radio frequenc version3
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Information Techniques in Supply Chain Management
Instructor: Dr. Dan Shunk
Ashu: Electrical EngineeringArjun: Industrial EngineeringFan Li: Industrial Engineering
Arizona State University, Tempe, AZ
Mapping supply network
Functions of logistics– Inventory – Transportation– Handling– Information communication across all the layers
Plant
Plant
Plant
supplier
supplier
PORT
PORT
Ref: http://mba.tuck.dartmouth.edu/digital/Programs/CorporateEvents/SupplyChainThoughtLeaders/session4Slides.pdf
Warehouse
Warehouse
Warehouse
Warehouse
retail
retail
retail
retail
Why to optimize a supply network
Inefficient structures and processes lead to more cost and risks and lower
performance and distribution efficiency
Optimized structures helpto proceed towards a
sustainable development
Optimized structures allow for:– Lower transport costs.
– Less stock necessary.– Shorter delivery times.– Optimized logistics facilities
for more efficient operations– Better performance for
more efficient logistics
How to optimize logistics networks?
Different levels of optimization approaches:
Technical level– Improvement of vehicle technology; use of
alternative fuelsPart1: Arjun
– Information sharingPart2: Fan Li
– Use of RFIDPart3: Ashu
Tactical level & Strategic level – Planning of efficient logistic networks.– Selection and combining of different
transport modes etc.
Alternative fuelstechnologies
Arjun
Reasons to shift to alternative fuels:
Reducing fuel consumption and emissions
Limited supply of gasoline and rapidly growing demandfor it in the emerging global market
The United States imports more than 60% of its petroleum, two-thirds of which is used to fuel vehicles in the form of gasoline and diesel
With large countries such as India and China industrialisingthe demand for petroleum based fuels will soon exceed the supply
Use of alternative fuels is critical to reducing dependence on foreignoil and improving air quality.
Global increase in greenhouse gases .
What is alternative fuel?
Alternative fuel is the choice of any fuel otherthan the traditional selections, gasoline and diesel.
Types of alternative fuels:
Biodiesel
Electricity
Ethanol
Hydrogen
Methanol
Natural gas
Propane
What is biodiesel?
Biodiesel is a renewable alternative fuel produced from a wide range of vegetable oils and animal fats
Pure biodiesel or biodiesel blended with petroleum diesel can be used to fuel diesel vehicles, providing energy security and emissions and safety benefits.
It is a cleaner replacement for petroleum based diesel fuel.
Biodiesel has physical properties similar to those of petroleum diesel
Biodiesel Production
Benefits of using Biodiesel
Biodiesel contains 3.2 times the amount of energy it takes to produce it.
Domestically produced
Clean burning
Non-toxic
Can be used as substitute forDiesel fuel in diesel trucks withminimal modifications to the engine(low cost implementation)
Natural gas:
Natural gas is a mixture of hydrocarbons, predominantly methane (CH4)
Natural gas has a high octane rating and excellent properties for spark-ignited internal combustion engines
It is non-toxic, non-corrosive, and non-carcinogenic
Only about one tenth of one percent is currently used for transportation fuel.
Ethanol
Ethanol is a renewable transportation fuel primarily made from starch crops,such as corn
It is also made from sugar beets and cane or cellulosic materials, such as fast-growing trees and grasses
Nearly one-third of U.S. gasoline contains ethanol in a low-level blend to reduce air pollution
Ethanol production:
Dry mill production process
Advantages of using Ethanol
Renewable
Domestically produced
Increasing energy security
Reducing green house gas emission
Ethanol production is a new industry that is creating jobs in rural areas where employment opportunities are strongly needed
UPS switch to alternative fuels:
UPS operates the largest private alternative fuel fleet in its industry
UPS’s long-term goal is to minimize dependence on fossil fuels by improving operational efficiencies and advancing new technologies
The company’s emissions reduction strategy includes reducing fuel consumption and deploying alternative fuel and low emissions vehicles.
Information Sharing for Supply Chain Management
Fan li
Information Sharing for Supply Chain Management (SCM)
Introduction: information technologies for SCM
– Requirement– Benefits
A Information Sharing Model: Inter-organizational Information System (IOIS)
– Definition– Benefits– Levels
Case Study: Application of IOIS
(I) Introduction
Integration of SCM with Information Technologies (IT)
– Earlier work: separated the physical processes and information flows.
– More recent research: incorporated information flows into SCM and achieved the integration (Rachna Shah, 2002).
Impact of IT on Supply Network Collaboration
– Information and information technology are important to the success of supply chain management initiative (Zafer, 2001).
– The prime benefit of applying IT to SCM is the time compression and improvement of data accuracy (since data needs only to be entered once) (Malone, 1987).
(II) Interorganizational Information System - IOIS
A key step in supply chain collaboration is to share information among supply chain partners (Zhenshen Huang, 1999).
