Supply Chain

RFID Software Market Trends

2009-05-09T01:14:58Z

As promised in my last blog, here’s a little more explanation of my take on the current state of the RFID software market. Doing my latest round of research I was reminded that despite the media focus and hype over the last 5 years on passive UHF technology and open loop applications that many now associate with RFID - its LF, HF, active tags and closed loop applications that have been around for more than 10 years that are sustaining the market. Even without the boom growth that was hoped for from Retail compliance mandates and now postponed California ePedigree laws, strong growth is still evident in the market with the overall hardware/software market growing at >10% CAGR, and the software market forecast at >20% CAGR (both according to ABI Research).

I’ve been a strong advocate of RFID for business process improvements, since my Analyst days at AMR Research, where I talked about ‘Instrumenting DDSN With RFID’ back in 2006, the role of Mobile and RFID in ‘Sensor-Driven Supply Networks’ in 2007, and of course the emergence of Microsoft as a major RFID ecosystem driver with the launch of ‘Microsoft BizTalk Server 2006 R2: RFID for Everyman’, in an article I co-authored with one of the true evangelists for RFID, and greatly missed, John Fontanella. It was great to get the opportunity to deliver Microsoft keynote at RFID Journal Live 2009 with Sudhir Hasbe to 2200 attendees who made it to Orlando Florida despite the current economic woes.

So here’s my take on the state and direction of RFID as we approach the middle of 2009:

Business Process Improvement has taken over from Retail Compliance as #1 driver. This hasn’t happened overnight – my last AMR research projects conducted for clients back in 2007 already showed that the real driver behind investments was BPI, and that Retail and DoD driven compliance wasn’t sustaining growth. Recent AMR and ABI research confirms this.
Closed Loop Applications integrated to existing Enterprise Apps are driving ROI.
Closed loop applications are less sensitive to tag prices, and the integration and data management problems are within the control of a single enterprise, and can typically be integrated with existing enterprise apps to drive value. Access Control, ID Documents, Ticketing/Tolls, are good examples.
Killer Apps haven’t emerged – yet, Cross-Industry Apps are driving growth. while there are still many niche industry applications, the revenue, and therefore ecosystem of technology providers and system integrators are coalescing around a dozen or so cross-industry applications where well defined processes are leading to best practices, good case studies demonstrating ROI, and high repeatability.
Beyond Pilots to Multi-Site Deployments – new adoption driven by ease of integration, scalability. Some Consumer Goods companies now have 5 years of experience with RFID, and some of the aforementioned cross-industry closed loop applications have been around for more than a decade.For these applications there’s a pragmatism about the technology, and more focus on the ease and cost of deployment, scalability, and commonality of the platform being used to deploy multiple applications, multi-site.
Software innovation has lagged hardware innovation - Services 10x Software cost. While we’ve seen lots of innovation in tags and readers, RFID projects are still weighed down by the cost of services.
RFID Software Market has evolved from Middleware/Edgeware to Apps/Solutions.
It was forecast by AMR Research, and other Analysts, and we saw further consolidation of the niche RFID middleware vendors in 2008. Not only has the middleware/edgeware been merged into EAI/B2B platforms, but with well defined cross-industry best practices emerging, we’re seeing the dawn of RFID 2.0 business process platforms.
Market Consolidating around RFID Ecosystems.
With very few niche markets large enough to sustain a vendor community, the need to take RFID applications cross-industry, and the need for sustained R&D to keep pace with hardware innovation, RFID ecosystems are developing around large platform providers
More to RFID than UHF. Software support for multi/ Hybrid Sensors.
The software stack now has to support a wide array of RFID readers/printers, as well as barcode, GPS, environmental sensors etc. A dedicated stack for passive/UHF isn’t enough for the range of application opportunities that need to be addressed.
RFID goes Mobile in support of Enterprise 2.0, Manufacturing 2.0, Security 2.0.
By coincidence, I worked on separate RFID and Mobile research projects back in 2007, and decided to cross pollinate some of the questions to test some hypotheses on the combination of RFID and Mobility being a replacement for traditional tethered automation in some manufacturing environments. There was a strong correlation, particularly in Lean manufacturing scenarios. Of course adding mobility to readers as we are seeing on forklift trucks and in handheld devices is expanding the range of deployment options even further now. See the BizTalk RFID Mobile Site.
Cloud/S+S emerging for new generation of Open Loop multi-enterprise apps. In previous posts, I’ve touched on the potential boost that Cloud Computing and the Windows Azure platform offer to address multi enterprise applications – supply chain track and trace being an obvious example. We’ve got a few wrinkles to work out like Master Data Management and Federated Identity Management, but the Cloud seems the logical place to publish, aggregate and disseminate RFID data for many open-loop, multi-enterprise applications, and the technology and business models are developing fast!

