Thursday, December 30, 2004

RFID In Casino

Casino owners may become the newest members of the RFID bandwagon. They show a keen interest in the technology as a way to trackcustomers from the moment they hit the gaming tables. And the purchase of two patents by a large manufacturer shows they will not miss out on the 21st century technology. Shuffle Master, a gaming supply company headquartered, in Las Vegas, Nevada, recently purchased two RFID-related patents for $12.5 million.The company specializes in providing utility products to casinos, such as automatic card shufflers. But it also carries its own proprietary table games for casinos. The patents’ seller was Enpat, a licensing agent for the inventors, explained Paul Meyer, Shuffle Master's president and chief operating officer. "We did a lot of due diligence. We looked at over 400 patents to make sure we identified the correct ones," he added.
-The first patent is for RFID-enabled gaming chips. A casino could track the chip from the time it was first played to the time it is cashed in.
- The second patent is for the gaming table tracking system that monitors and records all gaming chip transactions in a casino. Both patents were originally filed in 1995.
"At last year's Global Gaming Expo, we were showing an intelligent table system," said Mr. Meyer. "At that time our product was based on optical technology, but we later decided that one size fits all made no sense because many casinos had different needs. We went on a modular development role and earlier this year concluded that the technology of the future was RFID. It offers 100% accuracy and is superior to optical. The purchase of these patents demonstrates our commitment to bring reliable and integrated RFID technology to market for the benefit of our casino customers." Gaming Partners International Corporation (which makes RFID readers and chips) will retain its exclusive license for the use of these patents in the manufacture and sale of RFID gaming chips and readers, according to Shuffle Master. "Mikohn (a Shuffle Master competitor) has a few placements of RFID. They've been trumpeting RFID for quite some time. With our acquisition; Mikohn would be a licensee of Shuffle Master," said Mr. Meyer.
Even with the minimal placements of RFID chips and tables in casinos thus far, Mr. Meyer thinks the field is still very wide open. "There are some 42,000 gaming tables in the world. That means lots of room to grow." He's looking at the end of the fiscal year, which, for Shuffle Master, is October, "that we'll certainly have something to demonstrate at the Global Trade Show." The downside to a Casino for RFID implementation, he said, is that it "would require an investment because they would have to re-rack their casinos." Case in point: a conventional chip without RFID costs about 90 cents, he said. With RFID, that cost would jump a dollar, to $1.90 a chip. "I've been told the average cost to a casino (to upgrade) is $250,000."
So how do RFID-enabled chips and tables work :"Say I sit down at a black jack table and I have a player's card. I place it and a $100 bill on the table. My card is swiped which places me at that table," explained Mr. Meyer. (A player's card is another way for casinos to track frequent gamblers. They earn points on the card for free meals, or other rewards.) Without RFID, "as I play over time, the only way the casino can estimate the kind of player I am, is by using pit boss estimates. That's a pretty rough estimate. That's where table tracking comes in. Every chip is associated with me and is tracked using a reader. Exactly what I'm betting and losing or winning is tracked automatically. Without tracking, they (casino) don't know what I'm betting." In other words, the reasoning behind RFID utilization is that the casino will know what every player is doing at every table.
"Say you move away from one table with $500 in chips. You now go to cash in those chips. Those RFID chips can be read at the cage and associated with you. In your moment of generosity, you give a cocktail waitress a $25 chip. When she cashes it in, we know how generous a tipper you are." But not only does RFID allow casinos to track players, it also can track employees
Another example: "If a dealer during a shift change tries to leave the table with a $100 chip, he'd be caught," said Mr. Meyer. "Every chip has a unique serial number, which is tied to the player card. If I don't have a player card, it's difficult to associate an RFID chip with me, but a very high percentage have player cards," he added. If the player doesn't have such a card, he would simply give the dealer his first name and last initial before buying the chips and they'd be tied to him in that fashion. In conjunction with RFID table tracking, "that literally means tracking player performance at the table and all around the casino," said Mr. Meyer. "There has been an enormous amount of attention given to this," he added. "New technology takes time to be adopted and I think it's very clear that Shuffle Master's reputation as the leader at deploying technology in the table area" could drive the move towards this new technology. "There has been a lot of buzz. People look at the adoption by Shuffle Master favorably because they know it will be deployed quickly."

