EPC Advanced Business Aspects
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EPC Advanced Business Aspects Training. Chapter 1 Introduction. Introduction. Chapter 1: Introduction Chapter 2: The Global Vision Chapter 3: Benefits of EPC/RFID Chapter 4: EPC/RFID Deployment Chapter 5: Examples of Applications Chapter 6: The Consumer. Chapter 2 The Global Vision.

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EPC Advanced Business Aspects


Chapter 1Introduction


Chapter 1: Introduction

Chapter 2: The Global Vision

Chapter 3: Benefits of EPC/RFID

Chapter 4: EPC/RFID Deployment

Chapter 5: Examples of Applications

Chapter 6: The Consumer

Chapter 2The Global Vision

The Internet of Things

The Internet (of information) expands to the real world: an Internet of Things emerges

The Internet of Things

Internet is an island

Today’s Internet is an island in the gulf of physical objects: only connected through human (manual) inputs

Benefits of the Internet of Things

  • Status (capture & report)

  • Diagnostics (troubleshoot)

  • Upgrades (augment performance)

  • Control/Automation (device cooperation)

  • Profiling/Behaviour Tracking (performance)

  • Replenishment/commerce (consumption)

  • Location Mapping and Logistics (sales)

Over 100 trillion items per year

10000 bio

6.5 bio

2 bio

1 bio

The size of the future market

The size of the future market

  • Available at

  • www.bridge-project.eu

We only can manage what we can measure.

Information systems & the Internet

Cost of data entry



Punch card


Manual measuring

Machine sensing

Physical world

No measures means potential business problems

Average OOS level in retail industry: 8.3%

Average shrinkage rate for supermarkets/grocery in US: 1.5% of sales

Average deduction level for inaccurate invoices: 9.9% of annual invoiced sales in US

Cost of unsellable food and grocery products in US: 1% of sales

Product counterfeiting is estimated to account for between 5 and 7% of world trade

Source: C. Tellkamp, E. Fleisch, Auto-ID Lab St. Gallen

Recent advances in miniaturization, sensor & communication technology, and new materials drive for a new computing paradigm

(4) Smart Things

(3) Mobiles /

Smart Cards

(2) PCs

Miniaturization and cost reduction

(1) Mainframe


The most widely deployed Technology: RFID

Leveraging RFID in retail

Source: C. Tellkamp, HSG; Gartner

The opportunities are multi-fold:

Linking Information


Search & Find

The correct medication to the right patient

Smart T-Shirts

Anti-counterfeiting solutions are under study



  • Project Goals:

  • EPC and NFC compatible mobile phones

  • EPC based product information

  • EPC based product authentication

  • NFC based loyalty programs

  • EPC triggered mobile advertisement

  • NFC based self check out and mobile payment


Retail Back-Office Solution




Loyalty program

Credit Card

New items are tagged everyday…

… for various purposes

RFID enables new business models


Source: Courtesy of F. Mattern, ETH Zürich

Technology that reaches the consumer


Chapter 3Benefits of EPC / RFID

What are standards?

Why do we have Standards?





Benefits of using standards

Benefits of Global Standards

Reduce costs

Speeds customer acceptance

Encourage innovation

Reduce complexity

Global Standards & Competitive Advantage





Standards allow technology providers to focus on innovation, not translation and intermediation

The role of EPCglobal standards

Encourage Technology Innovation

Foster competition Guaranteeing


Common Protocols for exchanging information

Role of Global Standards

The benefits of EPCglobal standards

Encourage Technology Innovation

Foster competition Guaranteeing


Common Protocols for exchanging information

Benefits of Global Standards

Lower Costs of products and implementation

Smooth integration with existing infrastructure

Lower Cost of Changes

Overview of RFID benefits

RFID is a tool allowing Increased Visibility

Best business decisions



Fully automated

data capture

RFID vs Barcodes



Bar Code

Data transmission

Electromagnetic / Wireless


Reading capability

Non-line of sight

Line of sight

Tag reading


One by one

Reading speed

500 / minutes

80 / minutes

Moving object reading



Data modification

Read & write

Write once, read many

Data volume

1 bit ~ 16 Mbytes

< 100 bytes

Access security


Little but possible



Not possible

Benefits of EPC / RFID over Bar Codes:

