Ross Products Div. Abbott Laboratories

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Ross Products Div. Abbott Laboratories
Ohio University AIDTCIRFID Review July 25, 2006
Bill Hook Brian Armstrong
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Commercial Application of RFID Technology

• Agenda
• Ross Products Div. Of Abbott Labs
• RFID Applications
• From the lab to pilot to the manufacturing floor
  to the DC to
• Strategy and Process workflow
• Key learnings
• Next steps
• Questions?

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Ross Products Div. Abbott Labs

• General Information
• Located in Columbus, Ohio
• A Global Company Abbott Nutrition International
  (11 plants)
• Makers of Similac, Ensure, EAS, Glucerna, etc.
• Part of Abbott Labs (22.3 B Health Care Company)
• Working with RFID since 1999 (RD)
• Lab efforts began in 2003
• First mfg. Pilot in 2004
• WalMart RFID compliance in 2005 6 DCs 600
  stores
• Target 1 DC, 10 stores, Albertsons 134
  stores by 2007)
• Dept. of Defense RFID compliance in 2006/07

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Popularity Score by Google

• David Beckham 1,660,000
• U2 20,300,000
• Paris Hilton 28,200,000
• RFID 41,700,000
• iPod 197,000,000

Why is RFID one of the most widely discussed
topics worldwide today?
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RFID Applications

• Medical Devices
• Tracking and Tracing of Assembly kits

• Assembly
• Aircraft Assembly
• Repair

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Abbott Strategy and Workflow

• Early strategy
• Involve suppliers (corrugate, tags, labels,
  hardware, software) in everything
• Test in lab or limited pilot applications
• Dont disturb manufacturing processes
• Educate key stakeholders on technology and
  applications
• Dont displace existing systems, augment them
• Learn as much as possible from others (EPC
  Global, alliances with others involved in
  mandates or pilots)
• Dont believe the hype, test and re-test to
  generate your results
• Label converters and corrugate suppliers can help
  with RFID tag integrity
• Move slowly and carefully, dont over commit
• Stay close to customers and begin to mine data

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Key Learnings

• As physics predicted.metals and liquids create
  challenges for RFID
• Tag label placement and hardware optimization
  required
• Prepare to handle lots of data and identify
  business applications
• Data analytics can be managed with third party
  software
• Look for an ROI early in the process
• Build performance criteria early and have vendors
  comply
• What you cant see CAN hurt your performance
• Technology has come a long waybut there is still
  much more to come
• Technology users are key in the hardware/software
  development process

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Department of Defense Mandate Abbott Labs

• DoD issued an interim rule amending the Defense
  Federal Acquisition Regulation Supplement (DFARS)
  to include additional commodities shipped to 21
  DoD locations (May 19, 2006)
• Contractors supplying materials must affix RFID
  tags at case and palletized unit load levels
  (Some cost increases may be included in contract)
  
• Class of goods expanded to include medical
  materials and personal demand goods (Many Abbott
  divisions are affected)
• Defense Distribution Depots from Florida to
  California
• Public comment period ended 7/18
• Existing Supply contracts will not allow for
  non-compliance
• Punitive measureslate payments or no contract!
• ASN will be required via several acceptable
  formats (WAWF)
• DoD is using many consultants to support this
  initiative no direct route

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Encoding Process

• Open air encoding on manufacturing lines (Retail
  Mandates)
• Corrugate vendor applies RFID tag/label in high
  speed process
• Utilize case packing process where 1-3 seconds of
  stationary encoding time is available
• Encode and verify in a single step
• Case to pallet association at palletizer via a
  PLC interface
• Multi-mode Operation (Off line DoD Initiative)
• Open air encode, encode apply, print, encode,
  apply, re-associate cases to pallets, utilize bar
  codes or other data matrix codes
• Advanced Shipping Notice is required by DoD
• Also used for promotions, new item introductions,
  etc.

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Integrated Packing Line (Dept. of Defense)
SAP Auto-ID Infrastructure sends Production
Shipping Orders to Middleware
SAP Aii Assigns EPC Codes
Middleware Sends SAP Auto-ID Infrastructure the
Item-Case-Pallet Information
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Production Performance Statistics

• Gen 1 vs Gen 2 Performance
• Hype is real
• Hardware performance
• Middleware
• Tag Statistics
• - Price 0.15 - 0.22 (converted labels)
• - Performance 99
• Data analytics
• WalMart expectations

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Product Tagging Mandates
Case Pallet WalMart, Target, Albertsons
Case, Pallet, Item Dept.of Defense

• Item may be anything
• worth 5000

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RFID Just the Tip of the Iceberg

• Visible Challenges
• Hardware Tag Selection
• Slap and Ship
• Mfg. Line installation

• Hidden Challenges
• Business Process Integration
• Business System Integration
• Support
• RFID Data Management
• Data Synchronization
• Expanded Customer
  Requirements (ASN)

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Basic Functions - Solutions using RFID ERP

• SAP Auto ID Infrastructure Business Context to
  Raw RFID Data
• EPC Number Range Distribution and Mgmt
• Validation
• Enterprise Transaction\EPC MovementAssociation
• Item\Case\Pallet hierarchy management
• Direct and Indirect connection to Devices
• Bar Code enablement (or other code type)
• Business Information Analytics
• Read and Write Rate Quality Reports
• Stock Situation at Different Locations
• Movements across Locations
• Movements at Location by Action Type
• Cycle Time across Locations
• Event Management
• Tracking and Tracing
• ePedigree for compliance to State Drug Pedigree
  requirements.
• Exchange Infrastructure
• Routing and Mapping of RFID information into
  appropriate business systems

Scalable Speed Platform for extended processes
such as ePODPromotion ExecutionProduct Launch
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Next Steps

• Continue with retail compliance expand to higher
  value skus
• Develop an item level tagging strategy (2008-09)
• Move data analytics inside firewall to ensure
  adequate exposure, learnings, and business
  application development
• Continue to learn from peer groups
• Expand pilot applications to track--trace of
  instruments, etc.
• Keep current to hardware technology
• Develop 13.56 Mhz technology for item level
• Comply with international standards
• Continue educational efforts with plants and
  mgmt.
• Find ROI and exploit all possible savings
  applications

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Questions?
Thank You!