Technorati Tags: AMR Research,ABI Research,BizTalk Server,BizTalk RFID,John Fontanella,RFID,Sudhir Hasbe,Supply Chain

RFID Journal Live 2009

2009-05-07T00:50:31Z

In previous posts I’ve talked about the Supply Chain Megatrends being addressed by our customers across Manufacturing and Retail industries, and specifically called out RFID as a key enabling technology for multi-enterprise supply chain collaboration. With our sponsorship and in preparation for our keynote at the RFID Journal Live 2009 event at the end of April, I spent some time researching the evolution and current state of the RFID market, drawing on published data from Research firms, and anecdotal evidence from partners and customers.

Here’s a summary of the Supply Chain and RFID Trends that I presented at Microsoft’s Monday night Keynote address, before introducing American Apparel, Continental Automotive and Vail Resorts to talk about their BizTalk RFID implementations, and my colleague Sudhir Hasbe from Microsoft to announce BizTalk Server 2009.

I’ll expand on these RFID Software Market Trends in future blogs. I’ve already had great feedback on them from partners such as Dean Frew at Xterprise, and Anush Kumar at S3Edge.

Colin

Technorati Tags: BizTalk RFID,BizTalk Server,Events,RFID,Supply Chain

Sensor Enabling Supply Chains with RFID 2.0

2008-12-23T21:59:29Z

In launching our blog, I introduced 10 Megatrends I saw shaping future supply chain investments. One of those was “Sensor Enabling Supply Chains”, and while I wasn’t just referring to RFID, I want to draw everyone’s attention to our recent introduction of Mobile support for BizTalk RFID, and some innovative work demonstrating this capability at the Gartner AADI Conference earlier this week. What was particularly exciting about this demonstration by the Microsoft BizTalk RFID team and S3Edge, was how on-premise RFID captured on premise, was made available in the ‘Cloud’ for multi-enterprise visibility, analysis and collaboration. I posed a few questions to Anush Kumar of S3Edge about what they are describing as RFID 2.0, and the role they see the Microsoft Cloud (Windows Azure) playing in “Real Time Visibility Solutions”:

Colin: In my previous role at AMR Research, the recently deceased (and already missed) John Fontanella and I gave Microsoft a lot of credit for ushering in “RFID for Everyman”, dramatically lowering the cost of RFID middleware, and pushing RFID towards mainstream adoption. However at the Gartner AADI Conference you were talking about RFID 2.0. What’s RFID 2.0, and how does that move us closer to “Sensor Enabled Supply Chains”?

Anush: RFID 2.0 signifies a new wave of rich software applications that utilize Software On Premise and On Device (typically mobile devices) to create, deploy and manage real-time human-workflows that are natural extensions to electronic business processes in a LoB (Line of Business) system. A key aspect of these applications is the also their ability to naturally utilize Services in the cloud to provide federated visibility across enterprises i.e. visualization and execution of real-world workflows that consume and act on real-time data across the extended enterprise. The common trait across these applications is the fundamental shift from complex, custom code to harness the benefits of real-time data at the edge of the enterprise to a more cookie cutter, 80% done, 20% configurable approach to enable enterprise scale multi-enterprise visibility.

As you are already aware, hardware in the RFID space has matured consistently in terms of performance, and capabilities matched by a comparable drop in price over the years. Now, with the advent of the Microsoft RFID platform at the edge and on device the opportunity is ripe for a set of processes (which we call Physical World Workflows or PWF’s) to consume and act on real time data from the physical world, and in turn provide the electronic system actionable information in real-time. The same framework lends itself very well to allow applications to consume not just RFID data, but pretty much any and all sensory or real-time input for the PWF’s to act and execute on, ushering in not just RFID 2.0, but a whole new genre of applications under what you aptly call the Sensor Enabled Supply Chains.

Colin: Can you describe some of the Real Time Visibility System use cases you can address with S3Edge and Microsoft BizTalk RFID?

Anush: S3Edge’s unique service oriented 3 tier architecture utilizes the RFID capabilities in BizTalk Server to deploy Real Time Visibility System [RTVS™] for Work in Process (WiP), Warehouse Visibility, High-Value Asset Tracking, and Product Recalls solutions.

Some examples of use cases we are involved in today across these areas are:

Work-In-Process visibility for complex manufacturing operations

Tracking of Optical lenses, electronic component sub-assemblies, parts used in automotive manufacturing, PCB’s

Operational visibility into warehouse operations

Picking, cross-dock, put away, and shipping operations
Real time inventory of assets

High value Asset Tracking

IT / Datacenter visibility
Tracking of high-value items such as sunglasses, perfumes, jewelry, apparel, VMI in hospitals, oil and gas equipment
Receive, put away, stock taking, reconciliation, in-store display

Proactive & “On Demand” product recall

Closed loop visibility for real time product location
Recall at source to prevent downstream supply chain contamination

Colin: Anush, I’m particularly interested in the concept of supply chain applications “On device, On premise, On demand”. Can you describe what this means and what you demonstrated at the Gartner AADI Conference?

Anush: The 3 tier “On-Device, On-Premise, On-Demand” architecture is a service oriented approach to deploying and executing Software + Services on device, edge, and cloud to harness operational visibility in real time in your business processes.

The moving pieces in this approach are typically characterized by:

1. Execution of Physical World Workflows On-Device to go from tag or sensor observations to actions

2. A central workflow controller On-Premise that is responsible for the design and deployment of the physical world workflows in addition to facilitating remote management of RFID and sensor devices

3. Services On-Demand (i.e. in the cloud) for federated real-time visibility via the cloud. These could be a combination of .NET Services for distributed notifications across firewalls, SQL Data Services for rich data aggregation, and the Windows Azure platform to host applications in the cloud

The “On-Device, On-Premise, On-Demand” architecture thus scales from a basic solution of providing a closed loop On-Premise + On-Device solution for an organization looking to incorporate real time visibility into their business processes within 4 walls to utilizing Software + Services for federated visibility across the extended enterprise, and revolutionizing the notion of real-time visibility on tap.

At the Gartner AADI conference we showcased how a internet scale ‘search and locate’ application to initiate and execute product recall across the extended enterprise could be designed and executed with Software On-Premise and On-Device, and Services On-Demand (.NET Services + SQL Data Services in the cloud). Key features of the RTVS based Product Recall solution that I demonstrated included:

• Enablement of supply chain managers to ask: “Where are my products right now?” and get a response back in real-time from distributed locations across the supply chain

• Publishing of global product recall alerts across the extended enterprise, and enable all affected parties (ex: warehouse managers or retailers) to get an instantaneous snapshot of “Products within my 4 walls that are dangerous”

• Abilities for all affected parties to schedule and execute a recall in-house, and be able to provide status to initiator in a secure manner

Colin: I’m sure there a few cynical readers of this blog wondering whether anyone is actually deploying RFID enabled supply chains “On device, On premise, and On demand”. Anything you can share about real customers and the scale of deployments you are engaged with?

Anush:

Couple of real world customer scenarios I’d be happy to discuss in more detail are around how the S3Edge RTVS product has

1. Enabled a real time approach to picking, cross-dock, put away, shipping, and stock taking operations in a pharmacy chain’s (RiteCare Pharmacy) warehouse, and

2. Automated real-time and human workflow extensions for Work-in-Process manufacturing at a global manufacturing site of custom optical lenses for Carl Zeiss Vision (GKB Hi-tech)

With 10 stores in India and plans for dozens more, RiteCare Pharmacy (India) wanted to make its warehouse operations more efficient before launching its next growth phase. As part of that process, RiteCare wanted to reduce the time required to fulfill store orders, increase order accuracy, reduce warehouse space requirements, and make it easier for workers to locate products. To address those needs, the company chose the S3Edge RTVS™ solution suite for Warehouse Visibility that includes Microsoft® BizTalk® RFID Mobile and Microsoft BizTalk Server 2006 R2. This solution optimizes the placement, retrieval, and flow of products throughout the warehouse and provides real-time visibility of all warehouse operations. As a result, RiteCare cut its order fulfillment time in half, reduced inventory by 60 percent, and increased the accuracy of fulfilling store orders to 97 percent. The entire case study of how this was enabled can be viewed at http://www.microsoft.com/casestudies/casestudy.aspx?casestudyid=4000003224 as well.

At GKB Hi-tech, the issues the customer had to start off with were the following:

1. Orders need to be tracked through a manufacturing process – the orders were typically an average of 1000+ orders / day, not exceeding 3000

2. Manufacturing process has multiple steps, each step is performed at a station

3. Stations have “dwell times” or minimum processing times

4. Stations have thresholds for expected, normal, severe, and critical delays

5. Orders have “planned routes”, deviations from plans are considered exceptions

Real time tracking and human workflow automation requirements such as location sensitive put a way, build to order job assignment, location sensitive bill of materials picking, time and location sensitive job tracking, and shipment tracking were not handled well by the LoB system which was more focused on the business processes being automated such as procurement, invoice and order processing. This often results in issues such as:

· Lack of visibility into which station is processing a particular order at any time, and hence the inability to increase priorities of orders being processed at a station to fix delayed orders in-flight

· Lack of audit trails for orders being processed, especially if it involves a quality control check that resulted in a ‘re-route’ of the order

· Increased dwell times at each station if priority is unknown

· Increased customer promise violations, ‘stuck orders’, inability to get snapshots of processing workloads across a facility etc.

The S3Edge RTVS based solution we provided was able to seamlessly provide work-in-progress visibility in a pervasive but non-intrusive fashion. It is pervasive in the sense that the entire lifecycle of the product creation process is tracked; it is non-intrusive in that the operator does not have to perform any additional steps or be trained on any new technology to realize the value of the solution.

Once the process flow information was gathered using a XL forms based approach to specify the ‘plans’ for the solution, the S3Edge solution provides for real-time decision making and analytics capabilities, in addition to providing data that can be used for further business intelligence. The former enable you to make real-time choices in your plant floor or assembly line, the latter enable holistic business process re-engineering over the long-term. Another business benefit of the solution is to enable product track-and-trace, and recall functionality, where the “pedigree” or origination information regarding the item is made available for decision making at a later point. This can be extremely important in scenarios where you need to identify items that were also manufactured with a particular item, or items that were processed on a particular station.

The above are just a couple of snapshot examples we are engaged in today which are interestingly graduating from a 2 tier [On-Premise + On-Device] solution to a 3 tier [utilizing On-Demand services in the cloud] federated solution. I hope to share a lot more details around these and the other deployments we are working on as they get closer to deployment – let there be no doubt though that the ‘real-time visibility enabled application’ has finally come of age thanks to all the innovation on the platform side from Microsoft and best of breed hardware systems, and is being increasingly viewed as an invaluable asset for cutting operational costs, and providing value added services to customers in the future.

Colin: Thanks Anush. I’m sure this is the first of many blog dialogues we’ll be engaged in!

Anush: My pleasure Colin! Thanks for the opportunity to participate and share some of the work we’ve been doing and look forward to speaking with you soon again.

For those interested in finding out more about Microsoft BizTalk RFID, S3Edge, and the Gartner AADI Conference Demo, we’ve included some links, but would also like to hear from you on the Microsoft Supply Chain Blog.

Links:

Addressing Supply Chain Megatrends with Microsoft Technology

2008-12-05T21:13:00Z

As the WorldWide Director of our Supply Chain Solution Areas, I’m glad to welcome you to Microsoft’s Supply Chain blog. You’ll see from the Bios of many of our contributors, that I’ve enrolled some very experienced supply chain professionals to discuss how Microsoft technologies and applications, and our Partners solutions can help you address your supply chain challenges. In the current economic climate, the supply chain discipline is more important than ever – right balance between supply chain cost and customer service will mean short term survival, and long term growth awaits those with supply chain smarts to get the right balance between supply chain cost and customer service, while those that don’t will succumb (‘crash and burn’, seems a bit harsh, but perhaps a more apt description).

In this inaugural blog, I’ll share 10 Supply Chain Megatrends that we’ve compiled from discussions with our key customers, ISV and SI partners, and the Industry Analysts. I’d encourage feedback as we believe that each one of these Megatrends has an implication on Enterprise Architecture – or without giving away too much about future blog entries, “Multi-Enterprise” Architecture – and shape our investments in enabling the supply chain technology to address them.

The Challenges Facing People, Processes and Technology

First, a summary of the supply chain challenges that customers tell us they are struggling to address with their current people, processes and technology:

· Increased pace of Flat-World operations. In a global, networked economy, and ‘Flat-World’ operations. Supply chain cycle times continue to decrease, while the pace of business change continues to increase.

· Shorter product lifecycles. Global competition and increased customer demands are forcing manufacturers to bring products to market faster and cheaper.

· Product proliferation and complexity. Product differentiation strategies have led to increasingly complex products, produced in numerous configurations, often engineered assembled or manufactured ‘to order’.

· Global, networked supply chain. To deal with product proliferation and complexity, today’s manufacturers outsource much of their production and logistics and participate in a multi-enterprise networked supply chain that requires constant communication and collaboration with their supply chain partners.

· Risk created by increased demand and supply volatility. Today’s ‘Flat-World’ provides consumers with transparency of availability and costs that can create massive fluctuations in demand for products, while extended global supply chains can often be less responsive, creating supply shortfalls..

· Increased regulatory oversight. Manufacturers face escalating regulatory compliance requirements that include full auditability of the source, content, movement, use and disposal of their products, across their increasingly complex and distributed multi-enterprise supply chains.

· Focus on cost reduction and increased efficiency. Despite the increased complexity and reduced cycle times in today’s supply chains, continued cost reduction and constant improvements in operational efficiency are certain for today’s manufacturers.

Ten Supply Chain MegaTrends

Given these challenges, executives (thankfully) no longer equate the Supply Chain Management discipline as simply sourcing materials at the lowest cost. Microsoft Industry and Supply Chain Solution Management teams, in surveying its customers, ISV and SI partners, and consulting with independent Industry Analysts has identified the following Supply Chain investment Megatrends:

1. Supply Chain Performance has become synonymous with business performance as most CEOs recognize the strategic value of supply chain. Supply chain dashboards are being created that provide real-time visibility of end to end supply chain performance, assembling data from internal and trading partner systems

2. Multi-Enterprise collaboration in real-time is becoming a necessity as end-to-end cycle times continue to compress, and partner performance increases supply chain risk. Demand, cost, quality, compliance, delivery and capacity data is being shared through multi-enterprise portals, and aided by unified communications for real-time collaboration on operational events

3. Sensor Enabled Supply Chain, whether through barcodes, mobile devices or RFID, is critical to providing real-time visibility of end-to-end supply chain compliance and performance. Automated data collection is no longer driven by customer mandates. Manufacturers are instrumenting their supply chains in the same way that they automated their production facilities, to increase productivity, flexibility, accuracy, and real-time visibility, that yield positive ROI.

4. Demand Driven Supply Chain leaders are achieving superior financial performance by sensing, shaping and responding to demand faster than their competitors. While there are many cultural and architectural steps to becoming ‘demand-driven’, one of the most prominent are new 360 degree, event driven Sales, inventory and Operations Planning processes that provides multi-enterprise collaboration that facilitates joint value creation with supply chain partners in dealing with inevitable demand and supply spikes

5. Lean Supply Chain thinking is being modified as traditional lean thinking creates increasingly brittle supply chains in today’s complex and highly volatile demand-driven economy. Technology is being adopted to scale lean practices across the enterprise, and adapted to leverage smart math to deal with the complexities introduced by high product mix, high volume manufacturing and highly distributed supply chains. Mobile technologies, RFID, supply network design and modeling, and lean planning and execution are helping achieve the balance between lean and agile supply chains.

6. Supply Chain Business Continuity is being put into sharp focus as outsourcing, talent shortage and increasing demand volatility increase supply chain risk. Supply network design and inventory optimization tools are now run routinely to tune supply chain configuration and operating parameters. Supply chain ‘War Rooms’ are providing highly visual and interactive monitoring of overall supply chain performance and early warning of risks.

7. Low Cost Country Sourcing continues to rise, but decisions are increasingly balanced by consideration of associated increased lead times, poor product quality, and increased supply chain risk. Manufacturers are implementing more rigorous SLAs that require suppliers/contract manufacturers to electronically provide real-time performance data that is monitored on Supplier Scorecards that provide early warning of potential risks.

8. Supply Chain Outsourcing continues to rise. Over 92% of companies surveyed already outsource some aspect of their production, and over 40% intend to expand their supply chain outsourcing, particularly as the complexity of logistics increases, and the supply chain talent shortage grows. Collaboration between trading partners and their outsourced service providers is driving B2B integration between on-premise back office systems and hosted or cloud-based supply chain services.

9. Shifting Demographics are forcing a major redesign of global supply chains. Across all industries, there’s whole-scale redesign of supply chains to balance low cost sourcing opportunities with new regions of high growth. Beyond investment in supply network design tools, the scarcity of supply chain talent is driving investment in global dashboards to maximize productivity of scarce experts, while new intuitive people ready supply chain planning and execution applications are required to guide the workforce through increasingly complex supply chain operational decision making.

10.Green Supply Chain designs are becoming a reality as fuel costs and increased consumer focus on sustainability allow alignment of corporate social and fiscal responsibilities. Manufacturers and Retailers have been quick to recognize the financial benefits that can be achieved from reductions in fuel costs from supply network re-design and more efficient supply chain execution. Some are integrating supply chain design with their product design and carbon footprint reporting, driving the need for enhanced collaboration and reporting from their supply chain partners.

A(nother) Call to Action

I’ll dig deeper into each of the Megatrends in subsequent articles, but I think I’ve provided enough hints in this introduction, that I don’t believe these Megatrends will be well addressed by legacy ERP systems designed for streamlining processes within a single enterprise; or Advanced Planning systems that can’t keep pace with the continuous adaptation and compressed cycle times of today’s supply chains. While we can leave and leverage those investments with the Microsoft Supply Chain Platform (which we’ll also describe in future blogs), there’s a real need for a new class of “Multi-Enterprise Business Applications (MEBA)”, which is where Cloud Computing, Software plus Services and Windows Azure provide some exciting new opportunities. Let’s not fall into the trap of allowing Enterprise Architects (and that usually means ERP Architects), to dictate how we meet the critical real-time multi-enterprise supply chain collaboration needs of our businesses.

Colin Masson