RFID What! Why! When!

1. RFIDWhat! Why! When! Presented by Kevin Rieth Pre-Sales Manager for Nutech Systems

2. Agenda • The Nutech Systems solution? • What is RFID and what is driving it • RFID tags and hardware • Evolving RFID standards • Current Concerns with RFID • Benefits of using RFID • How to prepare for RFID

3. Who Is Nutech Systems • Experts in providing Auto ID systems since 1990 • Implementing Auto ID solutions - for the automotive, pharmaceuticals, food & beverage, distribution and retail industries • Full Service Organization – we are more than just software • System Requirements Definition • ROI • Consultation • Implementation • Training • Complete Hardware Configuration and Setup • Certified Intermec RFID reseller

4. What is RFID? • Automatic identification (Auto ID) using radio waves. Antenna Reader DC Software ERP Software Viewpoint IFS Tagged Assets

5. What’s Driving RFID Industry Standards Supply Chain Mandates Government Reg's • Wal-Mart – top 100 by 2005, the rest by 2006 • DOD – World’s largest supply chain. Manages 4 million SKUs. • Metro – 5th largest retailer • Standards - TREAD Act • FDA • “The automobile industry will be using RFID technology to track parts throughout its supply chain within three to five years… “ GTO for GM • Benefits

6. RFID vs Barcode RFID Barcode Reads per second 40+ 1-2 Range Up to 300 ft 15 ft Line of Site Required No Yes Read/Write Yes No Human Intervention Less More Cost More Less Ruggedness More Less Reusability More Less

7. RFID Frequencies RFID: Item Management & Toll Roads RFID: Access Control Animal ID RFID: Item Management RFID: Smart Cards Cell Phone Low Freq. EAS TV Data Modem Radio Toys Garage Door FM AM CB 10 MHz 10 kHz 100 kHz 1 MHz 100 MHz 1000 MHz 2.45 GHz 300 GHz

8. RFID Tags • Different tags for different applications. • Consider regulations, materials, performance requirements, standards compliance. • Read-Only, WORM, Read/Write • Active and Passive • Temperatures from -40F to +410F • 16 bits to 512 Kbytes

9. Metal Tags • Bridged off of the metal • Space under the tag is important Tuned Free Space De-tuned Metal

10. Passive Tag Ranges Low Frequency (LF) Ultra High Frequency (UHF) • 120 to 140 KHz, 18 inches • Slower read rates • Best around liquids & metals • Larger, costly tags • 400 - 1000 MHz, 15 feet • Faster data rates • Anticollision • Good balance between range and performance High Frequency (HF) Microwave • 2.45 GHz, 3 feet • Fastest read rates • Anticollision • More expensive than UHF • 13.56 MHz, 3 feet • Slower read rates • Anticollision • Smartcards (security badges)

11. RFID Reader Considerations • Portable or fixed • Working Environment • Placement - fork lifts, dock doors, locations, conveyors • Standards

12. Standards • Electronic Product Code (EPC) EAN and UCC • ISO/IEC 18000 Part 6 RFID Air Interface standard for item management • ISO/IEC 15961 & 15962 Information interface for object orientated use of RFID in item management • ANS INCITS 256:2001 American RFID standard for item management • ISO 18185 RFID for electronic seal tags • ISO 23389 Freight containers – read/write radio-frequency identifications • ISO/IEC 18000 Part 6 RFID Air Interface standard for item management • ISO/IEC 15961 & 15962 Information interface for object orientated use of RFID in item management • ANS INCITS 256:2001 American RFID standard for item management • ISO 18185 RFID for electronic seal tags • ISO 23389 Freight containers – read/write radio-frequency identifications

13. What is EPC? • Standards being set by EPC Global (EAN, UCC) • Standardize tags, readers, software, processes, etc. • Assign each pallet, case and item a unique tag • Define a method of getting information on tags • Basically, putting RFID everywhere in the supply chain

14. EPC Format • Currently 64 and 96-bit versions defined, with higher bit versions being investigated (256). • Changing to meet expanding needs while keeping costs down. • Components: Header (EPC version), Manager (Mfgr), Object Class (SKU), and Serial# • 96-bit Version: 268 million companies, each with 16 million object classes, and 68 billion serial numbers in each class

15. EPC Tags CLASS 0 • UHF, 64 Bit, Passive • Read-Only, Factory Programmed CLASS 1 • HF, UHF, 80 Bit, Passive • Write once, read many (WORM) UHF Generation 2 Foundation Protocol • UHF, 96 or higher, Passive • WORM • Incorporate ISO standards

16. The Elusive 5¢ Tag • The goal… some say it is possible, others say it is not. • Some estimate that this will not happen until 2007. • The Chicken and the Egg Theory

17. The EPC Network Enterprise Applications Enterprise Applications ONS Savant Savant Internet Readers Case Tag Case Tag Pallet Tag Supplier to WAL-MART WAL-MART

18. The Traffic Controller • Every item with a serial tag = high volume of data traffic • Sort and filter tags • At a local level, and global level • Required for non-EPC applications too Traffic Controller

19. The Wal-Mart Initiative with EPC • Spend 3 billion = 8.4 billion in savings per year • Wal-Mart is the world’s largest tire retailer – Fitting-in with the TREAD Act 2005 Requirements ???: • Cases and pallets must be tagged (CLASS 0 or 1) • Pallets read automatically, cases manually • Using standard EDI (not the EPC Network) • 3 DCs and 150 Stores

20. RFID Obstacles • Cost • Opposition due to privacy issues – Killing the tag • Opposition due to health issues (RFID is well out of range of standards of up to 300GHz) • Evolving standards

21. Security • Passive tags – can be read by anyone • Short distance, and cannot read through many obstacles • With read/write tags, can build in security checks (keys) • RFID is tougher to counterfeit

22. RFID Benefits • Compliance! • Get things done faster, more accurately (i.e. 60 to 90% at receiving) • Less handling by humans = less errors • Reduction in labor costs • True real-time inventory tracking • Automatic replenishment request - internal & external • Reduction in obsolescence and shrinkage • Yard Management • Warranty tracking, asset tracking and theft • Targeted Recalls

23. Some Examples of Savings… Procter & Gamble • System cost in shipping area under $100,000 • Able to load more pallets with more accuracy with one less forklift operator • Expect to reduce inventory from $3 billion to $2 billion freeing $1 billion in capital & $200 million/year is costs Associated Foods • RFID to track trucks and shipping containers in a 600 acre facility. • Saves $250,000 per year due to re-located and eliminated positions. • The best accuracy they had before was about 75%, they are now close to 100%

24. How do you Prepare? • Educate yourself • Start small – Identify areas of most benefit • Evaluate the working environment and materials vs. tags and readers. • Examine your infrastructure • Create a pilot • Contact a solution provider that specializes in automatic data collection Nutech Systems

25. Viewpoint • Automates your warehousing and manufacturing processes • Expands the functionality of the ERP business system • Helps you comply with industry standards and mandates • Views on hand-held devices reflect your terminology and functionality • Compatibility with leading data collection hardware • Serialization

26. Information Resources • Nutech Systems www.nutechsystems.com • Intermec www.intermec.com • EPC Global www.epcglobalinc.org • RFID Journal www.rfidjournal.com • ISO www.iso.ch/iso/en/ISOOnline • AIAG www.aiag.org

27. Thank You for your time… Please fill-out your evaluation forms!