Complying with mandates

ALE and EPCIS provide increased visibility

electric eye






“at time T, the association of the following case tags to the following pallet tag was created at palletizer #3, to fulfill order #1234”

Data CenterEnvironment



PalletizerCapture App

“between the time the case crossed the two beams at location L, the tag X was read with temperature T”


Filtering & Collection

Reader Protocol (LLRP)



Supply Chain Visibility

Inventory Visibility

Chain of Custody visibility

Visibility of maintenance

Visibility of counterfeit products

Visibility is only the starting point

Trend Analysis

Problem Identification



EPC Readings

Operational Performance

Management of

Solutions Providers

Benefits for the producer

Visibility of Production Processes

Quick reconciliation of shipments

Just-in-time production and delivery

Benefits for the seller

Reduced safety stocks

Availability of products

Reduced theft

Speedy check outs

Improved after sales

Customer satisfaction

Where is my product?

Data flow

Data flow

Your product was last seen in Store #23, at 10am Tuesday, during receiving


Back-up Slides

Calculating ROI for implementing EPC / RFID

The checklist below summarizes some of the key financial items

incurred in EPC / RFID implementations

Understanding the Financial Aspects

  • One time set up cost:

  • RFID reader

  • Middleware

  • RFID printers

  • Networking & cabling

  •        Enterprise system integration

  • Consulting

  • Training

  • PC

Recurring cost:

RFID tags

Maintenance cost for

hardware & software



ROI Calculation Tools Available in the Market

EPC Value Models

Developed by Stanford University, Massachusetts Institute of Technology

(MIT) and EPCglobal US, aimed to identify business issues and drivers

where EPC / RFID is expected to have the greatest impact & quantify

expected value of EPC / RFID implementation.



Understanding the Financial Aspects


ROI Calculation Tools Available in the Market (Con’t)

RFID Cost Tutorial

Developed by EPCglobal Inc. is a reference tool for companies planning to

make an investment in RFID technology. EPCglobal recommends that the cost

items, phase structure and timeline presented herein be modified to suit the

specific needs of the organization.



Understanding the Financial Aspects


Benefits from Future EPC / RFID Trends

  • When RFID technology is commonly used in the future with sensing technologies, some potential use and benefits can be obtained:

  • Temperature tracking

  • Humidity monitoring

  • Tilt indicator

  • Accelerometer monitoring

  • Pressure monitoring


Chapter 4



Think of a major change

Think of any major change that you have

seen undertaken in a business……

Launching a new product

A grand new machine installed……..

A new computer system

Can you think of a major change that has taken place where you work ?

Preparing the change

  • Changes need:

  • Planning

  • Organisation

  • Collaboration

  • Purpose

  • Objectives

  • Review

Use the same common sense approach

Don’t leave your brain in the car park just because it’s radio !

Business Context

Getting The Business Context

EPC and RFID implementation is not only about technical aspects

EPC and RFID are tools for a business change in your operations.

Business processes Are Key

EPC / RFID can now impact your business processes


Who Will Be Involved…

Many departments will be involved so involve them early.

The Business Case

The Business Case



Customer Service

Customer Satisfaction


The Business Case – Common Benefits



Customer Service




The Business Case – Financial Benefits

Lower costs

Less inventory

Less work

Supply chain velocity

The Business Case – Efficiency Benefits

Better visibility

Standard terms

Common understanding between trading partners

Lower shipping errors

The Business Case – Customer Service

Time to market

Customer Response Time

Returns processing

Business Case – Customer Satisfaction


Warranty provision

Better service


The Business Case – The Environment

Better Disposal

Lower recycling costs

Tracking of hazardous material

The Business Case – Time

Time is Money

The Business Case - Summary

Deployment Objectives

Deployment Objectives

Set clear and specific objectives

Sample Deployment Objectives - Processes

Situation Analysis

Situation Analysis

A key factor to successful RFID deployment is understanding what exists before the change

Situation Analysis – Key Factors

What are the current processes ?

