Pete Abell Senior Partner/Cofounder
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Transcript of Pete Abell Senior Partner/Cofounder
Pete AbellPete AbellSenior Partner/Cofounder
The ePC Group, Ltd.Senior Partner/Cofounder
The ePC Group, Ltd.
Making waves……..work
What’s in Store for
Retail Technology
The Retail Conference
March 2004
Pete AbellSenior PartnerePC Group, Ltd
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Agenda
• Retail Technology Trends• Data Standards• Collaboration Areas• Additional Technologies• EPC RFID• Business Issues• Supply Chain Benefits
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Retail Technology Trends
• Standards– Wal*Mart– GCI
• Other Industries/Regulators– Payment– Homeland Security etc.
• Wireless• Store Level vs HQ
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Data Standards• Data standards will impact entire
infrastructure :
• EPC- visibility throughout supply chain– Stores - Limited– Home - On Horizon
• Sunrise 2005
• Data Synchronization
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Payment Methods
• Smart Card Convergence:
• Application Slots- Enable cross-company loyalty programs
• Wireless Options- Major trend in drive-through usage.
Needed for Web-order/store pickup.
• Biometrics- Decrease fraud– Fingerprint and other biometrics consumers
– Employee and supplier verification
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Transportation Management
• Web-based real-time transportation management
• Transportation optimization visibility across the entire supply chain.
• Technology is available now.
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Supplier Collaboration• Collaboration with suppliers enables lowest cost of
goods.
• PTX , CTX or ?:
• Private Trading Exchange• Wal-Mart using Verticalnet/Retaillink• Target using Yantra
• Consortium Trading Exchanges- i.e. GNX, WWRE, Transora
• Extranet- One way to suppliers
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Vertical Partnerships
• Retailer/Manufacturer or Complementary Retailers
– Partner to Broaden Reach to Consumer
• Hypothetical Examples:
– Return Block Buster videos to any Walgreens location
– Amazon.com order delivered to Sears stores for pick up
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Workforce Management
• Employee Information Portal
– Integrate information for closed-loop workflow – Single, role based interface for the store and field
personnel.
• Clientelling Devices•
– Combo PDA/Cell phone or special purpose PDAs
– Retail employees sell to consumers on store floor.
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Advanced Retail Planning & Optimization:
•
• Forecast-based financial/assortment plans,• Attribute affinities between old and new items• Local Market Assortments• Multiple Consumer Channels (e.g. Maytag –
Retailer Sales + Service site)• Integration of Advertising, Marketing and
Promotions (AMP)• Retail Revenue Management
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Brand Asset Management
• Content
• Digital Assets
• Product Content Management
• Specification Management
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EPC RFID Mega-Transformational Impact
• Early Signs of Rapid Adoption $1T in sales– Marks & Spencer, Wal-Mart, DOD, Tesco,
Metro, Target, Albertsons, etc.
– More Retailers to come this year– Supply Chain - First– Large and Small Suppliers– Supermarkets/FMCG – Must Keep Supply Chain
Costs Within Shooting Distance of Wal-Mart
• Scratching the Surface of RFID’s Potential
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Retail Industry Perspective
– Watching Closely– Negative to Change– Unaware of Realities
• Regulatory Bodies Pushing Adoption– Homeland Security - 2003– FDA Counterfeit Drugs - 2004– BioTerrorism Preparedness Act - 2002– COOL– EU Food Act
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150+ RFID Projects (ePC Group Tracking)
• Marks & Spencer – All Fresh Food Trays
– 230 Suppliers 10% increase productivity-
No cost increase• Goldwin Sportswear – Grey Market Reduction –
2% of sales• Findus – Temperature Sensing Frozen
Meat/Chicken/Fish 2 Weeks extra Shelf Life• EU - Tesco, Metro, Sainsbury, Woolworths, Waitrose,
Carrefour, DHL, Nokia, Argos, etc. • US – Wal-Mart, Home Depot, CVS, Target, AHOLD,
Gillette, Kimberly Clark, P&G, UniLever, etc.
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RFID Themes
• Bulk Read, No Line of Sight, Space, Time and Status
• Multiple Industries Beyond Retail/CPG
– DOD, DHL, Payment Systems
• Faster Adoption Item Level– Homeland Security
– Bio Terrorism Act
– FDA Guidelines on Drugs
– High Value Business Cases
• Understand the Technology Choice• Benefits and Savings Counterbalance Costs
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EPC RFID
•A Short Primer on RFID
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EPC RFID Definitions
• EPC - Electronic Product Code– 96 Bits + (128 R/W) – AI + GTIN + Serial Number + Addtl. User
defined data
• RFID - Radio Frequency Identification– The Technology– Frequencies– Range
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Source Marking Technology
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DC/Truck/Store/Home Technology
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Apply the Right Technology to the Conveyance
Layer 5: Movement Vehicle
Layer 4: Container
Layer 3: Unit Load
Layer 2: Transport Unit
Layer 1: Packaging
Layer 0: Item
ActiveRFID
Satellite
Passive RFID
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Level of Automation
Device Cost ($)
Real-time locating sys. (RTLS) $20-100 Two-way active RFID – GTAG $5-$25
Active beacon RFID $1.25-$5.00
Short range passive RFID $.15-.50
Other Satellite
GPS - $75-300
Very short range passive RFID $.02-.06 (EAS)
Bar code - $.001
Semi-Active RFID $.50-5.00
Costs and Types of RFID
Manual entry
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Which offers a large opportunity for value-added solutions
Worldwide
Total Annual Global Supply Chain Spending
$3 Trillion
Estimated Loss and Waste Due to Poor Supply Chain Visibility Per Year1
6-10%
Cost of Waste $180 B – $300 B
1. Carnegie Mellon, Stanford University, AMR Research
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Standards Bodies
• Global Standards designed EAN.UCC- EPCglobal
• Continued Research - Auto-ID Labs - US, UK, Australia, Switzerland, Japan, China
• ISO and ANSI
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Bar Code Differences
• No line-of-sight required• 100-1,000 Tags per Sec Read Rate• Passive & active chips• Read only or read/write (with
‘locked’ sections)• Long & short range• Carrier for sensing devices
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Estimated Total Costs - Supply Chain Today
• Warehouse incl. HW/SW/Integration - $1-2M
• Per Store (50K sq. ft coverage) $100K• HQ Systems $10-40M• Annual Tag costs $.15-.90 per tagged item
(Supplier/Private Label)
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Recommendations• Remember “The Graduate” - Buy Plastic
• Establish Global RFID Policy• Use Professional RF Engineers to assess
problems and suggest solutions• Do not do this just for Wal*Mart• Make it work within your own 4 walls• Look at your own Supply Chain for savings• Establish behavior change leadership • “RFID vendors want to ship silicon not solve
your problem” - John Greaves
Making waves……..work
Making waves……..work