john soldatos - rfid in europerfidineurope.eu/sites/default/files/conference/day1_session3... ·...

Race networkRFID Conference, Prague March, 29-30, 2011

John [email protected]

Athens Information Technology

RFID-ROI-SME Project Web site: www.rfid-sme.euRFID-ROI-SME Coordinator tel: +32 2 2307599

RFID-ROI-SME Coordinator e-mail: [email protected]

http://www.rfid-sme.eu/�

mailto:[email protected]�


Project Overview Project Objectives Pilots Overview Status RFID-ROI-Evaluation Framework ROI Analysis - SME Benefits


Start Date: 01/03/2010 Duration: 24 months Total Budget: 4.400.000€ Total EC Contribution: 2.200.000€ Coordinator: UEAPME◦ The employers’ organisation representing the interests of

European crafts, trades and SMEs at EU level◦ Recognised European Social Partner. ◦ Non-profit seeking and non-partisan organisation.

SME Centric Consortium 20 Partners◦ 6 SME solution providers◦ 8 SME end-users◦ 5 SME Associations◦ 1 Research Partner


SME Associations:◦ European Association of Craft, Small and Medium Sized

Businesses (Project Coordinator)◦ CNA (National Confederation of Crafts and Small and Medium-

Sized Enterprises), ASOCIACIÓN EMPRESARIAL DEL SECTOR TIC DE LA CV

◦ Bulgarian Association of Software Companies, United Kingdom IT Association

SME Solutions Providers:◦ SERO Solutions, SATA srl, SENSAP S.A, Balkan Services, RFID-

Specialisten, Alu Group S.L SME End-Users:◦ CABLECOMMERCE LTD, DUF Dansk ungdomsferie, RETE SERVIZI

srl, BRIDGE129 S.p.A.◦ STYL. S. KOSKINIDIS S.A, Plásticos Industriales y Comerciales de

Alfarrasí, S. L, STAFF JEANS – DIMOVELIS, SOVEREIGN Cosmetics Limited

Research Partner:◦ Athens Information Technology


Deploy, operate and evaluate eight European RFID pilots targeting multiple sectors across six European countries


Boost the adoption of RFID technology by wide SME communities

Create business opportunities for innovative RFID solution providers within the EU

Demonstrate and evaluate tangible benefits of RFID technology across many different sectors and business cases.

Disseminate the results to wider SME communities in the form of case studies, best practices and blueprints.


Domain Country Solution Provider

End-User

Worker safety Italy SATA BRIDGE 129Document management Italy SATA RETE

Electronic ticketing Denmark RFID-SPE DUFCable Trading Logistics Bulgaria BALKAN CABLECOMInter-Enterprise Apparel Greece SENSAP STAFF Jeans

Intelligent Manufacturing

Greece SENSAP KOSKINIDIS

Tracing plastic products Spain ALU PICDA

Security Systems and Processes

UK SERO SOVEREIGN


Business Objective:◦ Identify intruders entering the building yard

Approach: ◦ “Smart pole” which can be placed in different

places on the border or inside the building yards

◦ One or two UHF antennas, one infrared sensor, one telecamera.

Benefits & KPIs:◦ Immediate identification of authorised

persons◦ Immediate identification of authorised trucks◦ Immediate notification of possible intruders to

the control room◦ 100% success in identifying persons and

means within the “smart pole” visibility area◦ Reasonable set-up time for smart pole

positioning and tuning◦ Reasonable “total cost of ownership” for the

construction company (hw, sw, services)


Business Objective:◦ Achieve a satisfactory RFID enabled electronic document and dossier

management, applicable to a variety of document classifications and related handling processes.

Uses AspireRFID Open Source Middleware and Tools Benefits & KPIs:◦ Number of tracked RFID folders vs customer number◦ % of time spent in calling customers for missing documents ◦ Time spent by a folder to pass from status “opened” to status “ready for tax

computation”◦ % of automated checking by e-mail ◦ Number of overtime related to tax declaration◦ Faster search for a single folder ◦ Faster inventory of folders in a container◦ Immediate identification of bottleneck in folder management◦ Immediate update of the folder status◦ Decrease of mis-placed documents◦ Fast issue of requests/notifications to customers


Business Objectives:◦ Tourist Relationship Management◦ Optimize sales and service on the destinations using RFID instead of

conventional papers Benefits & KPIs:◦ Increase mobile sales to customers at the destinations, Minimize irregularities

in accounts and ports on destinations, Reduction in administrative costs per sold travel

◦ Easier to hire new guides, More valid data sets for settling with partners◦ Technological trendsetters for the travels agents, new standard for business◦ Improved safety in transport and at destination


Business Objectives:◦ RFID Enabled Stock Management

(Logistics)◦ Resistance to hostile environment; ◦ Possible storage of large amounts

of information; ◦ Long life of the tags and possible

multiple use; ◦ Reading without visual contact

Benefits & KPIs:◦ Fewer leftovers from the cables◦ Faster order completion◦ Informed decision which roll to

use/cut◦ Faster labelling◦ Decreased average time to locate

and confirm the right drum


Business Objectives:◦ Automate and control a manufacturing

processes◦ Document the product state and the

related production processes, as well as the status of machines, tools and other production resources,

◦ Document, track and trace the performance and quality of the production process

Benefits & KPIs:◦ Reduced manufacturing costs (batch

control/execution)◦ More accurate quality control of the

finished products◦ Improved quantification and performance

management◦ Reduced inventory and supply chain

management costs


Business Objectives:◦ Leverage Existing RFID

Deployment/Investment in the company’s distribution center

◦ Improve Customer Services, Marketing, Promotion & Increase Sales

Benefits & KPIs:◦ Improved customer services

through automatic check-out, better management of returned items, added-value services (e.g., smart mirror).

◦ Improved customer loyalty management

◦ Improved stock management of the apparel products, based on stock visibility at both the central warehouse and the retail stop.

◦ Better promotions management◦ Prevention of counterfeiting


Business Objectives:◦ Interpreter of RFID pulses capable of

extracting meaning of the signals received in the context of a warehouse of the plastic film industry

◦ Generating less waste ◦ Maximizing the stuff at the coils and

facilitating the location of materials and products in the store

Benefits & KPIs:◦ Number of bags fabricated with wrong

materials◦ Number of manipulation mistakes (coils

taken by mistake which increments manipulation costs)

◦ Number of coils lost (coils that cannot be found at the moment we need it)

◦ Percentage of orders out of time◦ Total operating costs in warehouse◦ Direct costs per sales unit


Business Objectives:◦ Electronically record the

location of a security guard at a given time and location using a NFC tag and NFC handset

Benefits & KPIs:◦ Sending alerts from the system

in a correct fashion and in the correct timescales

◦ Consistent use of the system by the security guards

◦ Time saving by the generation of electronic timesheets

◦ Cost saving by the generation of electronic timesheets

◦ Customers visibility of adherence to service level agreements


Hardware Considerations:◦ Variety of options, models, capabilities, costs◦ Testing and Site Survey are important steps

Middleware Considerations:◦ Middleware Suite vs. Software Development (from scratch)◦ Open Source vs. Commercial◦ Integration Capabilities of the Middleware◦ Available Tools

Architecture Considerations:◦ RFID-ROI-SME has identified building blocks◦ Real-time Read Cycles (NFC, mobile readers) vs. Batch Read Cycles

(Logistics Dock-Doors)◦ Wireless/Mobile vs. Fixed Readers◦ Integration with legacy enterprise systems and applications (ERP, WMS,

MRP)

Details on the above experiences to be published in RFID-ROI-SME Best Practices and Blueprint Documents


12/24 months of the project completed

All (eight) pilot systems developed, integrated and deployed

Pilot Operations and Evaluation Phase started

Early Best Practices and Considerations associated with the technical implementations available


End-Users Evaluation

Scope: Evaluate the impact and usability of the system (from the user’s perspectives)Evaluators: SME End-Users (and their employees)Objectives: 1) Improve Employee Ease and Productivity2) Realize Business Benefits for he companies

Business & Financial Evaluation

Scope: Evaluate the business and financial benefits of the systemEvaluators: SME End-Users, SME-AssociationsObjectives: 1) Quantify and Measure Business Benefits2) Justify the RFID Investment3) Prove and Boost Sustainability

Technical Evaluation

Scope: Evaluate the technical capabilities of the RFID systemsEvaluators: SME-Solution ProvidersObjectives: 1) Assess and Ensure the Quality of the Ultimate Implementations2) Indentify opportunities for improvement and expansion

Evaluation of Wider Impact

Scope: Evaluate the wider potential of RFID technology in EU and beyondEvaluators: SME-Associations, SME-Solution ProvidersObjectives: 1) Assess the RFID benefits for SMEs in selected sectors2) Provide input to policy development


Usability Evaluation: “Heuristic Evaluation”◦ Discussion, Interviews, Questionnaires

Technical Evaluation of the Systems:◦ System Testing◦ Discussion, Interviews, Questionnaires

Financial/Business Evaluation: ROI Calculators e.g.,:◦ EPCGlobal Calculator (Logistics, Supply Chain Management,

Manufacturing)◦ RFIDJournal Calculator (Apparel)◦ Custom Calculators (by the RFID-ROI-SME project)

Note however the limitations of the ROI methodology: ◦ Inherent uncertainty in the estimation of the benefits◦ Intangible (longer term) benefits cannot be quantified


STAFF: RFID in its central warehouse (as part of the ASPIRE project)◦ http://www.youtube.com/watch?v=DmmC2QJmqNo◦ STAFF extends the benefits to its Retail Shop (in the scope

of RFID-ROI-SME) Item-Level Tagging: The lion’s share is the cost of

consumables

5%1% 5% 1%

14%

60%

5%5%

1% 3% Hardware expense (Including readers)

Software expense

Consulting and systems Integration

Other infrastructure change expense (for readability of tags etc)

Internal project teams

Total annual cost of tags used for production tracking


Reflected on the EPC RFID ROI Calculator Business Issues:◦ Out of Stock, Shrinkage, Product Diversion,

Counterfeiting, Reconciliation and Deduction, Obsolescence

Business Drivers:◦ Product Planning, Direct Store Delivery Activities,

Promotions Management, Operational Efficiency, Track and Trace

SupplierManufacturer’s

Production Facility

Manufacturer’s Warehouse

Retailer’s Warehouse/DC

Retailer’s Store


Benefit due to leadtime (Time from customer order until customer receives the product) reducAverage order leadtime (time from order placement to receiving) without RFID 45Fraction of total order leadtime for locating inventory & picking right products 20,00%Reduction of above fraction due to RFID systems 60,00%Reduction in order leadtime due to RFID 5,40% reduction from total leadtime 12,00%Average order leadtime after RFID 39,60% reduction in safety stock due to reduction in leadtime 6,19%Savings due to safety stock reduction (annual holding cost) 135,47 €

Other benefitsAnnual savings due to improved production layout due to RFID enabled automation 1.000 €Annual savings due to process re-engineering with RFID at the factory / warehouse 1.000 €Increased throughput due to shorter lead-time (% of current revenues) 0,05%Annual increased revenues due to increased throughput 12.155 €

Total benefitAdditional revenues 12.155,06 €Reduced Costs 242.135,47 €

Benefit due to automationAverage time (in seconds) required for each bar-code scan 15 Average number scans per day 10.000Fully loaded direct labor cost rate for personnel involved in scanning 30 €Number of working (business) days per year 240% reduction in cost due to automated scanning 80,00%Total time spend for scanning (seconds per day) 150.000Current cost of manual scanning / recording operations 300.000 €Savings due to automation with RFID 240.000 €


Overall Positive ROI - Five year discounted NPV almost 150000€

For RFID-enabling only a few processes:◦ Receiving Goods, Shipments, Inventory

Anticipated Benefits from deployment at Retail Stores

But: The cost of tags/consumables is still high◦ Even if it is decreasing

The more RFID enable operations deployed the better ROI◦ Quick Wins can be achieved with few operations◦ Benefits are Maximized when more operations are RFID-

enabled◦ Start Small, but think Big!


RFID-ROI-SME has already deployed eight different pilot projects◦ A systematic evaluation will follow

RFID yields business benefits for SMEs:◦ In a number of different sectors◦ The more operations you RFID-enable the greater the

benefit RFID strategy needed

◦ RFID-ROI-SME will attempt to quantify them◦ Still the cost of the tag can be problem for item-level

tagging RFID could be a vehicle for growth in Europe RFID-ROI-SME will share its experiences with SME

communities and beyond


For more Information:◦ Project Web site: www.rfid-sme.eu◦ Coordinator tel: +32 2 2307599◦ Coordinator e-mail: [email protected]

http://www.rfid-sme.eu/�

