

• Class 1 tag cost for bulk order is in the .20 to .25 range (50% less than 6 months ago)

• Tag rail rate is decreasing due to more field testing and greater efficiency in assembly processes


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Types of RFID Tags

• Passive– Powered by energy from reader (no internal battery)

– Smaller, lighter, less expensive– Almost unlimited life– Shorter range– Requires higher power from reader

• Active– On-board battery power source and transmitter– Larger, heavier, more expensive– Finite life– Greater range – Requires less power from reader

• Semi-Active or Battery Assisted Passive– On-board thin battery power source – Uses Passive Technology (no transmitter)– Finite life– Greater range but higher cost (less than active)– Requires less power from reader


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Reading and Writing Capabilities

• Read Only:– Information can only be read from an RFID device –

programmed at manufacture

• User Programmable– WORM - Write Once Read Many - Ability to initialize

an RFID device outside of the RFID manufacturer’s facility after manufacture

• Read/Write:– Information can be read from or written to an RFID

transponder during the time it is presented to a reader/writer


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Tags Utilize 5 Frequency Ranges• 130 KHz (common of pet ID implants)

– Very low read speed and very short read range– Small amount of data

• 13.56 MHz (common of smartcards)– Low read speed and short read range– Small to medium amount of data

• 915 MHz (common of cordless telephones)– Medium read speed and medium read range– Medium amount of data

• 2450 MHz (common of Bluetooth or 802.11)– High read speed and long read range– Medium amount of data

• 5800 MHz (common of toll road collection passes)– Very high read speed and long read range– Medium amount of data


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Tags are Organized into 5 Classes

• Class 0/I– Passive with read/write only capabilities

• Class II– Passive with additional functionality such as memory or encryption

• Class III– Semi-Passive with support for broad spectrum communications

• Class IV– Active with the ability to communicate with other tags in same

frequency range

• Class V– Essentially readers that can power Class I through III tags

– Can communicate with Class IV tags and with each other


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Gen 2 Standards Development

• Global interoperability and ISO certification

• Upward Class 0/1 migration through firmware/software update to existing readers

• New standard will effectively double the tag vendor base and dramatically increase production

• New tag will have reduced silicon requirements and thus be less expensive

• Protocol have locking mechanisms to prevent tampering and decoding


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Several Factors Effect Performance

• Reader Collision– The reader interferes with the signal from another

• Tag Collision– More than one tag reflects a signal at the same time

• Interference– Proximity to other RF devices– Forklifts and conveyors– Manufacturing Noise

• Signal Strength– Absorptive materials (liquids)– Reflective materials (metals)

• Dead Spots– Signal cancellation– Movement of the reader or tag


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Example of an RFID-Enabled Supply Chain

Warehouse

Tag: Raw Materials and Finished Goods ; Containers/Pallets/ Cases

Read: Production Line, Storage Locations, and Exits

Supplier

Tag: Trailers

Read: Gate, Back Door, Storage Location and Trailer Location/Proximity

Tag: Case, Tote, and Item

Read: Back Door, Storage Location, Shelf, Rack, Floor, Exits, and Entrances

Store Read: Smartcarts and Point of Sale

Home Read: Storage Location, Consumer Appliances, PackagingRetailer

Consumer


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Benefits Increase with RFID Tagging Level

Product Diversion

Supplier VMI

Replenishment

Production Planning

Receiving and Put-away

Inventory Control

Real time ATP/ATS

Inventory Reduction

Labor Efficiencies

Reduce Case Shrinkage

Demand Planning

Supply Planning

High Value Goods Visibility

Repackaging Visibility

Pick, Pack, and Ship

Cycle Counting

Shelf Maintenance

PALLET LEVEL

Degree of Complexity

CASE LEVELReduced Stock-Outs

Store Level Pricing

Dynamic Promotions

Consumer Insight

Shelf Availability

Limit Unit/Item Shrinkage

Self-Service Checkout

Aging/Quality Control

Assortment Planning

Efficient Product Recall

Warranty/Service Tracking

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ITEM LEVEL

Tracking and Tracing

Inventory Management

Asset Management

Field Service

Scheduled Maintenance

ASSET LEVEL


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• Used by more than 1 million companies• Utilized by 23 industries• Presence in more than 140 countries • $16.5 billion savings to date in the grocery channel

alone1

• Industries and geographies continue to adopt• Regulatory agencies are beginning to mandate• Federal and state legislation is beginning to emerge base

on critical public concerns and consumer awareness

Bar Code Usage Will Continue

1SOURCE: “17 Billion Reasons to Say Thanks: The 25th Anniversary of the UPC and Its Impact on the Grocery Industry.” Garg, Jones and Sheedy; PriceWaterhouseCoopers, 19983InkWorld Magazine, “Potential is Tremendous,” Nov 2003