Where and how are they carried out ?

Who executes them ?

Where are items identified in the processes ?

Why is identification necessary for those processes ?

What materials move into and out of the processes ?

What information is key about each item ?

Situation Analysis – Common Tools

Process Maps

System Maps

RACI Chart

Situation Analysis – Radio Assessment

Radio energy can be impacted by many things,

so, assess your environment in this respect

Situation Analysis – Radio Assessment

Situation Analysis – Radio Assessment






Building the Team

Building The Team - Principles

  • Team-leader

  • Key stakeholders

  • Business knowledge within team

  • Open attitude towards change

Building The Team – Executive Sponsor

Executive Sponsor:

  • Sets the goals and direction for the program

  • Enables you to get the resources and commitment

  • Senior executive within the company

  • Leads a function or division if possible

Building The Team – The Core Team

The Core Team:

  • Stakeholders (right from start of program)

  • Guides program according to agreed goals and objectives

  • Acts as a link into the rest of the company

Building The Team – Motivation

Motivate beyond the initial enthusiasm

Hold regular training sessions, team feedback reviews,

team outings etc.

Be frank about what is working and what isn’t

Seek the team’s ideas on how to make progress.

Reward exceptional individual contributions

Reward achievement of major milestones by the whole team


Requirements Gathering

Requirements Gathering - KPI’s

Measurable Objective = Increase Average Revenue per Customer from 10 to 15 US Dollar by End Of Year 2008

KPI = Average Revenue per Customer



“No battle plan survives contact with the enemy”

Count Helmut von Moltke

the Elder

1800 – 1891

Planning – Why Do It At All ?

purpose and direction…

what is expected and when….


communicate progress or issues…


what to do if things go wrong…

Planning – Level Of Detail

  • Not too much detail…

  • For simple projects written list of activities is ok

  • Larger projects require activities list, usually spreadsheet

  • Large complex projects involving multiple teams, skills and functions over a longer period of time best planned using integrated project planning tool

    Not planning at all is planning to fail !

Process Integration

Process Integration - The Basics

Integrate new processes carefully in order to minimize disruption and risks

Process Integration - How

Document and understand the existing and new processes so as to minimize risks and misunderstandings

The Pilot

The Pilot - Why Do It At All ?

The Pilot - How - Start Small

Small is beautiful – until you know it works !

The Pilot - How - Start Small

… and / or a few locations then expand if these trials are successful

Select initially a few products …

The Pilot - How - Predict & Compare

For each part of the pilot:

Describe the new processes and what to expect

During the pilot:

Monitor and record what actually happens

The Pilot - How - RFID

RFID equipment usually requires adjustment – this is normal !

You can ensure interoperability of tags and equipment by ensuring that they are certified

The Pilot - Completion

Show the Executive Sponsor and the Core Team the pilot’s results and get agreement to deploy.


Deployment - Providing Support

Full deployment = full risk !

Deployment - Providing Support

You should ensure adequate level of support, either remotely or locally

Measuring Success

Measuring Success

Project success comes in many forms

Rewarding Success

Don’t forget to reward success

Regulatory Considerations

Regulatory Considerations

Ask your solution provider to ensure that your equipment is operating within the regulations for your country

Chapter 5

Examples of applications


  • Some applications of EPC/RFID

  • Asset Management (Nortura)

  • Track and Trace in the Book industry (Byblos)

  • Outbound / Inbound in the textile industry (Lemmi)

  • RFID in healthcare (Hospital Speising)

  • Cold Chain (Nestlé)

  • Baggage tracking (Hong Kong Airport)

  • Visibility in complex retail chain – (Wal*Mart)

  • Optimising manufacturing processes (Griva S.p.A)

  • Recommended exercise

Asset Management: Nortura

  • Norwegian company

  • Meat manufacturer

  • Employs 6.800 people

  • Annual sales €2 billion

  • Organized as a cooperative owned by approximately 30,300 farmers

  • 41 municipalities in 18 counties

    Problem:Today nobody knows where, which and how many Returnable Transport Items (RTI) are spead along the supply chain