Intraorganizational vs Interorganizational– Intraorganizational: all the processes are integrated within
a business. – Interorganizational: integration is carried out over the
whole supply chain. Definition of IOIS
– The information systems that cross organizational boundaries linking one or more independent organizations (Barrett and Konsynski, 1982).
The Benefit of IOIS– To enact the SCM strategy effectively: It is suggested by
several authors, see (Johnson, 1988; Malone, 1987), that the use of IOIS can reduce the time-to-market, cost.
– To speeds the application of modern management tools and philosophies such as Just-in-time systems, concurrent engineering concepts, and various inventory replenishment schemes.
Levels of IOIS
The development of IOIS has taken place over the past 40 years and can be categorized into four phases (Shore, 2001)
– Phase one: includes paper copies of purchase orders, bills and invoices. In this phase, information technology does not contribute significantly to the information system. Still be used in some small companies.
– Phase two: the development of EDI had a dramatic effect on the automation of information flows. Issues: Expensive & Scalability;
– Phase three: This phase describes a more integrated approach. Enterprise-wide systems and databases are integrated. ERP;
– Phase four: In this phase, the supply chain is designed with extensive two-way information flows. Use of web development technologies such as XML and Java – true IOIS
(III) Case Study: Application of IOIS
usually involves implementing an information system, facilitates information sharing and coordination between internal and external partners in the chain (Elizabeth A Williamson, 2004).
provides a framework for electronic cooperation between businesses by allowing the processing, sharing and communication of information (Haiwook, 2001).
An example in a typical wholesaler – retailer arrangement. Target: reach agreement on specific inventory-level (Rasch, 1997).
(III) Case Study: Application of IOIS
A Interorganizational Information System Model - Rasch, 1997
Manufacturer Database
Retailer Database
Raw Material
Supplier
Manufacturer
Supplier (M)
Retailer (R) Customer
imq irq
,s sq p ,m mq p ,r rq p
(III) Case Study: Application of IOIS
Figure shows the essential framework of the interorganizational model. M buys raw material, produces products, and sells them to retailers. Trading partner R buys products from M and sells them to its customers.
Formally, over the interval of one time period, M buys a quantity of raw material at price from its supplier, decides on a production level and sells some quantity of this product at a wholesale price . Retailer R purchases at price and sells a retail quantity at retail price . Inventory for M is denoted as , and inventory for R is denoted as .
sq t sp t
mq t mp t mq t
mp t rq t rp t imq t
irq t
(III) Case Study: Application of IOIS
Without an IOS arrangement– internal information available to the manufacturer during time t (stored in
the manufacturer database) includes:raw material prices ps, Manufacturer inventory level information qim, the amount of product sold to retailers qm, at a price pm, and internal production levels qp, for that time period.
– Based on this information, Manufacturer estimatesraw material costs ps, internal inventory levels qim,and retailer demand qm, for the next period and makes pricing
decisions pm, and production decisions qp.
– Similarly, internal information available to the retailer during time t (stored in the retailer database) includes
the current wholesale price of Manufacturer products pm, the retailer’s current inventory level qir, the current quantity purchased from Manufacturer qm, the current cost
of goods to their customer pr, and the amount of goods sold qr. – Based on this information, the retailer estimates
future wholesale prices pm, future retail inventory levels qir, future customer sales qr, and makes purchase decisions qm, and customer pricing decisions pr .
IOIS
(III) Case Study: Application of IOIS
A Interorganizational Information System Model - Rasch, 1997
Manufacturer Database
Retailer Database
Raw Material
Supplier
Manufacturer
Supplier (M)
Retailer (R) Customer
imq irq
,s sq p ,m mq p ,r rq p
(III) Case Study: Application of IOIS
With an IOS arrangement – The interorganizational information system (IOS)
opens up the possibility of the manufacturer sharing some, or all, of its internal information with the retailer. The retailer can, similarly, share some, or all, of its internal information with the manufacturer. This arrangement is shown by the IOS interchange arrow between databases in the figure. The functions of manufacturing and retail marketing can be viewed as having a shared information system by virtue of their IOS arrangement.
– The wholesaler can improve its inventory control capability if it has information regarding the retailer’s planned activities in the future. The retailer, similarly, can benefit from knowledge of the wholesaler’s planned production by avoiding out-of-stock conditions due to lack of availability of wholesale stock.
Information Sharing for Supply Chain Management (SCM)
Shah, R., Goldstein, S. M., and Ward, P. T., 2002, "Aligning Supply Chain Management Characteristics and Interorganizational Information System Types: An Exploratory Study," IEEE Transactions on Engineering Management, 49(3) pp. 282-292.
Kilic, Z., Basoglu, A. N., and Oner, M. A., 2002, "A simulation game to analyze impact of information technologies on supply chain management," Portland International Conference on Management of Engineering and Technology (PICMET), Anonymous Institute of Electrical and Electronics Engineers Inc, Portland, OR, United States, pp. 470.
Huang, Z., and Gangopadhyay, A., 2004, "A Simulation Study of Supply Chain Management to Measure the Impact of Information Sharing," Information Resources Management Journal, 17(3) pp. 20-31.
T.W. Malone, J. Tates, R.I. Benjamin, Electronic market and electronic hierarchies, Communications of the ACM 30 (6) (1987) 484-497.
S. Barrett and B. Konsynski, “Interorganizational information sharing systems,” MIS Quart., vol. 6, no. 1, pp. 93–105, 1982.
H.R. Johnson, M.R. Vitale, Creating competitive advantage with inter-organizational information systems, MIS Quarterly 12 (2) (1988) 153}165.
Shore, B. (2001). Information sharing in global supply chain systems. Journal of Global Information Technology Management, 4(3), 27–50.
F. J. Riggins and T. Mukhopadhyay, “Interdependent benefits from inter-organizational systems: Opportunities for business partner reengineering,” J. MIS, vol. 11, no. 2, pp. 37–57, 1994.
Williamson, E., Harrison, D. K., and Jordan, M., 2004, "Information Systems Development within Supply Chain Management," International Journal of Information Management, 24(5) pp. 375-385.
Rasch, R. H., and Hansen, J. V., 1997, "A Design Approach for Analyzing Interorganizational Information Systems," Annals of Operations Research, 71pp. 95-113.
Radio Frequency ID: A case study
Ashu
Content
Technical Aspect of RFID– RFID hardware – Operating conditions and standards– Challenges
Business aspect– RFID logistics environment– How and where – Summary
What constitutes and RFID system ?
Radio Frequency ID is a wide term referred to a system formed by amalgamation of multiple technologies which can catch the data automatically . – TAGS
Attached to the product, vehicle, parts or containers
– Reader Which communicates with the tag on
a wireless frequency
RFID Tag Transponder
Read Only (Factory Programmed) WORM - Write Once, Read Many times Reprogrammable (Field Programmable)
Micro-chip, contains Unique ID Code (UID), memory
Antenna, copper or aluminum, wound or etched
Antenna or reader
Are All Tags The Same?
Basic Types:Active Tag transmits radio signal
– Internally powered memory, radio & circuitry
– High Read Range (300 to 1500 feet) PassiveTag reflects radio signal from reader– Reader powered– Read Range (4 inches – 150 feet)
How does it works
Control Module
Broadcast Interface
Reader
Data
Received
Host Computer
Command to retrieve data
Data sent
to Host
TAGTransponder
Request
TransmittedData
RequestedData
Transmitted
Reader Antenna
Reader broadcasts signal through antenna
Transponder
Transponder receives signal
Transponder is charged with enough energy to send back an identifying response
RFID Operating Frequencies
– Low Frequency (125 – 134 kHz) Used in Access control, livestock, race timing, pallet tracking, automotive
immobilizers, wireless commerce
– High Frequency (13.56 mHz) – Smart Labels Used in supply chain, wireless commerce, ticketing, product authentication
– Ultra-High Frequency – UHF (900+ mHz) Emerging technology, applications still in development
– Microwave (2.45 gHz) Not widely deployed, chipless technology
Differences LF, UHF
UHF FIELD .LF FIELD
Ref to : Craig K. Harmon, President & CEO, Q.E.D. Systems with update by Greg Stewart, President, Allaura, Inc. Courtesy: Josef Preishuber-Pfluegl, CISC AT
UHF has near field reflection issue (holes in the read zone) plus a medium sized back lobe unless engineered.
Read Distance is ½ the antenna length. These are 125 kHz and 13.56 mHz RFID.
Note: New infrared (IRid) passive tags with read / write ,and 6 ft. range now compete with RFID .