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Barcodes Do Have Limitations

• Requires line of sight for scanning

• Label space issues and limited capacity for encoding information

• Does not have read/write capability

• Static information related to the class of the item

• Cannot simultaneously read & identify multiple codes

• Opportunities for human error


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• Ability to read multiple tags simultaneously with greater speed and efficiency

• No contact of line of site required

• Tags have read/write capabilities

• Tags are less susceptible to damage and can withstand extreme abrasive washes, bleaching, and heat

• Tags can be read through dirt, paint, steam, mud, and plastic

RFID Holds Several Value Propositions


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The Electronic Product Code (EPC)

• Globally unique object identifier– A “license plate”

• Currently supports the following keys:– GTIN (Global Trade Item Number)– GIAI (Global Individual Asset Identifier)– SSCC (Serial Shipping Container Code)– GRAI (Global Returnable Asset Identifier)– GLN (Global Location Number)– NDC (National Drug Code)

• Designed to accommodate other keys such as:– UID (Unique Identifier)– VIN (Vehicle Identification Number)


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Anatomy of an EPC

The SERIAL NUMBER is the unique object identifier

The HEADER identifies the EPC version number, enabling different types and future revisions of EPC

The EPC MANAGER is the name of the enterprise, typically the company responsible for maintaining the Object Class and Serial Number

The OBJECT CLASS is the class of the product, usually the stock-keeping unit or other object-grouping schema

Application of the EPCglobal Network in the Footwear & Apparel

Industry


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Trends in the Footwear & Apparel Industry

Need to Differentiate & Innovate -Private LabelingBetter Merchandise Assortments

Increase in Vertical Retailers - Lines Between Retailer and Supplier are Rapidly Blurring

Growth of the Mass Merchandiser - Lines Between traditional segments (GMA, Grocery, etc.) are Blurring

Focus on Store Ops – Minimizing Stockouts, MarkdownsImproving Customer Experience

Top 5 Value Chain Issues• Lack real time alerts and intelligent response to reallocate and reroute product to where it is

needed most

• Lack monitoring capabilities for all products throughout the order lifecycle (from source to settlement) across the value chain

• Lack visibility into store-level demand leading to stock outs and lost sales

• Challenge to cost effectively manage and reconcile orders while ensuring high levels of customer service

• Face increasing pressure to manage brand assets, differentiate product, and synchronize product attribute, pricing and promotion information with trading partners


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EPCglobal Vision

Global, multi-industry interoperability

Small, inexpensive, high performance tags

Serialized item tracking

001002003

Straightforward link with current systems

Networked, inexpensive readers

Distributed data


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The EPCglobal Network


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Applicability in Footwear & Apparel

• Inventory Visibility– Item Level (Back Room and Shelf/Rack)– Case/Pallet/Container Level (Supplier/DC/Store)

• Returns Management• Compliance Management

– Deductions– Chargebacks

• Global Track & Trace– Events, location, and destination– Private label goods and outsourced manufacturing


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Applicability in Footwear & Apparel

• Secure Supply Chain– Customs Trade Partnership against Terrorism (CTPAT)

– Electronic Supply Chain Manifest (ESCM)

– Container Security Initiative (CSI)

• High-Value Goods– Item counting for security purposes (i.e., Jewelry)

– Shrink management

– Combination with Electronic Article Surveillance (EAS)

• Authentication– Protection from counterfeit and diversion

– Protection from black/grey market practices


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Context for EPCglobal

• Significant, foundational industry transformations require leadership – EDI, network computing, barcodes

• Current mandates for the use of EPC indicate long-term commitment by global leaders– Albertson’s, U.S. DoD, Metro, Target, Tesco, Wal*Mart, etc.

• Industry priorities and needs must be addressed to meet timelines and avoid excessive costs– “by industry, for industry” critical success factor– Avoidance of fragmented approaches

• Successful path forward is a global approach– Leverage reach of committed companies and supply chains – Directly engage other industries, associations, standards bodies

and governments

RFID/EPC 101

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