Tuesday, December 28, 2004

Radio Tags Will Take Time, Despite Wal-Mart's Edict

NYTimes writes, an year and a half ago,Wal-Mart served notice that it expected its top 100 suppliers to be shipping goods to it with new radio tagging technology by Jan.1, 2005. Excerpts with edits and my comments added :

Wal-Mart's experience so far has served as a reminder that creating the future is not all that easy. With Jan. 1 just days away, the technology is not yet ready to meet the needs of either Wal-Mart or its suppliers. The tags, which are typically about the size of a credit card and contain an antenna and microchip encased in plastic, receive query signals from scanning devices called readers. Using the energy captured from those signals, they broadcast a snippet of code identifying the goods to which they are attached.
To date, most of Wal-Mart's suppliers have not figured out inexpensive ways to automate the printing and application of the tags
. Although read rates are improving, no one who uses the technology has systems that can reliably read the information 100 percent of the time in factories, warehouses and stores; Wal-Mart said the rate was around 60 percent in its stores. Nor is the data currently integrated well enough with other technology to initiate changes in manufacturing or shipping schedules that could actually save the large sums of money that would make the investment worthwhile. Wal-Mart's official position is that it is working closely with suppliers, meeting its goals and learning valuable lessons that will pay off as the technology continues to roll out. But analysts who regularly survey major consumer goods companies said that most participants were cooperating with Wal-Mart out of fear of offending the retailer and were, as much as possible, putting off investments in the technology.
"The big manufacturing companies have advocates for the technology who are very positive, but the people on the floor who are implementing it are much more negative," Kara Romanow, an analyst at AMR Research,said. Wal-Mart's goal was to wring billions of dollars from the supply chain by using the tags to keep shelves filled with whatever consumers were buying, cut back on shipments of other goods and combat theft.The mandate was soon defined in narrower, more practical terms as supplying tagged cartons and pallets, not individual items, to a limited number of stores through just three Texas distribution centers by the Jan. 1 deadline. Wal-Mart said recently that more than 100 suppliers would be tagging bulk shipments to the three Texas centers next month. But only 40 will be tagging everything they send. Of the remainder, two have been so tied up in a complete overhaul of their entire information technology infrastructure that they have put off attempting to introduce radio tagging. Some suppliers will be tagging as little as 2 percent of the goods going to the centers.
"We think the average supplier will be tagging about 65 percent of the volume they ship to the three centers," Linda Dillman, the chief information officer of Wal-Mart, said. AMR, the research firm, said it had found that companies were investing $1 million to $3 million to comply with Wal-Mart's program, far less than the $13 million to $23 million that AMR had estimated in August would be needed for fully integrated systems that generated useful data.Some companies delayed getting started for so long that they are now having trouble getting tags, according to the analysts and Wal-Mart. That problem is expected to recede next year as tag manufacturers expand their production lines. An important stimulant to that came last week, when a next-generation standard for tags and readers was ratified by EPCglobal, a nonprofit industry group. Heavyweights like Texas Instruments and Philips that had not made the first-generation tags plan to enter the market with the newer technology.
Although the progress has been slow, it has an air of inevitability. Radio tagging, known as RFID (for radio frequency identification), has been spreading through the economy for decades in applications like automated toll collection, tracking tags for animals and wireless cards controlling access to buildings.But the technology was not widely publicized until Wal-Mart announced its deadline. Subsequent decisions by other merchants like Target,and Best Buy to push for radio tagging made it unmistakable which way the wind was blowing, at least among retailers. The movement toward radio tags on consumer products gathered momentum when the Defense Department also set a Jan. 1, 2005, deadline for its major suppliers of a broad range of general merchandise and endorsed the tag and scanner standards being developed by a consortium of retailers and major suppliers like Procter & Gamble and Hewlett-Packard.In addition, drug companies are expanding pilot projects of applying radio tags to pharmaceutical shipments. The Food and Drug Administration has set 2007 as its goal for general use of the technology. Separately, Boeing and Airbus are working together on standards for tagging the 5,000 or so aircraft parts that are most frequently handled by airline maintenance crews.