Source: Nortura

Asset Management: Nortura

  • Benefits

    • Automatical RTI lifecycle control

    • Documentation of RTI lifecycle (cold, freezing cold, washing, etc)

    • Real time inventory

    • Prediction of RTI need

  • Process management project

    • RFID tag inside 80000 crates with GRAI

    • 73 RFID readers

    • Employee ID coupled with GS1 GRAI

    • Each person gets performance feedback

  • ROI: 3 months

Source: Nortura

Track & Trace in the book industry - Byblos

  • Portuguese company

  • Bookstore

  • 50,000-square-foot store

  • Receiving more than 200,000 products per week

Problem: Problems for localising products resulting in high costs of inventory and poor customer service

Source: Byblos

Track & Trace in the book industry - Byblos

  • Solution

    • 250,000 books, games and videos tagged

    • 40 RFID-enabled kiosks

    • 13 incorporates RFID security gates

    • 14 RFID point-of-sale (POS) reading stations

    • 10 RFID Handhelds

Source: Byblos

Track & Trace in the book industry - Byblos

  • Benefit

    • 30% less stock

    • Possibility to handle more customer at POS

    • Faster localisation of items

    • Faster reposition and re-ordering of sold items

    • Possibility of daily and full inventory

Source: Byblos

Outbound / Inbound in the textile industry - Lemmi

  • German SME company

  • A leading children’s wear manufacturer

  • Founded in 1959

  • Employs around 50 people

  • Produces over 1 million garments per year

    Problem: Poor stock turn over

Source: Lemmi

Outbound / Inbound in the textile industry - Lemmi

  • Solution

    • 100 % of merchandise is tagged

    • Integrated Solution: RFID fully integrated into ERP

  • Benefits

    • Increase efficiency on all steps of SC

    • Increase quality of deliveries from production to customers

    • Precise information on goods in transit

    • Strengthen relationships with customers

    • Easy to use for all employees

Source: Lemmi

Outbound / Inbound in the textile industry - Lemmi

  • Payback

    • Stock turnover before tagging: 5,000 to 10,000 items per day

    • Stock turnover after tagging: 20,000 items per day

    • Increase of 250%-300% in receipt and shipment of goods

Source: Lemmi

RFID in healthcare - Hospital Speising

  • Austrian company

  • Orthopädisches Spital Speising is part of Vinzenz groupe

  • Total number of beds: 2221

  • Hospital patients per year: 112359

  • Workers in the hospitals: 4535

    Introduction of RFID in instrument cycle of a hospital

RFID in healthcare - Hospital Speising

  • Benefits

  • Detection of specific medical equipment and inventory within the hospital

  • Better process transparency

  • Automated documentation

  • Simplification of logistics operations

  • Automation of ordering

  • Quality improvement in the process chain

  • Risk reduction in the area of application

  • Reduce storage costs

  • Increase the cost-efficiency

  • Patient safety

Cold Chain - Nestlé

  • World's largest food company:

  • 2007 sales – $98 billion

  • 130 operating Markets

  • 450+ factories in 87 countries

  • 250,000 employees

  • 130+ main brands

Ice Cream does not like heat shocks

Objectives of the trail 2007

  • Evaluate technical feasibility of a temperature monitoring solution along the entire cold chain

  • Evaluate the real advantages compared to actual situation, for all organization areasinvolved.

  • During kick-off meeting in June discovered other interesting issues....

  • Assess solution for several business needs:

  • - Freezer traceability

  • - Better support on freezer maintenance issues

  • - Service to big customers (e.g. theme parks):

    • efficient & automatic HACCP

    • freezer performance warranty for a better support on sales activities

  • - Systemsintegration requirements

  • Installed Sensors - Distribution



    In Freezer View

    • Simple to install – 5 minutes

    • No maintenance

    Secondary Distribution

    Problem with temp probe and compressor on the truck

    • 30° External

    • -18°C in Cold Store

    • -10°C delivery

    • First delivery at -23°C

    • Last delivery at -10°C !!!

    External temperature

    Truck temperature

    Cold store temperature

    Example: Store Freezer Activity

    Continuous defrosting.......

    Ice cream quality will be a problem

    -12°C constant

    Too warm

    Too cold

    Different from day & night?

    Freezer well regulated at

    - 22°C

    Key Benefits


    (cold store)

    Primary transport



    Primary transport

    Depot / Distributors


    Restaurant, Bar, POS


    • Improved visibility of the cold-chain:

    • Better understanding of:

      • Freezer performance & management

      • Temperature cycles – warning signs

    • Improved quality control of products

      • Quality & Safety

      • Improved product taste / experience

      • Lower 'bad goods' & insurance write offs

    • Potential energy savings

    • Added value services to Distributor

    Some results and conclusions

    At the beginning we talked about benefits in terms of:

    • Legal duty ensure quality in the food chain

    • Quality of product and brand image on market

    • Cost of bad goods

    • Insurance costs

    • Today we also talk about:

    • Better management of installed freezeer :traceability, sobstitution, maintenance, allocation, energy consumption

    • Marketing & sales support:service to customers(HACCP due activity, freezer performance, maintenance guide) allocation and match model/version freezer-location-invoicing

    • Support for research & development:thermal history of singles batches, development of product

    • Better efficiency on quality control:coverage, efficiency & “best practice”

    Significant opportunities for added value

    Baggage tracking – Hong Kong Airport

    • One of the busiest airport in the world

      • Passenger: 350 million per annum

      • Air cargo: 3 million tons per annum

    • Named the world’s best airport by Sky Trax (UK) in Apr 2004 & received special recognition award from IATA

    • ~ 40% of luggage handled comes from transfer flights

    • Major hub to/ from mainland & volume is expected to be increasing

    Baggage tracking – Hong Kong Airport

    • Issues

    • Currency bar code system is 85-95% read rate (Manually handling failures)

    • Remove & check all Unit Loading Device on the plane to identify baggage

    • Security measurement

    • Velocity and Baggage handling accuracy

    • Solutions

    • Deploy RFID technology on extensive baggage-handling facilities alongside the bar code system to bring up visibility, improve accuracy and efficiency, step up security measurement

    Baggage tracking – Hong Kong Airport

    • Benefits

    • Improve customer satisfaction

    • Improve security

    • Cut operating costs

    Visibility in complex retail chain - Wal*Mart

    • Walmart operates retail stores worldwide in various format

    • Products allocated through 90 DCs and/or direct from manufacturer

    • Total sales 2004 – US$ 256.3B

    • Requested EPC RFID tagging by Jan 2005 to increase supply chain visibility and eliminate many manual process.

    • Estimated annual saving is ~ 3.3% of sales (i.e. ~ US$ 8B)

    Visibility in complex retail chain - Wal*Mart


    • Without merchandise visibility along this huge supply chain may lead to Out Of Stocks, shrinkage, and operation inefficiency that could ultimately reduce competitive advantages


    • Mandated suppliers to affix EPC compliance RFID tags to cases and pallets before shipping to Wal-mart’s DCs. The tags allow Wal-mart utilize automatic tracking on product movement that will provide product visibility without additional human intervention.

    Visibility in complex retail chain - Wal*Mart


    • Eliminated many manual processes in the area of I) receiving, ii) product movement in warehouse and DC, iii) shipping to stores, and iv) paying suppliers.

    • Reduce inventory shrinkage and out-of-stock situations.

    Visibility in complex retail chain - Wal*Mart


    Optimising manufacturing processes – Griva S.p.A

    • Italian company

    • Founded 1955

    • A leading high-volume textile manufacturer

    • Employs 70 people

    • Annual sales €14 million

    • Markets – 60% domestic, 40% foreign

    • 300,000 rolls of fabric per year

    • Reliance on automated manufacturing systems with integrated logistics

    • “An improvement in productivity was critical to our ongoing competitiveness. Until recently, we could not accurately control the contents of the roll”Gualtiero Casalegno – President, CEO and owner

    Optimising manufacturing processes – Griva S.p.A

    • Fabric is woven and then rolled onto cardboard tubes

    • Alien Gen 2 EPC compliant readers and tags

    • EPCglobal numbering system

    • Compliant with European (ETSI) regulations

    • Strategic read points from production to warehouse

    • Harsh manufacturing environment

      • High temperatures

      • Water and high humidity

      • Harsh chemical agents for dying

    • Griva needed a robust system with complete fabric roll traceability without being intrusive to the production process”Claudio Bertolo – Marketing Manager, Simet

    Optimising manufacturing processes – Griva S.p.A

    • Visibility

      • Tracking of textile rolls through production

      • 15 separate dying and coating stations

      • Improved accuracy in production treatments

      • Accurate information to customers

      • Fabric can be sorted automatically

      • Readers at checkpoints supports decision making by systems and operators

    • Cost effectiveness

      • Reduced manual effort in:

        • determining most cost effective transportation options

        • Building customized shipping boxes

        • Identification of products

    Optimising manufacturing processes – Griva S.p.A

    • Production velocity

      • Before – 400 rolls per day (2 x 10hour shifts)

      • After – 600 rolls per day (2 x 8 hour shifts)

      • From 20 rolls/hour to 37.5 rolls/hour…….+87.5%

    • ROI

      • 30% after 9 months

    Recommended exercise

    • GROUPS (4 to 8 persons)

    • 20-30 Minutes

    • Benefits of EPC / RFID

    • Major Challenges of EPC / RFID implementation

    • Proposed applications:

    • Inventory control

    • Outbound / Inbound

    • Smart Shelf

    • Track and Trace

    • Anti-counterfeiting

    • Supply Chain Visibility


    Chapter 6The Consumer

    Consumer Acceptance

    Consumer Acceptance

    Responsible Use



    Consumer Awareness Guidance available atwww.discoverrfid.org

    Responsible use

    • Basic principles on Consumer confidence can be found at:

    • http://www.discoverrfid.org/how-it-works/your-rights/data-protection-guidance.html;

    • Consumer Guidelines for EPC on Consumer Confidence

    • ICC Privacy Guidelines on RFID

    • Centre for Democracy and Technology

    Addressing Consumer Benefits




    Consumer Benefits – Patient Safety

    Patient Safety - Stay Healthy

    New born identified with RFID bracelets preventing mix up

    Blood products are tracked and match with the patient Id

    Consumer Benefits – Food Safety

    Food Safety – Eat well

    RFID helps monitoring of freshness and quality of products

    RFID enables controls of authenticity and origin

    Consumer Benefits – Quality of Life

    Quality of Life – Get what you want

    RFID improves the postal service and speeds up the delivery

    RFID enhances the shopping experience

    Consumer Benefits – Quality of Life

    Quality of Life – Feel safe

    RFID helps you protecting your valuables from theft

    RFID helps ensure your airplane is properly maintained and does not contain counterfeit spare parts.

    Consumer Benefits – Quality of Life

    Quality of Life – Work better

    RFID protects workers in, contact with Dangerous Environments

    RFID saves us time at toll booths

    Consumer Benefits – Environment protection

    Environment protection – Protecting Nature

    RFID protects endangered species

    RFID allows for better and easier recycling

    Practical Recommendations

    Data Protection Overview

    Why is data protection law important?

    General Data Protection Directive

    General Data Protection Directive

    Some important obligations

    Data Controller MUST:

    • Ensure accurate data is collected and only what is strictly necessary

    • Ensure the data is processed for legitimate purposes

    • Protect the integrity of the data from unauthorised access

    • Notify to the data protection authority

    Some important obligations

    Data Controller MUST:

    • Obtain the consent from the person

    • Or show the processing of the personal data is needed to perform the contract

    • Or show the data is needed to protect the vital interests of the person

    E-Privacy Directive


    Data Protection questions on RFID


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