Beat Your Competitors Through RFID-based

VMI Consignment Stock and Loan Kit Applications

Trevor Peirce30th MARCH 2011, RFID in Europe Conference, PRAGUE

Prepared for:

• Belgian limited company first established in July 2007• Providing contract consulting• Principle consultant Trevor Peirce, who started as an independent in July 2006

– EPCglobal Standards Director– RFID Standards Director DHL/Deutsche Post– Engineer, Leyland DAF– Naval Architect, British Shipbuilders

• Contracts:– Medical device manufacturer – Express Distribution Company– RFID System Provider – Systems Integrator – Standards Organization/European Projects– European Community– Digital Pen Solution Provider

AVANTA Global SPRLActivities & History

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Winner of International award for application integration of

RFID/GPS/GSM/Sensor

International Collaboration

•EU China IoT Expert Group – European Representative

•CASAGRAS1 & CASAGRAS2 – ETSI IoT Expert – Standards & Security

•GRIFS

•EU Japan ICT Meeting

Policy & Government

•EC Recommendation - Contracted by the EC to improve public notification

Research

•IERC Activity Chain Leader – IoT security and privacy

Standards Development

•ETSI TISPAN – WG7 Rapporteur

•European Standards Organization – EC Mandate M436 Expert

Interoperability & Dissemination

•EU China RFID Plugtest

•EC Thematic Network - Board Member & WP Leader

AVANTA Global SPRLIoT Activities and Experience

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Remotely held inventory at customer which the vendor manages.

Vendor Managed Inventory (VMI) = Customer owns inventory

managed by Vendor

Consignment Stock = Vendor owns inventory until usedRequires Vendor visibility upon:•Consumption•Replenishment/Inventory receipt•Exceptional forecast demand•Inventory status

– Expiry date– Obsolesences– Condition– Central availability or position

Vendor Managed Inventory (VMI)& Consignment Stock

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Advantage for the Customer:•Reduction in administration•Inventory levels optimized to match current demand•Excess inventories avoided

Consumable and/or Reusable Inventory held and often

configured by the vendor to meet the customers needs with non-

consumed consumables and reusable inventory returned to the

vendor

Often involving:•High cost or specialist reusable tools•Specialist reusable tool configuration•Consumables:

• High cost• Short shelf life• Supply restrictions

Loan Kit Service

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Advantage for the Customer:•Availability•Efficiency

• Less space required• Reduced costs of

inventory•Vendor Expertise

Slow notification or oversight•Use•ReplenishmentLack of regular monitoring of condition of inventory•Expiry

– Natural and unidentified– Natural identified but not retrieved– Due to change in condition e.g. sterile packaging

opened

•Position – not where it should be– In the vicinity but not in the correct position– Temporarily removed from inventory (several

seconds – several days)– Lost/Stolen

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VMI & Consignment StockApplication Challenges

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RFID Application

Requirements:

•High Speed Essential

• In Manufacturing

• At Customer

•100% Reliability

•Multiple Tags

•Orientation insensitive

•Secure

•Integration with ERP

Vendor Process Delays and Handling Costs•Identification

– Outbound confirmation– Returns

•Replenishment of KitsCustomer Delays•Information about what has been consumed•Return of items•Mixed kits•Part complete kits

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Loan Kit ServiceApplication Challenges

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RFID Application

Requirements:

•High Speed Essential

• At Vendor

•100% Reliability

•Multiple Tags

•Orientation insensitive

•Secure

•Integration with ERP

• Orthopaedic implants need to be picked for each operation with 100% accuracy.

• Over 1 million individual implants shipped per year to operations. 3% of shipped items are consumed, the remaining items are returned.

• Kit parts are returned muddled and require sorting into shipping units before they could be returned.

• Slow dock to stock process meant that inventory was waiting to be bar code scanned back into stock. This bottleneck caused an increase in the total inventory holding and created a need for overtime to keep up with the large number of returning implants.

• Orthopaedic emergency delivery requirements did not allow time for bar code scanning each implant.

Loaner Kit ServiceZimmer

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Bar Code Verses RFID TagZimmer’s Perspective

• Bar codes and RFID tags have different properties• If the goal is to replace bar codes with RFID tags, we are limiting the

potential of RFID tags while ignoring the benefits of bar coding

Capability Bar Code RFID TAG RFID Benefit

Line of sight requirement for reading

Required Not Required No need to orient all parts on a bench in the same direction in order to scan them

Number of items that can be scanned at once

One Multiple300/sec

Can scan & take inventory of mixed contents of a carton in seconds

Automation & Accuracy

Manual reading required at multiple points

Technology leads itself to production line style automation; while remaining highly accurate

Error free counts at speed

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Contact Details

Trevor PeirceAVANTA Global

T + 32 2 767 4511E avanta@scarlet.be