Wal-Mart and other retailers, and many manufacturers, are excited about the technology because the tags can store more information than bar codes, and large numbers of them can be scanned at one time. In addition to its top 100 suppliers, Wal-Mart is working with 38 others that have volunteered to be in the first wave of vendors complying with its mandate. But the pilot testing this year has offered evidence that, before most businesses can justify big investments in the technology, its costs must fall sharply and the scanners must be able to read tags faster and in more varied conditions. To drive down costs, manufacturers want the recently adopted American standards to be made compatible with those being developed elsewhere. Still, if the size of the challenge became apparent in 2004, so were the ways in which it could be tackled. Wal-Mart and others say that, in 2005, not only will tagging be expanded, but there will also be a sharp increase in the testing of software and business strategies that use the data captured from the tags.


2005 : RFID - More Surprises Behold

(via RFID-Weblog) ABI Research has recently come with a report on RFID technology: "What Isn't Going To Happen in 2005" (complimentary registration required). Excerpts with edits and my comments added :

Entire enterprises and global supply chains will NOT be rebuilt by RFID in 2005.RFID technology continues to make steady, progressive headway into consumer goods and retail deployments. 2004 was a banner year for new product releases, service offerings, and overall market education. The RFID market is steadily growing and offers loads of promise as the first iteration of intelligent sensor networks. However, the technology has a long way to go to make a measurable difference within its adopters' supply chains and all will not be answered in 2005. If 2004 was the year of technology advancement, discussion, and frustration, 2005 will be the year business process adaptation dominates RFID planning and discussions. Where technology was dependent on EPC standards, process change involves much more than the EPC global network. Process adaptation implicates enterprise software and application vendors as well as systems integrators, who will have more than enough client conundrums to address.

Too much attention has been focused on January 1, 2005 and two little attention has been directed to the remaining 364 days in the year. As of December 1st, 2004, EPC Global has yet to finalize a standard and has yet to work out the China standards issue that will be critical to source tagging interoperable EPC-based cases and pallets overseas (Note : New Gen 2 standards have beem since announced - we recently covered this here). Moreover, Wal-Mart and the Department of Defense have underestimated the standards gridlock caused by Intermec's intellectual property claims -- claims that are, contrary to its public relations spin touting a 60-day royalty-free window -- prohibiting long-term RFID investment planning at the retail and DOD supplier levels. As a result, supply chain RFID projects and planning have been delayed due to suppliers' understandable concerns regarding the Intermec IP filibuster and its impact on hardware prices and availability.

2005 will provide more of the same for RFID – ups and downs, wins and losses, momentum and bottlenecks. Issues will be resolved, but, from a consumer and defense goods supplier perspective, full scale RFID enterprise integration efforts will remain on the "work in process" list and not the "finished goods" list. Good overview, this blog shall be adding some more related views on this space in a few days.

Sunday, December 26, 2004

RFID Middleware :Ominous Parallel with Mobile Middleware

Recently we covered EPC adopting Gen2 standards and also covered the perspective Full-Scale RFID Could Take a Decade. While intense activities are picking up in the RFID space, Dennis Gaughan of AMRResearch writes about Future Prospects Of RFID Middleware Vendors. Excerpts with edits and my comments added:

In the past few years, mobile middleware emerged that provided a conduit between the multitude of devices and the back-office applications. These vendors had a moment in the sun before getting squeezed by the enterprise application vendors and the large infrastructure vendors. Ominous parallel exist between the mobile middleware market and the market for Radio Frequency Identification (RFID) middleware.
The vendors of RFID middleware will evolve in one of three directions in the next 18 months:
- get bigger,
- get specialized,
- get bought out or go bust

Several factors created the mobile middleware market, and they all apply to RFID:
Device heterogeneity—Mobile middleware had to deal with thousands of different devices with their own peculiarities. Current practitioners confirm that RFID hardware also is unique across platform and brand.
Emerging standards—Mobile middleware had the Wireless Application Protocol (WAP) and evolving generations of spectrum. RFID has EPCglobal, the Gen 2 specification, and ISO.
Product/expertise gaps—Deploying mobile applications on handheld devices was a new frontier, and the established vendors lacked the technology and skills to deliver success. Today’s RFID middleware vendors are right in the middle of most pilots, delivering key technology and knowledge to make these implementations work
These factors will lead to growth in RFID middleware in the next 18 months, but they are not enough to sustain it as an independent market. Ratification of Gen 2 and its broad adoption will accelerate the commoditization of hardware, making device support less of a distinguishing factor. And by that time, the big vendors will have closed the gaps and delivered relative parity of base middleware functions.
The current crop of vendors will evolve into one of three camps:
- Get bigger/acquired—For mobile middleware, the big guys largely built their own because the lack of market demand gave them the time to do so without missing the window of opportunity. This forced more mergers over acquisitions in the mobile middleware space. The demand is there for RFID, so the big guys are more likely to buy their way in this time.
- Get specialized—This is already starting to happen in RFID. The RFID middleware vendors are adding workflow and business process logic on their platforms to give customers more event handling at the edge. Expect these vendors to continue moving up the stack to deliver more out-of-the-box application functionality, either for horizontal business processes (within a distribution center, for example) or vertical-specific applications (like electronic pedigree tracking in Pharma).
- Go Bust —Several of the existing vendors of RFID middleware will not be here two years from now. Even ones with customers today are at risk, since most organizations that bought RFID middleware for compliance are planning to reevaluate their whole implementation in the next 12 months.
The notion of RFID middleware will remain important for many years to customers deploying RFID; however, the landscape of vendors providing the software will change radically in the next 18 months. All high potential his growth segments in the tech world have undergone a similar trend - RFID middleware vendors are likely to undergo such a journey.

Friday, December 24, 2004

EU biometric RFID scheme unworkable!!

The register reports that european plans for biometric passports and visas have been derailed by, er, European plans for biometric passports and visas. A technical committee set up to report to the Council of Ministers on the implementation of a uniform visa format has concluded that collisions between contactless chips in a passport would make the current plans unworkable, reports Statewatch. The basic problem was eminently predictable, and stems from plans for a standard form of biometric identification across a number of different documents, not all of which are entirely controlled by Europe. Notably, the common European passport format is not, if you think about it, entirely controlled by Europe. so how does that work (or not), then?
The technical committee's report commences by saying it is feasible to integrate an RFID chip and two biometric identifiers in a passport "while assuring a high level of security". But what happens when you try to put an RFID biometric visa in the passport as well? This "leads to difficulties for the reader to read out the valid visa in case there are several contactless chips on different visa in the same passport." At the moment Europe's plans for ID consists of two biometric identifiers, facial and fingerprint, for passport and for visas and residence permits for third country nationals. The passport plans theoretically stem from ICAO's standard for biometric passports (which only requires facial) and from US requirements for biometric passports for visitors (again, facial acceptable) from late next year. Next on the agenda are plans for a common format for ID cards.
Conceivably you could produce a compatible system for RFID-readable biometric passports, residence permits and ID, because European control of the standards here makes it at least theoretically possible to avoid collisions between chips. The ID cards/permits would only have one chip on them (provided the permit was a separate card and not in the passport), and the passport system's operation would only become doubtful if other countries started putting RFID biometric visas in them. It considers a number of proposed permutations and finds they're all unworkable, but tentatively puts forward two others that aren't in the current proposals. A "visa sticker and separate biometric visa smart card" could work, but there's obvious potential for losing the card, while a sticker with no chip, but with biometrics in a barcode wouldn't cause collision problems, but would need a different reader, and would only have space for two fingerprint templates, not ten. Basically, the plans are a mess.The report however says that some delegations now wish to wait for the introduction of Europe's Visa Information Service (VIS), which has a target of 2007-8, to produce a fix. The VIS is intended to collect biometrics from visa applicants and store them first on national databases, then on a central EU database, which in theory would mean biometrics could be compared from records rather than locally between bearer and document.

Thursday, December 23, 2004

RFID Helps Enterprises Increase Return On Assets Through Tracking

Informationweek writes, beginning next year,more and more enterprises will look to RFID to get the most mileage and value out of assets that can't easily be tracked with bar codes. Over time, their efforts will yield operating-cost reductions and process improvements. Excerpts with slight edits and my comments added:

For enterprises seeking increased utilization and management of bar-code-challenged assets--tools, machinery, equipment, people, radio-frequency identification provides a new measure of control. RFID tags can help in situations ranging from bulky rolls of paper that can lose their bar-code labels when stored in a high-humidity environment to heating, ventilating, and air-conditioning dampers that are installed with bar codes facing a concrete structure, rendering them unreadable or unreachable for maintenance tracking. In future, enterprises will deploy RFID-tagged assets, creating operational cost reductions (e.g., reduction in missing assets) and operational improvements (e.g., reduced location times) and further, enterprises will tag more than 70% of their assets and generate operating-cost reductions of 1% to 3%. These reductions will be realized through reduction of lost assets, improved tracking of asset maintenance, and protection of assets from theft, fraud, or injury. Asset-management pilots will draw experience from successful RFID asset-tracking implementations such as the tracking of livestock, boxcars, and trucks.Three tag-frequency ranges are of interest for asset-management applications: low frequency 135-KHz tags, high-frequency 13.56-MHz tags, and UHF 433-MHz tags.
- Low-frequency 135-KHz tags are used in one of the largest RFID applications: livestock tracking. RFID lets cattle ranchers track livestock movements without having line-of-sight or perfect weather conditions, both of which are requirements for bar-code-based readings. Cattle are recorded as they move through gates, similar to the way cars are tracked as they move through electronic toll stations. These same low-frequency tags are used to protect other classes of assets.
- 135-KHz tags are in use for many card-key, access-control systems that let employees enter and exit facilities and protect automobiles from theft, as they are part of many automotive anti-theft and key-entry systems. They've also been used to track runners from start to finish in marathons and other races.
- High-frequency 13.56-MHz tags are being tested in applications such as baggage tracking (e.g., Delta Airlines) and site maintenance (e.g., Frankfurt Airport). In the case of baggage handling, the line-of-sight capabilities of bar codes do work. However, it can require more than one handler to locate the tags to scan and load baggage, which increases the overall time it takes to process baggage and increases use of human resources. Site maintenance (e.g. power, telecommunications switching, and mining facilities) has a combination of lost tags and line-of-sight limitations. In this case, bar-code labels attached to installed components such as pumps, valves, or engines can lose their stickiness over time and fall off the item being tracked, or the components and the tag can become covered with dirt and dust, hindering location of the tags. In the world of health care, 13.56-MHz tags will track key assets (e.g., wheelchairs, infusion pumps, and operating-room equipment); in addition, doctor- and patient-tracking applications are in development to enable improved service and safety levels within hospitals. For example, as a means of improving patient safety, tags could be placed on patients, letting health-care providers collect patient-identification data without having to disturb sleeping patients, or the entrances to operating rooms could be RFID-enabled to ensure that the right patient and doctor can gain access to an operating room.
Tag costs won't be the issue for asset-management pilot projects. Unlike tag costs for retailers, consumer-product-tag costs must fall below 5% of the item's costs. In this case, the asset will have a cost that is much higher, making the tag-cost"to-percentage-of-asset-cost ratio much lower and palatable to the enterprise. For example, a piece of medical equipment such as a wheelchair can cost $1,000; therefore, placing a $10 tag on the wheelchair to prevent its theft is an easy ROI calculation, since the tag cost is only 1% of the asset. In some cases, the asset may be of low value but its contents may not be; for example, money pouches used in the movement of currency in a bank or casino. Other asset-management functions that RFID can enable include the accountability of hard-to-track items such as surgical equipment in an operating environment. Successful enterprises will use RFID asset management to create bottom-line shareholder value.

Sunday, December 19, 2004

EPCglobal Generation 2 UHF RFID Tag Standard Announced - Sans Encryption !

EPCglobal announces the much anticipated completion of the UHF Generation 2 air interface protocol as an EPCglobal standard. With the Generation 2 standard now in place, technology providers will create products that will meet the requirements of suppliers, manufacturers, and end users; and industries as a whole can drive EPC implementation with standards-based equipment. The protocol is the technical framework on which all future products can be built, including tags, readers and other technology.
The announcement follows successful testing of prototypes from several technology providers, which illustrated that the ratified standard can meet the EPCglobal community end user requirements, as well as final determination that all intellectual property presented on a licensed basis during the standards development process was not necessary to the standard. Commercially available products are expected the first half of 2005. This is the new standard for RFID tags favoured by both the US Department of Defense and the supermarket giant Wal-Mart for passive RFID tags working at Ultra High Frequencies of between 860Mhz and 960MHz. This promises faster reading of tags at greater ranges than the current generation of RFID tags which have been tested in various warehouse and, more controversially, supermarket shelf trials.

Here is a new perspective This is a global standard that uses frequency and power in a way that complies with the major regional regulatory environments. In addition to improvements in security of the data on the tag, the standard includes the ability to lock the identification fields in the tag, so that they can't be spoofed or changed without a password. It also includes a strong kill mechanism, so retailers and others have the option of automatically erasing all data from the tag as it passes through a reader. However, the standard does not allow for encryption, because one of the user requirements for the standard was that the tags be inexpensive. But security issues will continue to be addressed in the hardware and policy working groups. RFID tags can be thought of as bar codes on steroids. They contain a tiny transponder that, when it comes within distance of a reader, transmits its unique identifier, which can be matched to a database. EPCglobal envisions a unique EPC stored in an RFID tag attached to every item in a supply chain. As the transmission is automatic and doesn't require a line of sight, RFID technology could automate many processes in a supply chain and capture information at new points. Technology research firm IDC considers RFID a disruptive technology, and forecasts the market for related consulting, implementation and managed services to grow by 47 percent in 2004 and reach $2 billion worldwide by 2008. Stratton Sclavos, CEO of VeriSign, the company that won the contract to build the EPCglobal network infrastructure, says that RFID and the electronic product codes they'll contain could transform business as much as the Internet did. "In 1994, it wasn't clear why businesses would use the Internet vs. EDI or private lease lines," he said. "And many of the people who would be the biggest beneficiaries were the biggest naysayers. Right now, people question the value of EPC vs. building all the infrastructure themselves. Once we begin to develop the capabilities, people will wake up and say, 'Wow, that looks like the Internet.'" RFID has certainly crossed the tipping point - we can expect hugr advances in technolog and applications centered around RFID developments for the next five years - RFID product companies( across the spectrum) and professional service companies,well geared with supply chain consultants, RFID application consultants should see huge volume of Business - Without doubt industries employing RFID shall benefit a lot - in terms of increased efficiency and better returns on capital- an index of benefits in many streams like inventory, service levels etc.

RFID Tags That Sense Conditions Of Liquid Substance

( Via ITMedia in Japanese ) Hitachi announced on December 6 that they developed "RFID sensors" that sense temperature, ion concentration, and flexure of liquid substances and transmit data via wireless communication. Potential application areas include healthcare, bio sciences, and supply chains. Communication ranges are 10mm, 40mm or 75mm. The company claims that their RFID sensors are higly sensitive to small changes of sensable conditions.

Friday, December 17, 2004

Walmart : IT Team Of The Year 2004

Informationweek declares Walmart's IT team as the IT TEAM OF THE YEAR 2004. Whats special about walmart's IT team. Excerpts( with edits and my comments added):
Wal-Mart Stores Inc.'s I.T. team is just a couple of weeks away from the first wave of suppliers participating in its ambitious radio-frequency identification project. When RFID-tagged pallets and cases begin moving en masse into three distribution centers in Texas, and data begins to flow from them into Wal-Mart's Web-based supplier-collaboration system, it will be the start of a revolution in supply-chain management. Executive VP and CIO Linda Dillman and some 2,400 people who make up Wal-Mart's Information Systems Division can take credit for leading the charge that already has expanded far beyond the retailer's four walls. A couple of years ago, Wal-Mart was involved with MIT's Auto-ID Center doing field studies on RFID. It was perfect research work, but too fragmented an effort to drive industrywide adoption, Dillman says. "You couldn't try RFID in all the scenarios," she says. So Wal-Mart picked one approach--tagging cases and pallets--and issued an edict to have its top 100 suppliers focus on that for a January 2005 deployment, in the process driving commitment from some major, but hesitant, tech vendors. "That was critical to make the technology work," Dillman says.
Within Wal-Mart, a team of four RFID pioneers (later expanded to eight people) headed by Simon Langford, manager of global RFID strategy, did a lot of the heavy lifting. But both Dillman and Langford point out that the project was possible only because of the support of Wal-Mart's entire Information Systems Division. "There's no sense of pride to solve something yourself," says Dillman, a 12-year Wal-Mart veteran who joined the retailer when it acquired the Wholesale Club in Indianapolis, Ind., where she had been a senior systems analyst. "There is strength in numbers, in reaching out to others."

In the last year, collaboration in the division has fueled some 2,500 projects, from the RFID deployment to rolling out global financial systems that make it easier for stores to more quickly close their books each month, as well as adding features to point-of-sale systems that help Wal-Mart's approximately 1,360 discount stores, 76 Neighborhood Markets, 1,062 Supercenters, and 550 Sam's Clubs nationwide comply with local labor laws.

Indeed, collaboration is critical for speed, efficiency, and innovation. The company has more than $250 billion in yearly revenue and a below-the-industry-average IT budget, relies on homegrown software to run its business, eschews outsourcing, and requires systems to be available for global use. "The [application] development isn't successful if the infrastructure team that builds the physical system isn't successful," says Dillman, 48, whose career at the retailer included manager, director, and VP positions in application development before she became VP of international systems. "The infrastructure team isn't successful if the operations team doesn't know how to measure the system. They all are measured in their success based on the final impact to the business." That shouldn't be a surprise, given that the Wal-Mart culture is to consider every employee a merchant first, and each one's goal is to serve the customer.

"The fun part about working with Wal-Mart [Information Systems Division] is we're treated as business enablers, not computer nerds," says Dan Phillips, VP of operations, data warehousing, databases, large systems, and communications, who was Dillman's first manager at Wal-Mart.In 2005, Wal-Mart's U.S. IT staff is expected to grow between 5% and 6%, and creativity is a core requirement for those who make the cut. Some of that creativity comes out in the company's annual VPI (Volume Producing Item) contest, where various teams within Wal-Mart each pick a product and compete to promote its sales. The totals are tallied in December, and this year, the Information Systems Division has two products in the top 10; for 2005's contest, Dillman is considering choosing Wal-Mart's private-label Great Value powered-drink mix. Some of the division's secrets for boosting its picks: programming messages promoting the items at price scanners located throughout stores and at the bottom of register receipts. "It's part of the way I can prove our technology works," says Dillman, whose likeness in a cardboard figure at retail stores is promoting a contest pick--in her case, Members Mart Detergent at Sam's Clubs.

Typically, the best project leaders get promoted to managers, and Dillman's goal is to foster within those ranks "executives who manage people who manage projects." So Dillman has implemented twice-weekly team-building meetings for her division's senior executives and directors, to promote the idea that "a constant sense of accomplishment means multiple people collaborating in the project from start to finish." Dillman also has added to Wal-Mart's training opportunities a project-management course she believes could generate significant payback by improving developer productivity.

Sunday, December 12, 2004

RFID @ Starbucks

Informatioweek writes, Radio-frequency identification technology could make after-hours deliveries possible, allowing store personnel to concentrate on customers. Excerpts( with edits and my views added):

In retail, good service is paramount for customer loyalty. But when a supplier is knocking at the back door with a delivery during business hours, sometimes a retail clerk has to momentarily neglect a customer to receive it.For Starbucks Corp., radio-frequency identification technology could help address those types of dilemmas. Starbucks has announced that the company is considering using RFID to help with deliveries.Starbucks is looking at a strategy it's calling "dark deliveries," meaning that everything from milk to pastries to roasted coffee beans would be delivered after store hours.

But there are challenges with this new delivery process, including managing physical security and inventory control, so that delivery people "don't walk out with as much stuff as they dropped off," Dettloff,a Starbuck exective says. "So we envision an RFID license-plate signature," he says, that a supplier would use to deliver goods. Using a card, the supplier would gain access to an RFID-enabled system that records the time, disables the alarm, and confirms a supplier's identity before it unlocks the door and lets the person in. Ideally, the system also would record the inventory that's being delivered. "That's not going to happen tomorrow," Dettloff says. "But you can't get the projects going until you develop these ideas."
Starbucks isn't a stranger to RFID--it's piloting technology that uses RFID to secure and track cargo containers. The pilot, used for shipping coffee beans from Guatemala to Seattle/Tacoma ports, began in early 2003. Called Operation Safe Commerce, it tracks 150-pound bags that are loaded into cargo containers for shipping.

Friday, December 03, 2004

Full-Scale RFID Could Take a Decade

Jacqueline Emigh of eWeek reports but full-fledged RFID deployment across outbound shipments, inbound deliveries and manufacturing for a whole product lineup could easily take not just one year, but a full decade or more, according to one early user. As the year 2004 winds down, many product suppliers are looking to launch their first implementations of RFID sometime in 2005. But full-fledged RFID deployment—across outbound shipments, inbound deliveries and manufacturing for a whole product lineup—could easily take not just one year, but a full decade or more, according to one early user.
"This is not a one-year model," Rich Morrissey, director of e-business strategy at American Power Conversion Corp. (APC), said in a recent Webcast called "Getting Ready for RFID: A User Speaks." Instead, full-fledged implementation of RFID (radio frequency identification) is "in the 10- to 15-year-plus category," he told a Webcast audience made up mostly of initiates to RFID. APC, a major producer of back-up power products and services, recently completed an RFID pilot at a couple of warehouse locations involving 18 to 25 products out of its total of 33,000 SKUs. Before final deployment, the company will spend considerable time on gaining an understanding of how to achieve ROI (return on investment), and on how to deal with business process and integration issues.

Morrissey pointed to three main drivers behind the rollout at APC:
- mandates from trading partners Wal-Mart and the U.S. Department of Defense;
- interest among four senior-level executives in evaluating the technology;
- and a "drive for continuous improvement of our business processes and capabilities, leading to delighted customers."

During the WebcastMorrissey gave the RFID newbies a number of tips about piloting the wireless technology, which is geared toward improving inventory control and streamlining the overall supply chain process.

-Planning is critical. For one thing, the reported shortages of RFID hardware such as tags, readers and antennae are definitely real. "From order to receiving took over two months," he said.

-Morrissey also suggested that product distributors obtain outside expertise from consultants if needed. "Spend some money upfront," he said. APC's technology partners on the RFID rollout included IBM Global Services (IGS) and Odin Technology.

-During the planning process, companies should decide which products to test, while also determining test locations. Other issues to be considered include which process areas (receiving, inventory management, shipping, etc.) will be involved; what kinds of data to collect; and how to store the data and integrate it with other IT systems.
Yet some decisions about RFID will take time to reach, according to Morrissey. After about 15 months of RFID involvement, APC has "just started some of [the] discussions and thoughts," he said. "RFID generates a lot of data. All that information needs to be updated. [You also] have to decide what to do with it," Morrissey said.
The products chosen for APC's pilot were "primarily those that fall into a mandated category," he said. APC opted for a "live" test rather than a "lab" test, in that real warehouses are "dirty, cold in the middle of winter, and noisy." APC configured and built four test station configurations: a shipping and receiving portal at the dock door, a pallet wrapper station, a conveyor station and a tag placement/tag performance station. But pilot testers should be prepared for some bumps along the way, Morrissey warned. During its own pilot, APC determined that "the more dense the pallet, the more unlikely it is that you'll be able to read the tag." The company is doing further analysis on how to place and orient the RFID tags, as well as which kinds of tags tend to work best. Radio frequency interference, on the other hand, hasn't turned out to be problematic. "We did pick up a signal from a business next door that had a wireless network," he said. "There was some concern that it would interfere, but so far it has not."

"RFID is disruptive technology," he said. Still, Morrissey is optimistic over ultimately achieving ROI. This hasn't happened during year one, he said, given "the cost of the tags and the volume of business" associated with RFID. "But we certainly do have an RFID opportunity," Morrissey told the Webcast audience. "Initial assessment provides ROI in year 4, or 2009. Some [ROI] may be very specific to a particular customer mandate, and some may be more general."

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