Affiliations
The Auto ID Lab at MIT was formed in the 1990’s*
Control of the Supply Chain initiative was transferred to EPC Global in the early 2000’s*
– EPC Global is part of GS1 which is the governing body that gives us the UPC’s we use to identify product today
– Focus was on developing standards and methodologies to be used by the industry
– Electronic Product Code (EPC) was introduced to the industry
*Rfidjounrnal,epcglobus
Failures
Human/environmental failures– Caused by electrostatic discharge (25 kV) in handling– Caused by “slap and ship” operations that may detach the antenna
from the chip– Caused by poor manufacturing techniques– Cold Climate issues of Tyson foods*
– AdhesivesAdherence to product at low temperature during
application and during the life of the caseRelease from liner in cold temperature
Technical failures– Reflection / refraction– Absorption (loss)– Dielectric effects (detuning)– Complex propagation effects
Tyson's Assembly line*
*Tyson foods,herbert Markwardt
Technology has improved– From read-only to read-write– From no memory to 2k, 8k,16k bits– Anti-collision for multiple tags read in the field
Ability to communicate with several transponders simultaneously
– Better authentication between tag and reader– Unique ID 91bit e.g . GTIN *
Header : Company : Object Class : Serial Number
– More sophisticated security algorithms
RFID Is Maturing
Epcglobus,tyson foods Herbert Markwardt
Business aspects of RFID
RFID-based Logistics Environment
Application
Information Services
Retail Distribution
Center
Shipment
RFID Tag
ProductSpecification
Manufacture
Product
Physical FlowInformation
Reader
Retail Store
DaeWon Park and HyukChul Kwon
RFID-based Logistics Environment
Bill Allen Texas instruments
Management Logistics– Managing physical flow
– Warehouse management solution– Vehicle identification– Manufacturing– Parcel logistics– Retail supply chain overall management (end to end
information )
Warehouse Management Solutions
Uniquely Identify, Collect, Sort and Track more efficiently Hard data on pallets, containers, fork lift trucks, equipment & man-hours Data collection in rugged environments where barcodes can’t
Google images
Vehicle identification and tracking
Google images
Parcel sorting
Google images
How is it done ?
Tyson foods case– Could not afford to not tag at the time of shipment
(too ideal for practical purposes).– It is tag at the time of production– Solutions needed to be able to move from tagging at
shipment to tagging at production with minimal modification
Tag Applicator writes EPC information to tag and applies
Printer/Applicator writes label and overlays RFID Tag with label
RFID Tag is read and validated; and, if valid, the information is added to the database Additional
Thompson Research Results
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Track Product
Movement
Inventory Control Theft Reduction
Reduction in Product
Counterfeiting
Point of Sale
Productivity
Rela
tive I
mp
ort
an
ce
Scale (1-5 ) 5 is very important *Thompson Research
How they compare to 2D barcodes
RFID Label 2D Barcode
Line of sight Not required Required
Capacity Low to high Low to medium
Security High Low to Medium
Change Information? Yes – Read/Write NO – new label
Cost (today) $0.10 - $0.250 (in millions)
$0.05 or less
Summary what did we achieve ?
Improved Efficiency – Scan-free reduces labor costs and improves throughput
Increased Accuracy – Product tracking not dependent on human initiation
Reduced Inventory – Increased accuracy and information timeliness supports leaner operations
Improved Visibility – Ability to track and report serialized entity movement throughout Supply Chain
Enhanced Security – Improved theft control and product authentication
Special case Tyson foods– Food traceability, monitoring product life cycle, data for promotions,
pallet management etc….
References and Acknowledgement
Special thanks to Mr. Herbert Markwardt from Tyson foods for providing me the material.
Presentations of RFID referenced – DaeWon Park and HyukChul Kwon Pusan National University. – Bill Allen Texas instruments– R.Kimball DOD– John DiPalo -Vice President, Solutions Engineering– Craig K. Harmon, President & CEO, Q.E.D. Systems– Thompson research
Materials referenced from websites like – www.rfidjournal.com www.epcglobus.com www.wikipedia.com
www.research.thompsonib.com
Questions ?
•Buying and installing readers (about $1,000 each today)
•Buying tags to track products (0.01 cents to $250 today)
•Integrating RFID data with existing back-office systems
•Upgrading network infrastructure to handle RFID data
•Upgrading software applications to handle RFID data
•Ongoing maintenance costs
The cost of deploying an RFID system
The key costs involved are:
12
•60% to 93% in labor costs associated with receiving and checking goods into a distribution center
•90% in labor costs associated with verifying an order’s accuracy before shipping to a retailer
•Up to 36% in the cost of labor in selecting cases for shipping
•Out of stock situations, increasing sales up to 1 percent
•5% to 30% in inventory
•Stocks of un saleable and obsolete goods and chargebacks
Benefits for manufacturers include reductions of:
Source: Accenture, IBM Business Consulting
11
0 1 2 3 4 5 6 7 8
Point of sale, POS (retail only)
Store inventory counts (retail only)
Store receipt (by store personnel, retail only)
Customer or store delivery (carrier)
Pool distribution departure
Pool distribution arrival
Distribution center picking or shipment
Distribution center inventory counts
Inbound distribution center receipts
Manufacturing plant outbound shipments
Manufacturing plant issues or consumption
Inbound manufacturing plant receipts
Inbound consolidation center departures
Inbound consolidation center arrivals
Number of Responses
Current
Next 2 Years
3 to 5 Years
•$5.3 million to install RFID readers in three modern manufacturing facilities and 10 distribution facilities,including $4.25 million for system integration
•$1 million per year in recurring costs, such as buyingtags and maintaining the system
Hard dollar figures
Deployment costs vary widely depending on your operations, but Accenture estimates it will cost: