WEBVTT 00:00:02.430 --> 00:00:05.410 GUEST SPEAKER 1: Good morning. 00:00:05.410 --> 00:00:08.650 It's a real pleasure for me to be with you today. 00:00:08.650 --> 00:00:12.690 Appreciate Steve and Bill inviting me here. 00:00:12.690 --> 00:00:16.440 For those of you that don't know me, for the last six years, 00:00:16.440 --> 00:00:21.240 I've been managing the Gillette Company's EPC initiative, 00:00:21.240 --> 00:00:27.060 and now I'm leading the strategy development and pilot 00:00:27.060 --> 00:00:30.810 implementation of EPC for the entire Procter and Gamble 00:00:30.810 --> 00:00:34.343 company, including Gillette. 00:00:34.343 --> 00:00:35.760 I look around the audience and I'm 00:00:35.760 --> 00:00:38.652 pleased to say that I see lots of familiar faces. 00:00:38.652 --> 00:00:40.110 And I don't know whether that means 00:00:40.110 --> 00:00:42.270 I've been doing this for too long 00:00:42.270 --> 00:00:47.190 or that this technology is really a game changer that's 00:00:47.190 --> 00:00:50.700 going to dramatically alter the way trading partners go 00:00:50.700 --> 00:00:51.990 to market together. 00:00:51.990 --> 00:00:53.940 I'd like to think it's the latter. 00:00:53.940 --> 00:00:56.490 And I hope to share with you this morning 00:00:56.490 --> 00:01:01.020 some learning and some plans that Procter and Gamble has 00:01:01.020 --> 00:01:04.739 to implement this technology. 00:01:04.739 --> 00:01:08.550 Procter and Gamble and Gillette have been supporters of RFID 00:01:08.550 --> 00:01:12.160 and specifically the electronic product code for many years, 00:01:12.160 --> 00:01:15.180 going back to the co-founding of the AUTO-ID Center, 00:01:15.180 --> 00:01:18.150 initially right here at MIT. 00:01:18.150 --> 00:01:21.390 And that led to the development of the electronic product 00:01:21.390 --> 00:01:26.670 code, which has now been turned over to EPCglobal and GS1. 00:01:26.670 --> 00:01:28.800 And I'm thrilled with the association 00:01:28.800 --> 00:01:35.220 that EPCglobal and AUTO-ID labs have to pioneer new research 00:01:35.220 --> 00:01:38.340 and continue to support the development of the technology. 00:01:41.400 --> 00:01:44.970 In 2005, Procter and Gamble and Gillette 00:01:44.970 --> 00:01:48.780 merged to create one company. 00:01:48.780 --> 00:01:51.420 It gives us the proverbial opportunity 00:01:51.420 --> 00:01:54.690 to put one and one together and get three. 00:01:54.690 --> 00:01:58.130 The shared learning of these two companies 00:01:58.130 --> 00:02:01.920 has been combined to develop a unified approach 00:02:01.920 --> 00:02:04.080 to implement EPC. 00:02:04.080 --> 00:02:07.480 And the commitment of both these companies has not changed. 00:02:07.480 --> 00:02:10.970 In fact, it's accelerated. 00:02:10.970 --> 00:02:14.960 It's all about transforming the supply network 00:02:14.960 --> 00:02:17.720 using the EPC to deliver better customer 00:02:17.720 --> 00:02:22.460 service so we know where our products are at all times. 00:02:22.460 --> 00:02:25.220 To generate less loss, less shrink, 00:02:25.220 --> 00:02:28.340 less theft, less products being misplaced 00:02:28.340 --> 00:02:31.340 and not being able to be found. 00:02:31.340 --> 00:02:37.100 It's there to help us have fewer inaccuracies, 00:02:37.100 --> 00:02:43.490 going from assumed receipt to EPC-verified receipt of goods. 00:02:43.490 --> 00:02:46.130 And finally, and critically important, 00:02:46.130 --> 00:02:50.360 to give us greater product availability for consumers. 00:02:50.360 --> 00:02:54.200 As consumer marketeers, Procter and Gamble's number one 00:02:54.200 --> 00:02:57.590 complaint is consumers who come in to store 00:02:57.590 --> 00:03:00.500 and can't find the products they're there looking for. 00:03:00.500 --> 00:03:05.010 And we feel the electronic product code can address that. 00:03:05.010 --> 00:03:07.760 So let me share with you some learning 00:03:07.760 --> 00:03:11.300 from Gillette and Procter and Gamble. 00:03:11.300 --> 00:03:13.760 Both companies have been actively engaged 00:03:13.760 --> 00:03:16.370 in pilots for a number of years-- 00:03:16.370 --> 00:03:19.760 pilots both in-house within our four walls and pilots 00:03:19.760 --> 00:03:21.830 with our retail partners. 00:03:21.830 --> 00:03:24.440 We've done this to test, improve the technology, 00:03:24.440 --> 00:03:28.280 develop scalable solutions, validate the business case, 00:03:28.280 --> 00:03:32.600 and drive deployment to deliver business benefits now. 00:03:32.600 --> 00:03:37.220 We can't do everything we want to do at once, 00:03:37.220 --> 00:03:41.630 but we need to keep moving in ever-increasing increments, 00:03:41.630 --> 00:03:44.660 starting with, what I heard referred to earlier, 00:03:44.660 --> 00:03:46.490 as low-hanging fruit. 00:03:46.490 --> 00:03:51.230 Capitalize on that, generate value, realize the benefits, 00:03:51.230 --> 00:03:56.250 and then capture that learning and move to the next stage. 00:03:56.250 --> 00:03:59.540 Our research, much of which was done with team members 00:03:59.540 --> 00:04:06.140 from MIT, showed that the lion's share of the opportunity 00:04:06.140 --> 00:04:10.140 is the collaboration gains that exist between trading partners. 00:04:10.140 --> 00:04:12.560 We call it the collaboration zone, 00:04:12.560 --> 00:04:15.440 whereby managing deductions management, 00:04:15.440 --> 00:04:17.570 electronic proof-of-delivery, if you will, 00:04:17.570 --> 00:04:21.019 increased on-shelf availability, reduced inventory 00:04:21.019 --> 00:04:24.680 and improved working capital, we can generate serious business 00:04:24.680 --> 00:04:27.060 benefits. 00:04:27.060 --> 00:04:31.160 So we began in January of 2005, with one 00:04:31.160 --> 00:04:36.950 strategic retail partner to prove many of these benefits. 00:04:36.950 --> 00:04:41.750 Our pilots led us to discover that promotional and new item 00:04:41.750 --> 00:04:45.020 compliance was a tremendous opportunity. 00:04:45.020 --> 00:04:46.940 Low-hanging fruit, if you will. 00:04:49.610 --> 00:04:53.360 One pilot we did was with our Venus disposable razors. 00:04:53.360 --> 00:04:56.790 These are our female shaving system. 00:04:56.790 --> 00:04:58.850 This was a new item launch. 00:04:58.850 --> 00:05:02.150 It was supported by heavy advertising. 00:05:02.150 --> 00:05:04.820 It was largely delivered in displays 00:05:04.820 --> 00:05:09.770 because it was an advance of the regular planogram cycle. 00:05:09.770 --> 00:05:13.370 And EPC-enabled displays were shipped to stores. 00:05:13.370 --> 00:05:16.340 And what we found was about 1/3 of the displays 00:05:16.340 --> 00:05:19.370 that we shipped to stores never got to the selling 00:05:19.370 --> 00:05:21.890 floor as scheduled. 00:05:21.890 --> 00:05:25.610 Maybe they got there late, maybe they didn't get there at all. 00:05:28.130 --> 00:05:31.670 What's important to realize is, as a consumer marketing 00:05:31.670 --> 00:05:34.970 company, we had significant marketing programs, 00:05:34.970 --> 00:05:37.940 we had invested lots of money and significant marketing 00:05:37.940 --> 00:05:41.690 programs, as did our retail trading partner-- 00:05:41.690 --> 00:05:44.210 things like advertising, in-store coupons, 00:05:44.210 --> 00:05:48.290 promotional discounts, to generate awareness and generate 00:05:48.290 --> 00:05:51.260 trial of this new product. 00:05:51.260 --> 00:05:54.620 Because a large percentage of the displays 00:05:54.620 --> 00:05:57.830 never made it to the selling floor when they needed to, 00:05:57.830 --> 00:06:04.640 the late execution resulted in a 19% reduction in sales. 00:06:04.640 --> 00:06:09.470 However by using EPC, we're able to generate alerts 00:06:09.470 --> 00:06:13.880 to tell store associates or tell our own retail merchandising 00:06:13.880 --> 00:06:16.850 force that the displays were not where they're supposed 00:06:16.850 --> 00:06:19.440 to be and get them fast tracked to the sales floor 00:06:19.440 --> 00:06:23.360 so we could eliminate idle inventory, we can be in stock, 00:06:23.360 --> 00:06:27.790 and we can generate incremental sales. 00:06:27.790 --> 00:06:31.120 After that, we did another test promotion 00:06:31.120 --> 00:06:34.000 with our Braun Cruiser electric shaver. 00:06:34.000 --> 00:06:37.660 This was done in the Father's Day time period 00:06:37.660 --> 00:06:40.780 in the month of June. 00:06:40.780 --> 00:06:48.990 This also was a promotion that was supported 00:06:48.990 --> 00:06:51.360 by significant advertising. 00:06:51.360 --> 00:06:53.400 It was a very time-sensitive program 00:06:53.400 --> 00:06:55.770 because it had to be on the selling 00:06:55.770 --> 00:06:58.150 floor in a limited window of time 00:06:58.150 --> 00:07:01.050 so consumers could buy these razors as gift items 00:07:01.050 --> 00:07:03.000 to give at Father's Day. 00:07:03.000 --> 00:07:07.950 No one wants to buy a Father's Day present after Father's Day. 00:07:07.950 --> 00:07:11.940 What we found was very inconsistent execution 00:07:11.940 --> 00:07:15.810 of the promotion in the 19 stores that we tested in. 00:07:15.810 --> 00:07:18.540 In fact, only six stores actually 00:07:18.540 --> 00:07:21.990 delivered the promotional displays to the selling floor 00:07:21.990 --> 00:07:23.850 on time. 00:07:23.850 --> 00:07:28.200 Five of them put the displays out on floor at Father's Day 00:07:28.200 --> 00:07:29.610 or after. 00:07:29.610 --> 00:07:32.760 And the majority of the displays-- eight displays-- 00:07:32.760 --> 00:07:36.620 were delivered sometime in between. 00:07:36.620 --> 00:07:40.160 What this meant is that the stores that 00:07:40.160 --> 00:07:45.320 had the electric shavers out, ready for sale, on time, 00:07:45.320 --> 00:07:48.320 had a 61% greater sell through. 00:07:48.320 --> 00:07:52.370 So the opportunity clearly there for a time-sensitive 00:07:52.370 --> 00:07:57.170 advertised promotion to use EPC to deliver these displays where 00:07:57.170 --> 00:07:59.330 they're supposed to be in accordance 00:07:59.330 --> 00:08:04.820 with the promotional plan that the retailer established. 00:08:04.820 --> 00:08:09.200 Now, let me talk to you about the launch of a new Oral B 00:08:09.200 --> 00:08:10.940 toothbrush from Gillette. 00:08:10.940 --> 00:08:14.030 This was a great new item. 00:08:14.030 --> 00:08:16.190 It is a battery-powered toothbrush. 00:08:16.190 --> 00:08:20.840 We had research showing that advertising would generate 00:08:20.840 --> 00:08:22.730 strong consumer demand. 00:08:22.730 --> 00:08:27.110 And that was the results we were getting in all 00:08:27.110 --> 00:08:30.680 of our pre-market testing. 00:08:30.680 --> 00:08:36.440 These displays, when they were delivered to store, 00:08:36.440 --> 00:08:39.860 had a target of making it from receipt 00:08:39.860 --> 00:08:44.930 at the back room of the store to the store floor in 3.8 days. 00:08:44.930 --> 00:08:47.720 However, as you can see, the results were very inconsistent. 00:08:47.720 --> 00:08:50.240 And we were able to track this using 00:08:50.240 --> 00:08:53.240 reads from the electronic product code. 00:08:53.240 --> 00:08:59.180 On average, the store executed this promotion in 8.8 days-- 00:08:59.180 --> 00:09:05.860 significantly beyond the target they had set for themselves. 00:09:05.860 --> 00:09:09.760 What this means as far as a business impact is 00:09:09.760 --> 00:09:15.040 that after the displays actually made it to the sales floor, 00:09:15.040 --> 00:09:18.380 there was a five times daily sales increase. 00:09:18.380 --> 00:09:20.620 So the important thing to keep in mind 00:09:20.620 --> 00:09:23.950 is, when the displays were sitting in the back room 00:09:23.950 --> 00:09:25.810 and the advertising was running, they 00:09:25.810 --> 00:09:28.420 were not working effectively. 00:09:28.420 --> 00:09:31.540 But as a result of having the EPC 00:09:31.540 --> 00:09:34.720 tag on the displays in the test stores, 00:09:34.720 --> 00:09:38.830 tracking those displays, being able to respond 00:09:38.830 --> 00:09:42.160 to automatic alerts generated from the program, 00:09:42.160 --> 00:09:45.400 and moving those displays to the floor when they needed 00:09:45.400 --> 00:09:48.820 to be there, we were able to increase the sales potential 00:09:48.820 --> 00:09:50.260 five times. 00:09:50.260 --> 00:09:55.780 In the test stores, the impact was around 600 lost toothbrush 00:09:55.780 --> 00:09:58.990 sales for inconsistent application, 00:09:58.990 --> 00:10:02.050 resulting in about $3,000 of lost revenue. 00:10:02.050 --> 00:10:06.010 If you multiply that times the opportunity 00:10:06.010 --> 00:10:09.010 across an entire chain of hundreds, 00:10:09.010 --> 00:10:13.810 if not thousands of stores, the lost revenue impact 00:10:13.810 --> 00:10:17.720 can be a half a million dollars or more. 00:10:17.720 --> 00:10:21.610 So the ability to use it to drive value 00:10:21.610 --> 00:10:25.260 on promotional displays is clear. 00:10:25.260 --> 00:10:30.590 Lastly, this past holiday selling season, 00:10:30.590 --> 00:10:36.800 we were able to tag a number of our fast-moving holiday 00:10:36.800 --> 00:10:37.760 displays. 00:10:37.760 --> 00:10:41.810 Duracell batteries, for example, Braun electric shavers, 00:10:41.810 --> 00:10:46.100 what's known as a Tag body spray, which 00:10:46.100 --> 00:10:49.910 is a hot-selling new item that was launched last year, 00:10:49.910 --> 00:10:55.490 and our Mach 3 power shavers. 00:10:55.490 --> 00:10:58.160 We tagged these displays and delivered them 00:10:58.160 --> 00:11:02.120 to 500 stores where they could be tracked for compliance. 00:11:02.120 --> 00:11:07.160 What we found is that 100% of the Mach 3 power stores 00:11:07.160 --> 00:11:10.790 were compliant within 14 days, versus over 20 00:11:10.790 --> 00:11:15.780 days of dwell time in non EPC-enabled stores. 00:11:15.780 --> 00:11:22.290 The EPC-enabled tag displays generated a 91% sell through 00:11:22.290 --> 00:11:26.100 versus a 71% chain wide average, showing 00:11:26.100 --> 00:11:28.980 the impact of EPC being used to make 00:11:28.980 --> 00:11:31.380 sure the displays got to the selling floor 00:11:31.380 --> 00:11:33.240 when they needed to. 00:11:33.240 --> 00:11:38.100 And lastly, EPC-enabled Braun palettes 00:11:38.100 --> 00:11:41.400 had a 30% higher compliance to the sales floor 00:11:41.400 --> 00:11:42.880 than the rest of the chain. 00:11:42.880 --> 00:11:46.470 So by applying EPC tags to these displays, 00:11:46.470 --> 00:11:50.280 we were able to significantly impact the ability 00:11:50.280 --> 00:11:53.190 to move these displays to the selling floor in accordance 00:11:53.190 --> 00:11:57.390 with the promotional plan, which resulted in incremental sales 00:11:57.390 --> 00:12:03.630 for the retailer and for the manufacturer, but most of all 00:12:03.630 --> 00:12:06.480 meant that the customer who came looking for these products 00:12:06.480 --> 00:12:08.460 because they had seen advertising, 00:12:08.460 --> 00:12:11.670 they had received a coupon, were able to find 00:12:11.670 --> 00:12:13.710 the product that they were looking for 00:12:13.710 --> 00:12:15.420 and left as satisfied shoppers. 00:12:17.980 --> 00:12:21.190 So the rationale for the display compliance business case 00:12:21.190 --> 00:12:23.250 is very simple. 00:12:23.250 --> 00:12:27.260 It starts, first of all, from the high value of the display 00:12:27.260 --> 00:12:29.300 versus the small tag cost. 00:12:29.300 --> 00:12:34.070 It clearly does not make sense to put a $0.10 tag or a $0.05 00:12:34.070 --> 00:12:36.590 tag on a $0.39 can of beans. 00:12:36.590 --> 00:12:41.150 However, if you take a $0.15 tag or a $0.20 tag and put it 00:12:41.150 --> 00:12:46.950 on a display that has 25, 50, 100 items, 00:12:46.950 --> 00:12:50.790 then the cost-value ratio is much better. 00:12:50.790 --> 00:12:54.440 We also found from our research, that 15% to 40% 00:12:54.440 --> 00:12:56.600 of stores that were receiving our displays 00:12:56.600 --> 00:12:59.330 were not compliant with the promotional plan that had 00:12:59.330 --> 00:13:02.570 been established by management. 00:13:02.570 --> 00:13:04.700 With EPC, we can correct that. 00:13:04.700 --> 00:13:08.900 We can create alerts that allow store associates to know 00:13:08.900 --> 00:13:11.970 whether displays are in compliance or not. 00:13:11.970 --> 00:13:13.880 And if they're not, go find them and make 00:13:13.880 --> 00:13:16.970 sure they get to the selling floor on time. 00:13:16.970 --> 00:13:19.820 By having displays on the selling 00:13:19.820 --> 00:13:22.130 floor in accordance with the promotional plan, 00:13:22.130 --> 00:13:25.650 we saw a 20% sales lift. 00:13:25.650 --> 00:13:29.880 And lastly, practically speaking, tagging displays 00:13:29.880 --> 00:13:31.080 is easier. 00:13:31.080 --> 00:13:36.300 They're bigger, it's easier to manage physically, read rates 00:13:36.300 --> 00:13:39.960 and tag survival rates are higher because they don't 00:13:39.960 --> 00:13:41.940 go through break pack operations, 00:13:41.940 --> 00:13:46.020 they're delivered straight to the selling floor. 00:13:46.020 --> 00:13:48.990 So the key benefits of moving forward 00:13:48.990 --> 00:13:52.410 against display compliance as a low-hanging fruit 00:13:52.410 --> 00:13:54.900 are very clear. 00:13:54.900 --> 00:13:58.860 It's an opportunity for the manufacturer and the retailer 00:13:58.860 --> 00:14:01.380 to increase incremental sales. 00:14:01.380 --> 00:14:03.420 Improved availability of the product, 00:14:03.420 --> 00:14:05.760 improved visibility of the product, 00:14:05.760 --> 00:14:08.820 on floor when consumers are shopping, 00:14:08.820 --> 00:14:15.270 looking for that product, or to encourage an impulse purchase. 00:14:15.270 --> 00:14:18.630 And the fact of the matter is, in the consumer goods market, 00:14:18.630 --> 00:14:21.530 many, many of our products are impulse sales. 00:14:21.530 --> 00:14:24.930 Men go to retail not necessarily to buy razor blades, 00:14:24.930 --> 00:14:26.730 but they see them, they pick them up. 00:14:26.730 --> 00:14:28.050 The same with toothbrushes. 00:14:28.050 --> 00:14:30.540 So having the display on the floor 00:14:30.540 --> 00:14:34.980 generates incremental sales through impulse purchases. 00:14:34.980 --> 00:14:38.490 Greater shopper satisfaction, which drives brand loyalty. 00:14:38.490 --> 00:14:41.700 The fact that I came looking for a Procter and Gamble product 00:14:41.700 --> 00:14:47.580 and was able to find it keeps me a loyal user of that brand, 00:14:47.580 --> 00:14:50.580 rather than being encouraged to switch to another brand 00:14:50.580 --> 00:14:53.160 because the toothbrush I was looking for, 00:14:53.160 --> 00:14:56.160 the antiperspirant I wanted, or the detergent I wanted 00:14:56.160 --> 00:14:59.500 was not on the shelf. 00:14:59.500 --> 00:15:01.350 It's a better marketing investment. 00:15:01.350 --> 00:15:05.280 It avoids spending advertising dollars, couponing dollars, 00:15:05.280 --> 00:15:08.130 promotional dollars against empty shelves, 00:15:08.130 --> 00:15:10.110 or creating excess inventory because you 00:15:10.110 --> 00:15:14.400 built displays that never made it to the sales floor on time 00:15:14.400 --> 00:15:18.930 and have to subsequently be broken down or returned. 00:15:18.930 --> 00:15:21.510 And finally, decreased labor cost. 00:15:21.510 --> 00:15:25.080 It takes less time to find lost displays. 00:15:25.080 --> 00:15:30.630 Time that then can be turned into more productive activities 00:15:30.630 --> 00:15:32.688 within the retail environment. 00:15:35.320 --> 00:15:39.760 Display compliance is one of the low-hanging fruit opportunities 00:15:39.760 --> 00:15:44.050 that we can go after right now to create immediate business 00:15:44.050 --> 00:15:45.910 value. 00:15:45.910 --> 00:15:51.730 Creating value now to drive adoption, to drive tag volume 00:15:51.730 --> 00:15:55.270 is the cornerstone of what Procter and Gamble and Gillette 00:15:55.270 --> 00:15:58.250 has created as the EPC advantage strategy. 00:16:01.320 --> 00:16:04.710 This is an evolving execution plan 00:16:04.710 --> 00:16:07.440 based on our experience, our knowledge, 00:16:07.440 --> 00:16:12.630 and our focus on delivering value through the use of EPC. 00:16:12.630 --> 00:16:16.620 Our pilots, our shared learning and value confirmed to us 00:16:16.620 --> 00:16:20.700 that we can help both our retail partners as well as ourselves 00:16:20.700 --> 00:16:25.110 work together to better meet and satisfy the shopper, to meet 00:16:25.110 --> 00:16:27.570 their needs and satisfy them. 00:16:27.570 --> 00:16:30.870 Our EPC advantage strategy is designed 00:16:30.870 --> 00:16:34.080 to deliver business benefits, both to Procter and Gamble 00:16:34.080 --> 00:16:37.230 and our retail partners right now. 00:16:37.230 --> 00:16:40.630 Said another way, we can't do everything at once, 00:16:40.630 --> 00:16:44.880 but we can move forward and an ever-increasing, incremental 00:16:44.880 --> 00:16:48.540 way to build value, generate learning, 00:16:48.540 --> 00:16:52.460 and then plan future activities. 00:16:52.460 --> 00:16:58.650 Our EPC advantage strategy consists 00:16:58.650 --> 00:17:02.520 of tiering our products and our product scenarios, 00:17:02.520 --> 00:17:06.599 like display programs, based on the value proposition 00:17:06.599 --> 00:17:10.829 that they generate and their specific product 00:17:10.829 --> 00:17:11.985 characteristics. 00:17:11.985 --> 00:17:15.119 For example, at the very top of the list, 00:17:15.119 --> 00:17:18.130 the top tier is what we call advantage products. 00:17:18.130 --> 00:17:20.760 These are higher value products with strong business 00:17:20.760 --> 00:17:22.770 cases for EPC. 00:17:22.770 --> 00:17:25.230 It could include display modules which 00:17:25.230 --> 00:17:28.079 support time-sensitive merchandise like I just 00:17:28.079 --> 00:17:31.300 described in the business case learning. 00:17:31.300 --> 00:17:34.190 The mid tier, what we would call testable products, 00:17:34.190 --> 00:17:38.290 these are products chosen to support continued testing. 00:17:38.290 --> 00:17:41.830 We haven't wrapped our arms around the business case just 00:17:41.830 --> 00:17:44.050 yet, or maybe some technical challenges 00:17:44.050 --> 00:17:46.220 that we hope to overcome. 00:17:46.220 --> 00:17:48.978 And finally, are the challenge products. 00:17:48.978 --> 00:17:50.770 These are the ones where we really struggle 00:17:50.770 --> 00:17:52.940 to establish clear value. 00:17:52.940 --> 00:17:56.080 These are the ones that have significant technical hurdles 00:17:56.080 --> 00:17:57.290 to overcome. 00:17:57.290 --> 00:17:58.270 They need more work. 00:18:01.330 --> 00:18:03.430 Tiering our products in this way then 00:18:03.430 --> 00:18:06.790 allows us to develop specific approaches focused 00:18:06.790 --> 00:18:11.770 on value creating to enable ever-increasing volumes of tag 00:18:11.770 --> 00:18:12.670 products. 00:18:12.670 --> 00:18:16.330 For example, the top tier of advantage products 00:18:16.330 --> 00:18:18.100 can deliver benefits now. 00:18:18.100 --> 00:18:20.490 These are the products we want to move forward with, 00:18:20.490 --> 00:18:22.990 we want to move forward quickly and capitalize 00:18:22.990 --> 00:18:27.600 on those benefits, and create value. 00:18:27.600 --> 00:18:32.000 These are scenarios like promotional displays 00:18:32.000 --> 00:18:35.270 or specific products like Crest Whitestrips or Gillette blades 00:18:35.270 --> 00:18:36.890 and razors. 00:18:36.890 --> 00:18:40.400 The testable products need to drive new learning 00:18:40.400 --> 00:18:42.770 and they need to be tested and piloted 00:18:42.770 --> 00:18:45.560 between Proctor and Gamble and our retail partners 00:18:45.560 --> 00:18:48.860 to decide the next round of products and scenarios 00:18:48.860 --> 00:18:50.270 that we undertake. 00:18:50.270 --> 00:18:54.040 Products like Swiffer or Braun appliances 00:18:54.040 --> 00:18:56.390 would fall into this category. 00:18:56.390 --> 00:18:58.960 And finally, they are products that are challenged. 00:18:58.960 --> 00:19:00.880 These need continued research. 00:19:00.880 --> 00:19:05.320 These need the help and support of researchers like yourselves. 00:19:05.320 --> 00:19:08.770 Manual toothbrushes, Pringles, Cascade, antiperspirants 00:19:08.770 --> 00:19:10.630 and deodorants fall into this category 00:19:10.630 --> 00:19:13.150 for Procter and Gamble. 00:19:13.150 --> 00:19:16.720 So I'd like to close, now, by talking a bit about the guiding 00:19:16.720 --> 00:19:23.890 principles for our work and how you can help us in the future. 00:19:23.890 --> 00:19:26.650 As Simon said, we want to continue 00:19:26.650 --> 00:19:30.640 to play a role in understanding how EPC technology creates 00:19:30.640 --> 00:19:33.190 value for our stakeholders. 00:19:33.190 --> 00:19:35.410 Continue the learning. 00:19:35.410 --> 00:19:38.770 This is a journey and we're very much at the beginning. 00:19:38.770 --> 00:19:41.500 It's important that we collaborate with our trading 00:19:41.500 --> 00:19:46.330 partners to identify, quantify, and secure EPC-enabled benefits 00:19:46.330 --> 00:19:49.150 through process optimization. 00:19:49.150 --> 00:19:53.050 It's all about changing or adjusting our work processes 00:19:53.050 --> 00:19:58.180 using EPC data and generating EPC alerts to tell associates 00:19:58.180 --> 00:20:04.060 or manufacturer merchandising forces how to take action 00:20:04.060 --> 00:20:09.640 to generate incremental value through EPC for themselves 00:20:09.640 --> 00:20:12.610 and increased shopper satisfaction for the customers 00:20:12.610 --> 00:20:15.470 that come looking for our products. 00:20:15.470 --> 00:20:20.500 We need to continue to review our internal processes. 00:20:20.500 --> 00:20:25.360 Our current internal four walls efficiencies 00:20:25.360 --> 00:20:28.450 make internal benefits at the pallet and case 00:20:28.450 --> 00:20:31.330 more incremental to our overall effort rather than 00:20:31.330 --> 00:20:32.680 breakthrough. 00:20:32.680 --> 00:20:35.140 The breakthrough is really the collaborative space, 00:20:35.140 --> 00:20:38.170 the collaboration zone between Procter and Gamble 00:20:38.170 --> 00:20:40.360 and our trading partners. 00:20:40.360 --> 00:20:42.640 As you heard earlier, we need to drive reductions 00:20:42.640 --> 00:20:47.230 in cost, and importantly, other EPC infrastructure 00:20:47.230 --> 00:20:50.500 that's required to create a total system 00:20:50.500 --> 00:20:55.530 approach in EPC solutions. 00:20:55.530 --> 00:20:57.750 We need to support the advance of EPC 00:20:57.750 --> 00:21:01.560 performance, development, and standards through EPCglobal. 00:21:01.560 --> 00:21:04.350 Tremendous progress has been made in this area 00:21:04.350 --> 00:21:09.090 and AUTO-ID labs have been key in helping to drive that. 00:21:09.090 --> 00:21:11.670 Generation II is just one example 00:21:11.670 --> 00:21:14.130 of the progress that's been made, progress that's 00:21:14.130 --> 00:21:17.190 going to allow us to accelerate what 00:21:17.190 --> 00:21:19.470 Procter and Gamble and our retail partners 00:21:19.470 --> 00:21:23.070 can do in the years to come. 00:21:23.070 --> 00:21:25.740 Importantly, we have to improve read rates 00:21:25.740 --> 00:21:29.740 and overcome barriers to scalable implementation. 00:21:29.740 --> 00:21:32.800 Good read rates can be achieved at different points 00:21:32.800 --> 00:21:34.720 in the supply chain, but they're not 00:21:34.720 --> 00:21:37.840 there across the entire system. 00:21:37.840 --> 00:21:41.740 The applied tag performance initiative through EPCglobal 00:21:41.740 --> 00:21:44.830 is a great step forward in helping to address this. 00:21:48.530 --> 00:21:52.160 We're still at a point of limited pilot implementation. 00:21:52.160 --> 00:21:54.350 We need to know how to implement broadly 00:21:54.350 --> 00:21:57.200 across all of Procter and Gamble's products, 00:21:57.200 --> 00:21:59.270 all of our physical infrastructures, 00:21:59.270 --> 00:22:03.760 all of our systems, all of our customers. 00:22:03.760 --> 00:22:07.590 And finally, we want to use the EPC advantage strategy 00:22:07.590 --> 00:22:09.765 to secure ongoing benefits. 00:22:12.310 --> 00:22:14.870 Finally, how can you help us? 00:22:14.870 --> 00:22:19.410 You heard it before from the other speakers, 00:22:19.410 --> 00:22:21.270 low-cost tags are critical. 00:22:21.270 --> 00:22:24.990 We'd like to get to a $0.01 or less tag 00:22:24.990 --> 00:22:27.420 as soon as we possibly can. 00:22:27.420 --> 00:22:31.110 Increase tag quality, robustness, and longevity, 00:22:31.110 --> 00:22:35.040 better understand electrostatic discharge and other factors 00:22:35.040 --> 00:22:38.520 that might impede the longevity and the functionality 00:22:38.520 --> 00:22:40.140 of our tags. 00:22:40.140 --> 00:22:43.920 Tag deactivation solutions are important 00:22:43.920 --> 00:22:48.180 and how they fit into an overall EPC architecture. 00:22:48.180 --> 00:22:52.800 Solutions to incorporate the tag into corrugate materials 00:22:52.800 --> 00:22:56.100 are a very, very important way forward 00:22:56.100 --> 00:22:59.280 that will help us lower cost and streamline 00:22:59.280 --> 00:23:01.920 the implementation of EPC. 00:23:01.920 --> 00:23:05.440 We need system solutions built into EPC appliances, 00:23:05.440 --> 00:23:09.090 so we don't have to rely on multiple integrators 00:23:09.090 --> 00:23:12.330 to help us deploy our implementation. 00:23:12.330 --> 00:23:16.680 Spontaneous real-time exchanges and distributed EPC information 00:23:16.680 --> 00:23:19.320 management is important-- discovery systems 00:23:19.320 --> 00:23:24.270 that allow us to take a product that's off track, that we don't 00:23:24.270 --> 00:23:27.940 know why it's where it is, and find out what it is, 00:23:27.940 --> 00:23:32.840 where it belongs, and get it back on track in the system. 00:23:32.840 --> 00:23:37.040 Further robust studies on EPC-enabled retail availability 00:23:37.040 --> 00:23:38.150 improvements. 00:23:38.150 --> 00:23:42.710 And finally, consumer education and informed public comment 00:23:42.710 --> 00:23:45.200 on the use of EPC. 00:23:45.200 --> 00:23:48.170 All of these, in time, will help deliver 00:23:48.170 --> 00:23:52.610 the vision we have for an EPC-enabled supply chain that 00:23:52.610 --> 00:23:56.540 can literally transform in a step-change fashion 00:23:56.540 --> 00:23:59.180 the way we can go to market as Procter and Gamble 00:23:59.180 --> 00:24:00.770 with our retail partners. 00:24:00.770 --> 00:24:02.206 Thank you. 00:24:02.206 --> 00:24:05.164 [APPLAUSE] 00:24:13.052 --> 00:24:15.517 [CHATTER] 00:24:18.618 --> 00:24:20.993 [? GUEST SPEAKER 4: ?] While he's hooking up your laptop, 00:24:20.993 --> 00:24:21.446 I'll-- 00:24:21.446 --> 00:24:22.821 GUEST SPEAKER 1: Yeah, thank you. 00:24:26.297 --> 00:24:27.380 Is this battery here, or-- 00:24:57.604 --> 00:25:07.171 [INAUDIBLE] 00:25:07.171 --> 00:25:08.046 GUEST SPEAKER 4: Yep. 00:25:08.046 --> 00:25:10.040 GUEST SPEAKER 1: OK. 00:25:10.040 --> 00:25:11.010 OK, thank you. 00:25:11.010 --> 00:25:13.995 GUEST SPEAKER 4: It's a little tight on the [INAUDIBLE].. 00:25:13.995 --> 00:25:17.418 [CHATTER] 00:25:26.220 --> 00:25:29.040 GUEST SPEAKER 1: Good morning, ladies and gentlemen. 00:25:29.040 --> 00:25:34.080 I'm very delighted to present DHL experiences 00:25:34.080 --> 00:25:39.000 with RFID technology here at MIT in Boston. 00:25:39.000 --> 00:25:44.190 I'm working in DHL in Germany as sector head for consumer 00:25:44.190 --> 00:25:51.780 retail, and I will focus in my report on these subjects. 00:25:51.780 --> 00:25:57.090 Listening to the requirements of our CPG fashion 00:25:57.090 --> 00:26:02.210 and retail industry, we design and implement 00:26:02.210 --> 00:26:07.520 supply chain solutions for the benefit of our customers. 00:26:07.520 --> 00:26:13.580 RFID is one important enabler who can support our supply 00:26:13.580 --> 00:26:16.200 chain solutions. 00:26:16.200 --> 00:26:21.930 Let us start with the main opportunities for RFID, which 00:26:21.930 --> 00:26:28.110 we see for supplier logistics service providers and retailer 00:26:28.110 --> 00:26:32.670 in the supply chain, followed by the executive summary 00:26:32.670 --> 00:26:33.630 about that subject. 00:26:40.870 --> 00:26:44.590 The main opportunities for RFID in the supply chain-- and I 00:26:44.590 --> 00:26:50.680 have shown here the supplier plant, the DC of the logistics 00:26:50.680 --> 00:26:55.660 service provider, the DC of the retailer, and the outlet. 00:26:55.660 --> 00:27:04.570 And the green color is the opportunities for the supplier, 00:27:04.570 --> 00:27:08.390 and there we see the counterfeiting protection, 00:27:08.390 --> 00:27:12.130 which we very often see on the fashion side, 00:27:12.130 --> 00:27:16.210 the enabling of tracking and tracing on item level, 00:27:16.210 --> 00:27:21.160 and the better customer service through proof of guarantee 00:27:21.160 --> 00:27:24.260 and proof of delivery. 00:27:24.260 --> 00:27:27.890 In the warehouse, we can see out of our trials 00:27:27.890 --> 00:27:31.790 that we have more efficiency in the warehouse management, 00:27:31.790 --> 00:27:35.060 we have a better flow of goods, and we have 00:27:35.060 --> 00:27:38.970 faster and securer inventories. 00:27:38.970 --> 00:27:42.660 We have optimized picking in value added services, 00:27:42.660 --> 00:27:47.010 in kitting of textile and apparel, and consumer 00:27:47.010 --> 00:27:48.330 electronics. 00:27:48.330 --> 00:27:54.050 And we have all full visibility of each single case. 00:27:54.050 --> 00:27:57.380 If we look at the DC of the retailer, 00:27:57.380 --> 00:28:03.200 then we can see a clear and better warehouse visibility. 00:28:03.200 --> 00:28:08.260 They can manage a higher number of stock-keeping units 00:28:08.260 --> 00:28:13.090 to reduce the stocks and minimize the shrinkage. 00:28:13.090 --> 00:28:16.350 The cross-docking shipments can be optimized, 00:28:16.350 --> 00:28:22.380 and we have a better and efficient recall of goods 00:28:22.380 --> 00:28:25.460 through RFID. 00:28:25.460 --> 00:28:31.950 On the shop floor, there is the real-time monitoring of sales. 00:28:31.950 --> 00:28:36.240 The last 50 yards are much better managed, 00:28:36.240 --> 00:28:39.560 efficient supply from back store to shelf. 00:28:39.560 --> 00:28:44.610 There is a permanent monitoring of goods in the outlet, 00:28:44.610 --> 00:28:47.910 and for the shopper convenience you 00:28:47.910 --> 00:28:53.130 can have technical assistance like a personal shopping 00:28:53.130 --> 00:28:59.070 assistant who is giving you your last buy what 00:28:59.070 --> 00:29:01.650 you have done in the store. 00:29:01.650 --> 00:29:09.160 And last, not least, speeding up the check-out processes 00:29:09.160 --> 00:29:13.310 in the cashier area. 00:29:13.310 --> 00:29:20.440 Out of that, we want to give the executive summary up front. 00:29:20.440 --> 00:29:25.180 We see RFID is the solution for the future. 00:29:25.180 --> 00:29:29.170 We could see in our different trials cost reduction, 00:29:29.170 --> 00:29:34.210 quality improvement, and innovative new services like 00:29:34.210 --> 00:29:37.000 [? tech ?] [? fit ?] what we have done. 00:29:37.000 --> 00:29:40.150 The entire supply chain will benefit 00:29:40.150 --> 00:29:43.210 from the use of this new technology 00:29:43.210 --> 00:29:47.200 after complete implementation and global coverage. 00:29:47.200 --> 00:29:53.060 We know that barcoding has needed about 25 years, 00:29:53.060 --> 00:29:57.700 and we see that we have to go quite a long run, 00:29:57.700 --> 00:30:02.320 but we are not looking at the 25 years. 00:30:02.320 --> 00:30:06.470 RFID will improve the processes in the supply chain. 00:30:06.470 --> 00:30:08.170 This is for sure. 00:30:08.170 --> 00:30:11.740 We could prove fast and accurate handling 00:30:11.740 --> 00:30:17.170 in unit tracking speeds up the lead time in the supply chain. 00:30:17.170 --> 00:30:22.390 Secure data and shipment quality provides more transparency, 00:30:22.390 --> 00:30:26.050 and continuous test in various pilots 00:30:26.050 --> 00:30:30.040 leads to stability of subprocesses. 00:30:30.040 --> 00:30:37.600 But RFID today cannot be applied for all logistics processes. 00:30:37.600 --> 00:30:41.290 RFID technology development is not 00:30:41.290 --> 00:30:45.130 mature yet to steer the entire supply chain. 00:30:45.130 --> 00:30:48.190 There are still major issues to be solved, 00:30:48.190 --> 00:30:52.420 such as harmonization of standards, 00:30:52.420 --> 00:30:58.770 100% read rates, and technical issues with liquids and metal. 00:30:58.770 --> 00:31:02.250 What is the supply chain today like? 00:31:02.250 --> 00:31:06.990 And I'm referring now on a barcode supply chain. 00:31:06.990 --> 00:31:10.440 You can see here on the top of the chart. 00:31:10.440 --> 00:31:14.550 You see the product flow, the physical product flow 00:31:14.550 --> 00:31:20.070 from the manufacturer via the DC and the cross-docking point 00:31:20.070 --> 00:31:22.590 of the logistics service provider 00:31:22.590 --> 00:31:26.790 to the DC of the retailer and then to the outlet. 00:31:26.790 --> 00:31:29.250 On the bottom part of that chart, 00:31:29.250 --> 00:31:33.960 you see the information flow from the data warehouse 00:31:33.960 --> 00:31:37.860 of the manufacturer via logistics service provider 00:31:37.860 --> 00:31:40.030 to the retailer. 00:31:40.030 --> 00:31:44.040 And you see there is a lot of processes 00:31:44.040 --> 00:31:50.520 to be done on the physical flow and on the information flow. 00:31:50.520 --> 00:31:54.400 I will not go deeper in all of these processes, 00:31:54.400 --> 00:31:58.650 but I want to show you on one process, the loading 00:31:58.650 --> 00:32:03.345 process, the difference between barcode and RFID. 00:32:06.350 --> 00:32:11.330 You see here there is a pallet loaded 00:32:11.330 --> 00:32:14.990 in a warehouse on a truck, and you 00:32:14.990 --> 00:32:19.850 can see that this is automatically scanned. 00:32:19.850 --> 00:32:25.550 And then when you see when the traffic light went from red 00:32:25.550 --> 00:32:29.750 to green, it is at the same time booked out 00:32:29.750 --> 00:32:34.550 of the warehouse management system into the truck. 00:32:34.550 --> 00:32:39.170 Later on, the retail partner receives automatically a 00:32:39.170 --> 00:32:41.750 [INAUDIBLE] in dispatch [INAUDIBLE] format. 00:32:45.210 --> 00:32:54.180 If you look at the same process in RFID process, 00:32:54.180 --> 00:32:59.760 then you can see there is a small difference. 00:32:59.760 --> 00:33:04.360 You have full visibility of each single case. 00:33:04.360 --> 00:33:08.970 You can see here that the reader has read all the cases 00:33:08.970 --> 00:33:14.370 on the pallet, and we have here one special case 00:33:14.370 --> 00:33:20.350 that the driver is leaving one box on the shop floor. 00:33:20.350 --> 00:33:26.730 And here you can see now all the other pallets are loaded, 00:33:26.730 --> 00:33:28.710 and the only thing. 00:33:28.710 --> 00:33:33.300 The black box was not seen. 00:33:33.300 --> 00:33:35.430 It went to the gate. 00:33:35.430 --> 00:33:40.020 Now the dispatcher is calling the driver, 00:33:40.020 --> 00:33:43.980 and the driver has to return. 00:33:43.980 --> 00:33:49.140 And he will run back and-- 00:33:49.140 --> 00:33:51.120 [LAUGHTER] 00:33:51.120 --> 00:33:55.050 And he takes that black box, bring it through the reader, 00:33:55.050 --> 00:33:59.550 and now you can see the reader has 00:33:59.550 --> 00:34:02.880 seen that everything is loaded. 00:34:02.880 --> 00:34:08.880 And here [INAUDIBLE] clear the special delivery is now loaded, 00:34:08.880 --> 00:34:12.179 and he can go to the retail site. 00:34:12.179 --> 00:34:14.580 What can we learn out of that? 00:34:14.580 --> 00:34:20.159 We have the full visibility of each single case, which 00:34:20.159 --> 00:34:24.300 we don't have on the scanning side 00:34:24.300 --> 00:34:28.139 when it is only passing the scanner. 00:34:28.139 --> 00:34:31.260 We have a completeness check, and we 00:34:31.260 --> 00:34:35.010 have a fast allocation of not-identified goods 00:34:35.010 --> 00:34:38.949 by a simultaneous check. 00:34:38.949 --> 00:34:40.840 What have we done in DHL? 00:34:40.840 --> 00:34:43.489 Which RFID pilots? 00:34:43.489 --> 00:34:47.960 We have done a pallet tracking, case tracking, 00:34:47.960 --> 00:34:50.030 and item tracking. 00:34:50.030 --> 00:34:54.230 We have looked at inventory, order fulfillment, 00:34:54.230 --> 00:34:59.780 and condition monitoring for temperature, humidity, 00:34:59.780 --> 00:35:02.990 and shock and vibration, and we have 00:35:02.990 --> 00:35:08.240 looked at value-added services which we can do out 00:35:08.240 --> 00:35:10.790 of the RFID technology. 00:35:10.790 --> 00:35:13.400 I will not go to all the industries. 00:35:13.400 --> 00:35:17.330 I will only touch now the fashion, retail, 00:35:17.330 --> 00:35:22.760 and CPG industry in the following pilots. 00:35:22.760 --> 00:35:25.280 What we have done in three pilots was, 00:35:25.280 --> 00:35:29.720 the first one, flow steering of multi-use trace, 00:35:29.720 --> 00:35:33.200 then a fashion pilot in France, and together 00:35:33.200 --> 00:35:36.200 with metro in the Future Store Initiative, 00:35:36.200 --> 00:35:40.670 we have done another trial in Germany. 00:35:40.670 --> 00:35:42.560 On the flow steering off multi-use 00:35:42.560 --> 00:35:49.970 trace, in our telecom warehouse we have tagged multi-use trace 00:35:49.970 --> 00:35:53.420 with two tags, and what we learned out of it-- 00:35:53.420 --> 00:35:55.640 or what was the test results. 00:35:55.640 --> 00:36:01.580 We got a 100% tracking accuracy inside the warehouse, 00:36:01.580 --> 00:36:07.280 and we could reduce the assets by 50%, 00:36:07.280 --> 00:36:11.390 and we had 20% faster control processes. 00:36:14.070 --> 00:36:17.430 On the pilot fashion logistics in France, 00:36:17.430 --> 00:36:21.660 there we tested hanging garments and flat packs, 00:36:21.660 --> 00:36:26.160 and there on the control process of hanging garment 00:36:26.160 --> 00:36:30.060 we could see we are four times faster when we take 00:36:30.060 --> 00:36:33.520 in the goods than was barcode. 00:36:33.520 --> 00:36:39.430 We could do the inventory of 20,000 hanging garments 00:36:39.430 --> 00:36:45.520 in 30 seconds, and we had a significant improvement 00:36:45.520 --> 00:36:50.270 in control of flat packed items. 00:36:50.270 --> 00:36:52.580 What were the key learnings? 00:36:52.580 --> 00:36:59.410 We learned that we had to limit in the carton 40 pieces. 00:36:59.410 --> 00:37:02.050 There we need further improvement, 00:37:02.050 --> 00:37:07.660 and we were not clear if HF or UHF is the right technology, 00:37:07.660 --> 00:37:13.330 and the customer once there are resolved. 00:37:13.330 --> 00:37:19.000 And on the fashion items, we have quite a lot 00:37:19.000 --> 00:37:25.240 of privacy issues in Europe, and we are hard 00:37:25.240 --> 00:37:29.110 working on it with one group in Brussels 00:37:29.110 --> 00:37:32.850 and one group in Berlin. 00:37:32.850 --> 00:37:35.790 The third pilot was metro future store, 00:37:35.790 --> 00:37:41.640 and I must say here that we have only generation one in Europe 00:37:41.640 --> 00:37:42.510 at the moment. 00:37:42.510 --> 00:37:46.170 We are longing for that we get generation two, 00:37:46.170 --> 00:37:49.140 but we think they are still here in America 00:37:49.140 --> 00:37:51.765 and they don't want to come over to Europe. 00:37:51.765 --> 00:37:53.940 [LAUGHTER] 00:37:53.940 --> 00:38:00.770 And pallet tagging only shows nearly no improvement out 00:38:00.770 --> 00:38:07.250 of our learnings and to compare to barcode on the manufacturer 00:38:07.250 --> 00:38:09.650 and the [? LSB ?] site. 00:38:09.650 --> 00:38:13.400 But the key learnings were pallet tagging 00:38:13.400 --> 00:38:16.580 is a useful step forward in order 00:38:16.580 --> 00:38:20.120 to focus on the standardized supply chain. 00:38:20.120 --> 00:38:25.070 You can exchange master data, EDI messages, and delivery 00:38:25.070 --> 00:38:31.220 control with your partners, and you can do the information 00:38:31.220 --> 00:38:34.610 flow, and the alignment with a business partner 00:38:34.610 --> 00:38:39.350 is one of the key prerequisites to go forward. 00:38:39.350 --> 00:38:42.610 Another learning which we had was the smart label. 00:38:42.610 --> 00:38:46.630 We call it smart label, and it is 00:38:46.630 --> 00:38:50.290 a label which is a flack label. 00:38:50.290 --> 00:38:53.200 It's a little bit off the pallet, 00:38:53.200 --> 00:38:56.350 and this improves the read rates to 90%. 00:39:01.200 --> 00:39:07.680 What is the benefit allocation, what we found out through RFID? 00:39:07.680 --> 00:39:12.480 We could say to work with a pallet was a good start, 00:39:12.480 --> 00:39:18.810 but we didn't see significant advantages against the barcode. 00:39:18.810 --> 00:39:23.070 When we went then to the box level, 00:39:23.070 --> 00:39:27.210 then we could see some advantages 00:39:27.210 --> 00:39:32.220 on the physical subprocesses and on the control side, 00:39:32.220 --> 00:39:37.890 and the best results we got when we went to the item level, 00:39:37.890 --> 00:39:40.710 and they're on the order picking side, 00:39:40.710 --> 00:39:44.290 and on the stock optimization were the best benefits. 00:39:47.370 --> 00:39:52.160 What are the main issues for RFID as a supply chain? 00:39:52.160 --> 00:39:56.900 We could see that the manufacturers have very often 00:39:56.900 --> 00:40:01.220 their RFID labeling on box level separate as 00:40:01.220 --> 00:40:03.470 a separate operation. 00:40:03.470 --> 00:40:08.000 There are still technical issues to steer the production, 00:40:08.000 --> 00:40:11.990 combine the primary package with a lot number, 00:40:11.990 --> 00:40:14.930 and there are still high investments 00:40:14.930 --> 00:40:19.310 for RFID infrastructure, tech costs, reader, and middleware 00:40:19.310 --> 00:40:23.840 and we are now changing from gen 1 to gen s. 00:40:23.840 --> 00:40:27.640 There are investments again. 00:40:27.640 --> 00:40:30.460 There has to be defined appropriate IT 00:40:30.460 --> 00:40:34.210 tools for enterprise resource planning and production 00:40:34.210 --> 00:40:34.975 planning systems. 00:40:37.800 --> 00:40:40.780 On the logistics service provider side, 00:40:40.780 --> 00:40:45.120 we see again high investments for RFID infrastructure. 00:40:45.120 --> 00:40:48.360 If you want to have your warehouse ready, 00:40:48.360 --> 00:40:51.570 you have to tech the locations. 00:40:51.570 --> 00:40:59.610 Reader, middleware, and others needs to [? buy. ?] 00:40:59.610 --> 00:41:04.980 We have to define appropriate IT tools for control systems, 00:41:04.980 --> 00:41:11.520 and what I showed you in our fashion trial 00:41:11.520 --> 00:41:14.520 that the data capture of bulk were still 00:41:14.520 --> 00:41:18.540 limited to small quantities. 00:41:18.540 --> 00:41:22.650 On the retail side, we see there in Europe 00:41:22.650 --> 00:41:29.880 the read rate below 100% and only a few goods are tagged. 00:41:29.880 --> 00:41:33.870 Item level tagged goods are only in pilots, 00:41:33.870 --> 00:41:36.750 and the read rates for mixed palettes, 00:41:36.750 --> 00:41:42.120 which we use in Europe, are still below 100%. 00:41:42.120 --> 00:41:46.460 There are privacy issues for the consumer, 00:41:46.460 --> 00:41:53.520 and a lot of the employees are anxious to lose their jobs, 00:41:53.520 --> 00:41:58.100 especially on the cashier side. 00:41:58.100 --> 00:42:03.590 Then we have to solve the disposal of used RFID tags. 00:42:07.200 --> 00:42:10.920 What is our assessment as logistics service provider 00:42:10.920 --> 00:42:13.290 for RFID? 00:42:13.290 --> 00:42:17.850 We want to be in line with the necessities and prerequisites 00:42:17.850 --> 00:42:20.790 of integrated supply chain management, 00:42:20.790 --> 00:42:24.000 and we are clearly saying we have 00:42:24.000 --> 00:42:28.900 to adopt the RFID technology because on the long term 00:42:28.900 --> 00:42:34.450 we will have a lot of advantages. 00:42:34.450 --> 00:42:38.560 To share the investments and implementation costs 00:42:38.560 --> 00:42:41.860 on the short term, I think we can bear it 00:42:41.860 --> 00:42:47.300 if we see on the long term the profit perspectives. 00:42:47.300 --> 00:42:51.800 However, what we see-- the main potentials of efficiency 00:42:51.800 --> 00:42:55.730 and cost saving due to RFID implementation 00:42:55.730 --> 00:43:00.530 in the supply chain will not be realized by logistics service 00:43:00.530 --> 00:43:01.550 providers. 00:43:01.550 --> 00:43:08.810 We see more advantages on the retail side and maybe 00:43:08.810 --> 00:43:11.240 on the supplier side as well. 00:43:14.390 --> 00:43:18.950 Our RFID positioning today is because we have clearly 00:43:18.950 --> 00:43:23.390 seen the tech lab label costs are going down. 00:43:23.390 --> 00:43:26.030 The performance is getting better, 00:43:26.030 --> 00:43:30.920 and I think we as DHL are between deploy 00:43:30.920 --> 00:43:35.060 and implementation, and we want to go further right. 00:43:38.040 --> 00:43:47.130 DHL after the purchase of Excel is now the biggest company 00:43:47.130 --> 00:43:49.560 in the logistics market. 00:43:49.560 --> 00:43:52.530 We are market leader in ocean freight, 00:43:52.530 --> 00:43:54.990 we are market leader in air freight, 00:43:54.990 --> 00:43:58.470 and we are market leader in contract logistics. 00:43:58.470 --> 00:44:02.220 This area is a very fragmented market. 00:44:02.220 --> 00:44:09.310 We have only there 5%, but we want to redefine that market, 00:44:09.310 --> 00:44:14.390 and we think RFID can help us. 00:44:14.390 --> 00:44:19.550 And therefore, we as DHL have a very strong commitment 00:44:19.550 --> 00:44:24.320 to EPCglobal because, as I have shown you, 00:44:24.320 --> 00:44:28.220 DHL has to serve different industries 00:44:28.220 --> 00:44:30.980 with different products and services 00:44:30.980 --> 00:44:34.340 in all geographies of the world, and we have 00:44:34.340 --> 00:44:37.430 to face different standards. 00:44:37.430 --> 00:44:42.700 We need one global standard used by different industries 00:44:42.700 --> 00:44:48.230 for all products and services, and therefore 00:44:48.230 --> 00:44:52.790 our commitment to EPCglobal is very strong 00:44:52.790 --> 00:44:56.300 because we believe this organization can 00:44:56.300 --> 00:44:58.480 be the enabler of our vision. 00:45:01.190 --> 00:45:03.356 Thank you for your attention. 00:45:03.356 --> 00:45:06.758 [APPLAUSE] 00:45:13.150 --> 00:45:14.500 Yeah. 00:45:14.500 --> 00:45:17.895 [CHATTER] 00:45:32.917 --> 00:45:33.750 GUEST SPEAKER 4: OK. 00:45:33.750 --> 00:45:36.230 Brian, just remember we have about 20 minutes. 00:45:36.230 --> 00:45:37.322 GUEST SPEAKER 2: Yes. 00:45:37.322 --> 00:45:39.530 GUEST SPEAKER 4: I think Brian's got like 200 slides. 00:45:42.655 --> 00:45:44.530 GUEST SPEAKER 2: I'll only show half of them. 00:45:58.390 --> 00:46:00.370 GUEST SPEAKER 4: All right. 00:46:00.370 --> 00:46:03.220 GUEST SPEAKER 2: [INAUDIBLE] All right. 00:46:06.566 --> 00:46:07.710 I'll set myself up. 00:46:10.985 --> 00:46:11.485 OK. 00:46:14.050 --> 00:46:15.535 Good. 00:46:15.535 --> 00:46:20.110 So, before I start, I wanted to make a disclaimer 00:46:20.110 --> 00:46:25.210 because, as you know, this is being taped for OpenCourseWare, 00:46:25.210 --> 00:46:27.520 which means the audience can be very big, 00:46:27.520 --> 00:46:31.090 and actually I'm afraid of what my great grandchildren will 00:46:31.090 --> 00:46:33.850 think when they see this because it will be there on the web. 00:46:33.850 --> 00:46:35.830 I just want to tell them that I know 00:46:35.830 --> 00:46:38.440 I'm not going to say things that will be true, OK? 00:46:38.440 --> 00:46:40.270 I'm going to make some wild claims, 00:46:40.270 --> 00:46:42.950 and I just wanted to warn them when they see this. 00:46:42.950 --> 00:46:43.450 OK? 00:46:43.450 --> 00:46:48.040 And I guess in passing I'll also warned all of you, but anyway. 00:46:48.040 --> 00:46:49.330 OK, good. 00:46:49.330 --> 00:46:54.280 So, let me start by summarizing. 00:46:54.280 --> 00:46:56.080 I added in the title one thing that 00:46:56.080 --> 00:47:01.000 was not in the agenda, which is building an academic discipline 00:47:01.000 --> 00:47:03.670 with a question mark, because I think that's one of the issues 00:47:03.670 --> 00:47:06.760 that we need to discuss as a community. 00:47:06.760 --> 00:47:10.120 I'm leaning toward saying yes. 00:47:10.120 --> 00:47:12.650 But if you had asked me last week, 00:47:12.650 --> 00:47:14.350 I would have probably said no. 00:47:14.350 --> 00:47:17.830 So that's probably why I put the question mark, 00:47:17.830 --> 00:47:19.300 because I'm still not sure. 00:47:19.300 --> 00:47:21.580 But I thought in terms of being a bit provocative. 00:47:21.580 --> 00:47:23.170 Let's take the position that, yes, 00:47:23.170 --> 00:47:25.480 and then let's see where this takes us. 00:47:25.480 --> 00:47:26.470 OK? 00:47:26.470 --> 00:47:27.040 Good. 00:47:27.040 --> 00:47:30.340 So this is the session that we had today, the people, 00:47:30.340 --> 00:47:35.110 and if I summarize what I've heard from industry thus far, 00:47:35.110 --> 00:47:42.070 I think the retailers are sort of seeing these 00:47:42.070 --> 00:47:43.900 as a serious opportunity. 00:47:43.900 --> 00:47:46.010 It's sort of like an iterative process. 00:47:46.010 --> 00:47:46.900 It's evolving. 00:47:46.900 --> 00:47:49.690 There's many different approaches that they are using, 00:47:49.690 --> 00:47:52.990 many different things that they are trying, 00:47:52.990 --> 00:47:56.410 but I think what's important is that they are extremely 00:47:56.410 --> 00:47:59.770 collaborative with their partners 00:47:59.770 --> 00:48:01.000 but also with academia. 00:48:01.000 --> 00:48:03.920 So I see this as an opportunity. 00:48:03.920 --> 00:48:08.200 They obviously need the supplier to help them. 00:48:08.200 --> 00:48:11.890 They're trying to focus on areas where they see some gain, 00:48:11.890 --> 00:48:14.140 but they need this help with these deep issues 00:48:14.140 --> 00:48:17.200 that I've listed here, which are areas where I think 00:48:17.200 --> 00:48:18.910 we academics can help them. 00:48:18.910 --> 00:48:21.700 I think very important in building their business cases, 00:48:21.700 --> 00:48:25.150 but there's a few other areas where they're talking about. 00:48:25.150 --> 00:48:29.320 What's important also is that, even though this is sort 00:48:29.320 --> 00:48:33.820 of a supply chain focus, I think what's important-- 00:48:33.820 --> 00:48:36.460 and that's another of the claims that I wanted to make-- 00:48:36.460 --> 00:48:40.200 is that they have a very interdisciplinary need. 00:48:40.200 --> 00:48:43.090 If you look at the list of things they need help with, 00:48:43.090 --> 00:48:45.400 they're just not operational things. 00:48:45.400 --> 00:48:50.140 They need things that have to do with things that all of us 00:48:50.140 --> 00:48:52.570 have been talking about over the last two days, 00:48:52.570 --> 00:48:55.610 and I will talk about once we finish. 00:48:55.610 --> 00:49:00.760 So I think that the supply chain needs interdisciplinary help 00:49:00.760 --> 00:49:02.240 on many, many issues. 00:49:02.240 --> 00:49:02.860 OK? 00:49:02.860 --> 00:49:06.340 And if we look at manufacturers, you know, 00:49:06.340 --> 00:49:14.230 I think there's been again a focus on the supply chain, 00:49:14.230 --> 00:49:17.530 and I find this interesting that the manufacturers-- 00:49:17.530 --> 00:49:19.480 and I haven't seen any manufacturer 00:49:19.480 --> 00:49:23.308 really thinking about their products changing. 00:49:23.308 --> 00:49:24.850 They're still thinking, OK, I'm going 00:49:24.850 --> 00:49:28.090 to manufacture the same thing and just how it 00:49:28.090 --> 00:49:29.530 works through the supply chain. 00:49:29.530 --> 00:49:32.630 And if I look at retailers, it's a bit the same thing. 00:49:32.630 --> 00:49:35.870 It's not like Walmart stores are going to change. 00:49:35.870 --> 00:49:39.100 They're just going to be more efficient. 00:49:39.100 --> 00:49:42.010 There's going to be less out-of-stocks, OK? 00:49:42.010 --> 00:49:46.220 But the reason I think [INAUDIBLE] of further change, 00:49:46.220 --> 00:49:48.040 and I think we as academics can maybe 00:49:48.040 --> 00:49:50.500 push a bit the envelope because I think 00:49:50.500 --> 00:49:54.160 both problems that our manufacturer will change 00:49:54.160 --> 00:49:58.240 because the channel in a way drives what is sold through it, 00:49:58.240 --> 00:50:01.930 and also I think new store formats we will emerge. 00:50:01.930 --> 00:50:06.190 And in terms of where manufacturers need help, 00:50:06.190 --> 00:50:14.090 I think it's very similar to what retailers need. 00:50:14.090 --> 00:50:15.948 So I think the needs are very, very aligned, 00:50:15.948 --> 00:50:18.490 and it's not that there's some things that help manufacturers 00:50:18.490 --> 00:50:19.782 and others that help retailers. 00:50:19.782 --> 00:50:22.060 I think we're getting a very consistent message 00:50:22.060 --> 00:50:26.260 from everybody here as to what are the areas where 00:50:26.260 --> 00:50:28.870 we should be doing research. 00:50:28.870 --> 00:50:30.340 OK, good. 00:50:30.340 --> 00:50:35.170 So, in many ways, I think we're at the very beginning 00:50:35.170 --> 00:50:39.310 of an industry, and I use that as an analogy. 00:50:39.310 --> 00:50:42.730 And this, they used to call it a horseless carriage, 00:50:42.730 --> 00:50:48.100 very much like some people still call RFID a wireless barcode. 00:50:48.100 --> 00:50:53.380 And if you think about the changes that had happened 00:50:53.380 --> 00:50:56.720 or that happened after the first cars were invented 00:50:56.720 --> 00:50:59.710 in over the last 100 years, you can see the kind of changes 00:50:59.710 --> 00:51:01.420 that we will see with RFID, and I 00:51:01.420 --> 00:51:06.740 think it will be actually a bigger change than that one. 00:51:06.740 --> 00:51:07.510 OK? 00:51:07.510 --> 00:51:11.880 So, here's a couple of examples. 00:51:11.880 --> 00:51:14.310 Also with advertising we're seeing lots of changes. 00:51:14.310 --> 00:51:18.180 This is one of the first steamboats, 00:51:18.180 --> 00:51:20.500 and we had steams and sales. 00:51:20.500 --> 00:51:23.310 OK, so many, many changes. 00:51:23.310 --> 00:51:25.470 Here again, just to summarize, I think 00:51:25.470 --> 00:51:28.140 it's important that the supply chain needs 00:51:28.140 --> 00:51:31.800 a lot more than just supply chain research, 00:51:31.800 --> 00:51:37.240 and I think that in many ways if we figure out the supply chain 00:51:37.240 --> 00:51:38.610 we'll figure it out everything. 00:51:38.610 --> 00:51:41.105 That's why I'm saying this is NP hard. 00:51:41.105 --> 00:51:43.560 It's sort of borrowed because I'm a computer scientist. 00:51:43.560 --> 00:51:45.330 In computer science, they say problems 00:51:45.330 --> 00:51:47.400 that are NP hard-- if you solve one of them, 00:51:47.400 --> 00:51:48.790 you've solved all of them. 00:51:48.790 --> 00:51:51.360 So I think that happens with the supply chain. 00:51:51.360 --> 00:51:55.000 And also [INAUDIBLE] Based on what I've seen, 00:51:55.000 --> 00:51:58.530 I think it's the supply chain problems are written off, 00:51:58.530 --> 00:52:00.750 but if you solve problems in the supply chain 00:52:00.750 --> 00:52:03.660 you'll probably be able to solve pretty much any other problems. 00:52:03.660 --> 00:52:06.810 But, again, question marks because I'm not 00:52:06.810 --> 00:52:08.310 really positive. 00:52:08.310 --> 00:52:11.310 And if you look at how we started-- 00:52:11.310 --> 00:52:14.130 as a line borrowed from Sanjay and a lot of the work 00:52:14.130 --> 00:52:15.720 I've been doing together with him. 00:52:15.720 --> 00:52:21.570 You know, if you look at the opportunities, 00:52:21.570 --> 00:52:24.720 you can see also that this matches beat 00:52:24.720 --> 00:52:26.620 what the supply chain needs. 00:52:26.620 --> 00:52:27.240 OK? 00:52:27.240 --> 00:52:29.760 So I think there's here a nice match, 00:52:29.760 --> 00:52:34.680 and that's why I'm suggesting-- 00:52:34.680 --> 00:52:38.850 let's see if we can go to the next one. 00:52:38.850 --> 00:52:41.950 OK, seems to be stuck. 00:52:41.950 --> 00:52:42.920 It's a very good slide. 00:52:42.920 --> 00:52:43.420 I know. 00:52:43.420 --> 00:52:45.800 The computer is smart. 00:52:45.800 --> 00:52:47.774 OK. 00:52:47.774 --> 00:52:48.710 AUDIENCE: [INAUDIBLE] 00:52:48.710 --> 00:52:50.142 GUEST SPEAKER 2: Excuse me? 00:52:50.142 --> 00:52:51.570 AUDIENCE: [INAUDIBLE] 00:52:51.570 --> 00:52:52.950 GUEST SPEAKER 2: No. 00:52:52.950 --> 00:52:53.525 Well-- 00:52:53.525 --> 00:52:54.400 AUDIENCE: [INAUDIBLE] 00:52:54.400 --> 00:52:56.320 GUEST SPEAKER 2: OK, good. 00:52:56.320 --> 00:52:58.360 So, that made it. 00:52:58.360 --> 00:52:59.080 OK. 00:52:59.080 --> 00:53:02.200 So a suggestion I would make to all the researchers 00:53:02.200 --> 00:53:06.460 here is to use the supply chain as your laboratory, 00:53:06.460 --> 00:53:08.920 and I think they seem to be open, 00:53:08.920 --> 00:53:10.810 and I think they've proven they're open. 00:53:10.810 --> 00:53:13.670 I think it's sort of like an NP hard problem, 00:53:13.670 --> 00:53:18.400 so I would suggest we do that, and that's what we've done, 00:53:18.400 --> 00:53:20.860 and I'll give you an example of some research 00:53:20.860 --> 00:53:26.860 that I've done that I started in '97 by looking at a supply 00:53:26.860 --> 00:53:30.350 chain issue that I think apparently 00:53:30.350 --> 00:53:32.500 doesn't have to do a lot with the supply chain, 00:53:32.500 --> 00:53:36.050 but, as you will see, it ended up having a lot to do with it. 00:53:36.050 --> 00:53:37.060 OK? 00:53:37.060 --> 00:53:42.340 And just to begin, some of the issues with the supply 00:53:42.340 --> 00:53:46.000 chain that, again, Sanjay already mentioned. 00:53:46.000 --> 00:53:48.070 You know, there's lots of issues, 00:53:48.070 --> 00:53:55.330 but perhaps the place where it seems to be harder to work on 00:53:55.330 --> 00:53:59.200 is at the edge of the supply chain. 00:53:59.200 --> 00:54:02.080 That's where the problems are a lot bigger. 00:54:02.080 --> 00:54:05.560 Customers come in, and they'll do all sorts of nasty things 00:54:05.560 --> 00:54:08.120 to you, so that's where I think it's very hard, 00:54:08.120 --> 00:54:10.240 so I think that's a research laboratory 00:54:10.240 --> 00:54:12.880 if you want to think long term what may happen. 00:54:12.880 --> 00:54:16.180 If you want to think short term, I 00:54:16.180 --> 00:54:19.780 think there are some areas where they are better, 00:54:19.780 --> 00:54:23.500 like some of the portals that we saw with DHL and receiving. 00:54:23.500 --> 00:54:28.570 I think there may be easier to do progress there, OK? 00:54:28.570 --> 00:54:34.210 So one of the areas where I did some research 00:54:34.210 --> 00:54:39.430 was trying to look at a grocery store 00:54:39.430 --> 00:54:42.610 and see here what were some of the legal issues that 00:54:42.610 --> 00:54:46.120 would have to be overcome. 00:54:46.120 --> 00:54:48.220 And so here's a little video. 00:54:48.220 --> 00:54:49.945 You see a little grocery cart. 00:54:49.945 --> 00:54:52.750 We actually implemented this and did some tests, 00:54:52.750 --> 00:54:58.570 and the products obviously have RFID, 00:54:58.570 --> 00:55:01.960 and they send a little advertising because they 00:55:01.960 --> 00:55:03.220 know what's on the cart. 00:55:03.220 --> 00:55:04.270 Right? 00:55:04.270 --> 00:55:07.030 So we said, OK, let's try and analyze 00:55:07.030 --> 00:55:09.400 what are some of the legal issues here, 00:55:09.400 --> 00:55:11.560 and we came up with a list, which 00:55:11.560 --> 00:55:15.287 I think you can then go to many other applications 00:55:15.287 --> 00:55:16.870 and say, OK, what are the legal issues 00:55:16.870 --> 00:55:19.630 of this sort of embedded intelligence or this product 00:55:19.630 --> 00:55:20.290 internet. 00:55:20.290 --> 00:55:25.020 And it turns out that they happen to be a subset of this, 00:55:25.020 --> 00:55:25.630 OK? 00:55:25.630 --> 00:55:29.950 So that's why I think it's useful, and so we have at list. 00:55:29.950 --> 00:55:33.760 We actually even wrote a book and a bunch of papers 00:55:33.760 --> 00:55:36.910 on some of the issues, some of the legal issues that happened. 00:55:36.910 --> 00:55:41.360 Here are some of the issues that we came up with. 00:55:41.360 --> 00:55:44.170 So again, I think that working on the supply chain, 00:55:44.170 --> 00:55:49.870 you can really do progress that can help RFID in general, 00:55:49.870 --> 00:55:53.420 and again here, if we look at the opportunities, 00:55:53.420 --> 00:55:56.830 I think what we are seeing-- 00:55:56.830 --> 00:56:01.180 and Sanjay had these three columns, the technology, 00:56:01.180 --> 00:56:02.920 the applications, and the analysis. 00:56:02.920 --> 00:56:06.700 I don't know if these are the three columns that we 00:56:06.700 --> 00:56:08.260 should use going forward, but I think 00:56:08.260 --> 00:56:11.000 it's a good starting point. 00:56:11.000 --> 00:56:14.830 What we see, even on this little example on the supply chain, 00:56:14.830 --> 00:56:18.280 is that these three disciplines are somewhat related. 00:56:18.280 --> 00:56:21.310 So, the technology that you use, depending 00:56:21.310 --> 00:56:24.520 on what kind of RFID tags you use, 00:56:24.520 --> 00:56:28.667 you can think of one application or another application. 00:56:28.667 --> 00:56:30.750 So that's sort linked the technologies [INAUDIBLE] 00:56:30.750 --> 00:56:32.530 the applications, and the kind of analysis 00:56:32.530 --> 00:56:35.110 whether legal issues are important or not 00:56:35.110 --> 00:56:36.400 is also related. 00:56:36.400 --> 00:56:41.870 So I think that one needs to look at the three things, 00:56:41.870 --> 00:56:45.640 and that would be one of my bases for suggesting 00:56:45.640 --> 00:56:47.020 that we need a discipline. 00:56:47.020 --> 00:56:51.650 But before doing that, let's see. 00:56:51.650 --> 00:56:56.090 Maybe we need to go to-- ah, you were right here on the arrow. 00:56:56.090 --> 00:56:58.660 It really doesn't like this slide. 00:56:58.660 --> 00:57:00.100 OK, good. 00:57:00.100 --> 00:57:03.580 So, the other area where we did some work 00:57:03.580 --> 00:57:09.280 was on the supply chain, and we actually looked at receiving, 00:57:09.280 --> 00:57:12.880 and we looked at processes in different warehouses 00:57:12.880 --> 00:57:15.730 and in different stores collaborating with Walmart, 00:57:15.730 --> 00:57:18.460 Gillette, and many others, and trying to understand 00:57:18.460 --> 00:57:19.510 how things worked. 00:57:19.510 --> 00:57:25.540 And what we did is a very detailed almost maniacal kind 00:57:25.540 --> 00:57:29.410 of analysis, where we were obsessed for understanding 00:57:29.410 --> 00:57:34.060 everything, and actually even with Richard and a few others 00:57:34.060 --> 00:57:37.870 we spent hours videotaping and mapping processes. 00:57:37.870 --> 00:57:40.810 And on a simple warehouse, we had 00:57:40.810 --> 00:57:43.810 thousands of processes to try and really understand 00:57:43.810 --> 00:57:47.200 what could change. 00:57:47.200 --> 00:57:50.170 So we don't really have time to go in detail, 00:57:50.170 --> 00:57:52.120 but we did learn quite a bit. 00:57:52.120 --> 00:57:56.170 We have a paper that details the methodology that we used, 00:57:56.170 --> 00:58:00.250 but that just by looking at one warehouses 00:58:00.250 --> 00:58:02.728 and just by looking in detail at something, 00:58:02.728 --> 00:58:04.270 you can really learn a lot of things. 00:58:04.270 --> 00:58:08.470 Just like I showed you what we learned on the legal side 00:58:08.470 --> 00:58:10.360 just by looking at that little grocery 00:58:10.360 --> 00:58:12.170 cart in that little example. 00:58:12.170 --> 00:58:12.880 OK? 00:58:12.880 --> 00:58:17.320 But we did the same thing with a warehouse, 00:58:17.320 --> 00:58:21.100 and basically just by analyzing a warehouse you can come up 00:58:21.100 --> 00:58:24.010 with a bunch of areas where there can be improvement, 00:58:24.010 --> 00:58:28.060 and those are areas where RFID can help the supply chain, 00:58:28.060 --> 00:58:31.990 and they've been published quite widely. 00:58:31.990 --> 00:58:35.470 But here also again another way of looking 00:58:35.470 --> 00:58:38.780 at the different areas where there can be improvement, 00:58:38.780 --> 00:58:43.540 and that's again to prove the variety of issues that can be 00:58:43.540 --> 00:58:45.400 researched on the supply chain. 00:58:45.400 --> 00:58:48.760 That's again a slide that Sanjay showed yesterday, 00:58:48.760 --> 00:58:52.540 and I think the nice thing also about RFID 00:58:52.540 --> 00:58:56.350 is that it can really help you do a very 00:58:56.350 --> 00:59:00.310 detailed analysis much more so than you could before. 00:59:00.310 --> 00:59:04.780 And I mean our inspiration for some of that work 00:59:04.780 --> 00:59:09.850 was the scientific management, the work that Taylor 00:59:09.850 --> 00:59:13.990 did almost 100 years ago on really understanding 00:59:13.990 --> 00:59:15.175 the details of shoveling. 00:59:15.175 --> 00:59:16.720 He did these sort of studies on how 00:59:16.720 --> 00:59:18.610 you shovel to try and design what's 00:59:18.610 --> 00:59:20.440 the perfect shovel, right? 00:59:20.440 --> 00:59:22.840 So what happens is that with RFID-- 00:59:22.840 --> 00:59:25.510 and that's something that we've learned recently 00:59:25.510 --> 00:59:29.080 is that RFID really that's the time-in-motion work for you. 00:59:29.080 --> 00:59:32.110 So you no longer need to go with a camera and videotape 00:59:32.110 --> 00:59:34.910 and analyze because RFID tells you what happens. 00:59:34.910 --> 00:59:38.710 So I think that there are major areas for improvement 00:59:38.710 --> 00:59:41.920 that can be researched. 00:59:41.920 --> 00:59:48.430 Now, after doing this analysis, we 00:59:48.430 --> 00:59:56.050 tried and go a bit forward and say, OK, how will the world be? 00:59:56.050 --> 00:59:58.420 Now that we've seen in a few places how 00:59:58.420 --> 01:00:02.230 things are, let's try and look for the future, 01:00:02.230 --> 01:00:03.650 and our rationale-- 01:00:03.650 --> 01:00:08.830 I mean, imagine that fellow in the car, Mr. Ford. 01:00:08.830 --> 01:00:12.730 If Ford could have come to the Harvard Bridge 01:00:12.730 --> 01:00:18.620 and Ford had sat there in the Harvard Bridge for 10 minutes, 01:00:18.620 --> 01:00:23.200 maybe 15 minutes, jump 100 years and then go 01:00:23.200 --> 01:00:25.780 back, just in those 15 minutes he probably 01:00:25.780 --> 01:00:28.640 would know how the world was. 01:00:28.640 --> 01:00:33.980 If you just have a snapshot of a small place, how it evolves, 01:00:33.980 --> 01:00:36.630 you really can tell a lot about the future. 01:00:36.630 --> 01:00:40.700 And I think here, if you work on RFID, probably-- 01:00:40.700 --> 01:00:42.680 and on the supply chain, which is 01:00:42.680 --> 01:00:45.140 where I think there's the most advanced applications, 01:00:45.140 --> 01:00:48.380 by looking at one small place in the supply chain 01:00:48.380 --> 01:00:51.920 and really seeing how RFID impacts that small space 01:00:51.920 --> 01:00:55.710 you can then make some claims as to how the future will be. 01:00:55.710 --> 01:00:58.220 And that's what we've actually try and do 01:00:58.220 --> 01:01:00.890 by looking, having some experience in a few places 01:01:00.890 --> 01:01:07.910 with very deep experience, and so these are some of the things 01:01:07.910 --> 01:01:12.080 that we think will happen, and we probably don't have time. 01:01:12.080 --> 01:01:14.870 I think a trend that we believe will happen 01:01:14.870 --> 01:01:16.640 is for increased fragmentation. 01:01:16.640 --> 01:01:18.860 So there will be a lot of fragmentation, 01:01:18.860 --> 01:01:21.230 and the supply chain will go more 01:01:21.230 --> 01:01:25.010 from a sort of supply-dedicated line of products 01:01:25.010 --> 01:01:27.950 that you ship to more of like a packetized network, 01:01:27.950 --> 01:01:30.960 if you know what packetizing is in telecommunications. 01:01:30.960 --> 01:01:33.740 So we think there will be a lot more fragmentation, 01:01:33.740 --> 01:01:37.190 and we also think that there will be new store formats, 01:01:37.190 --> 01:01:41.700 and a product may become a store in itself, 01:01:41.700 --> 01:01:44.390 and you may have stores that only sell one product, which 01:01:44.390 --> 01:01:48.023 is itself, because with RFID if you encapsulate everything you 01:01:48.023 --> 01:01:49.190 can have all the accounting. 01:01:49.190 --> 01:01:52.700 You can have a little ERP system associated to a tag, 01:01:52.700 --> 01:01:55.160 and that's [INAUDIBLE] to the end in a way. 01:01:55.160 --> 01:01:56.520 [INAUDIBLE] the to end. 01:01:56.520 --> 01:01:57.020 OK? 01:01:57.020 --> 01:01:57.560 Good. 01:01:57.560 --> 01:02:00.740 So, again, this is another example 01:02:00.740 --> 01:02:03.950 where by looking at business cases you have 01:02:03.950 --> 01:02:05.920 to make assumptions, or by doing the analysis 01:02:05.920 --> 01:02:07.670 you make the assumptions of the technology 01:02:07.670 --> 01:02:09.753 and then you need to come up with the application. 01:02:09.753 --> 01:02:14.570 So again, all these things are very, very related. 01:02:14.570 --> 01:02:15.800 So if we think-- 01:02:15.800 --> 01:02:18.530 OK, same problem. 01:02:18.530 --> 01:02:20.870 Good. 01:02:20.870 --> 01:02:26.360 So then a question that we have if we take this view that we 01:02:26.360 --> 01:02:27.920 need to work as a group-- 01:02:27.920 --> 01:02:30.290 you know, I think the question is how we collaborate. 01:02:30.290 --> 01:02:35.570 And I think some of the initiative, the [INAUDIBLE] 01:02:35.570 --> 01:02:37.580 Initiative that MIT has also been 01:02:37.580 --> 01:02:40.520 involved and a bunch of the people here in the audience. 01:02:40.520 --> 01:02:44.020 I think that may be an example of how we need to collaborate, 01:02:44.020 --> 01:02:47.570 so do more of these events and try and see 01:02:47.570 --> 01:02:50.960 what are the different areas that we can work on, 01:02:50.960 --> 01:02:53.960 try and divide the work, and try and make progress together. 01:02:53.960 --> 01:02:59.420 Because I think to me one of the messages 01:02:59.420 --> 01:03:02.180 of the slide that Sanjay showed is that there 01:03:02.180 --> 01:03:04.205 is too much to be done almost. 01:03:04.205 --> 01:03:06.970 It's like there is work for the next 100 years, 01:03:06.970 --> 01:03:10.220 so let's try and organize it, and let's try and build 01:03:10.220 --> 01:03:11.640 a research agenda. 01:03:11.640 --> 01:03:14.690 So these are just slides from the Peloton 01:03:14.690 --> 01:03:16.670 that we don't have time to go through, 01:03:16.670 --> 01:03:19.760 but the idea here is that different players 01:03:19.760 --> 01:03:21.890 from the industry are trying to collaborate and see 01:03:21.890 --> 01:03:23.360 how things are evolving. 01:03:23.360 --> 01:03:27.140 And [INAUDIBLE] over there is like the expert on this right 01:03:27.140 --> 01:03:27.810 now. 01:03:27.810 --> 01:03:30.327 So he can tell you all about it, and this 01:03:30.327 --> 01:03:32.720 is all the different players and how they see evolving, 01:03:32.720 --> 01:03:34.340 and it'd be nice if we had something 01:03:34.340 --> 01:03:35.468 like this for academia. 01:03:35.468 --> 01:03:37.010 What are the different areas of where 01:03:37.010 --> 01:03:38.135 we're going to do research? 01:03:38.135 --> 01:03:40.460 What are the problems we're going to try and solve? 01:03:40.460 --> 01:03:42.470 I mean, Hilbert did this in math. 01:03:42.470 --> 01:03:45.980 You know, he came up with the Hilbert problems 01:03:45.980 --> 01:03:49.640 for the 20th century, and some of them are still not solved. 01:03:49.640 --> 01:03:50.510 OK? 01:03:50.510 --> 01:03:54.720 So very, very briefly. 01:03:54.720 --> 01:03:58.340 So when is it necessary to make an academic discipline? 01:03:58.340 --> 01:04:00.620 So let's say we wanted to make a discipline. 01:04:00.620 --> 01:04:03.110 What are the things that we need to have? 01:04:03.110 --> 01:04:03.740 Right? 01:04:03.740 --> 01:04:06.620 So I think obviously it needs to be a fun thing so we all want 01:04:06.620 --> 01:04:11.420 to work about it, so we can get all these tenured people 01:04:11.420 --> 01:04:13.340 to collaborate, otherwise they won't. 01:04:13.340 --> 01:04:16.970 So then there needs to be relevance, 01:04:16.970 --> 01:04:18.380 which there needs to be something 01:04:18.380 --> 01:04:19.490 that really makes sense. 01:04:19.490 --> 01:04:23.060 There needs to be some form of rigor to it, 01:04:23.060 --> 01:04:25.640 and then I think very important is the distance 01:04:25.640 --> 01:04:26.750 to other disciplines. 01:04:26.750 --> 01:04:28.910 I mean, is this something different 01:04:28.910 --> 01:04:31.190 that deserves its own space, or is it just 01:04:31.190 --> 01:04:34.040 sort of an incremental change? 01:04:34.040 --> 01:04:35.930 And then we need the community, and I 01:04:35.930 --> 01:04:42.500 feel that that's something that we can really have, 01:04:42.500 --> 01:04:43.520 a community. 01:04:43.520 --> 01:04:44.480 And I see people-- 01:04:44.480 --> 01:04:45.830 I have colleagues. 01:04:45.830 --> 01:04:48.530 When my colleagues start doing research on RFID, 01:04:48.530 --> 01:04:49.920 they can't stop. 01:04:49.920 --> 01:04:53.540 It's very hard to find people that stop working on RFID. 01:04:53.540 --> 01:04:55.100 Once they start, they stay with it 01:04:55.100 --> 01:04:57.870 because it's very fascinating, and there's lots of stuff, 01:04:57.870 --> 01:04:59.700 and I think there's a business interest. 01:04:59.700 --> 01:05:02.960 So if you take, for example, civil engineering, 01:05:02.960 --> 01:05:06.725 or architecture, or even computer science or AI, 01:05:06.725 --> 01:05:12.070 I think we have something similar to those disciplines. 01:05:12.070 --> 01:05:16.270 You know, if architecture has its own discipline, 01:05:16.270 --> 01:05:20.150 isn't this something a lot bigger than architecture? 01:05:20.150 --> 01:05:25.220 This is going to change the virtual world in a way that's, 01:05:25.220 --> 01:05:26.420 I mean, not even funny. 01:05:26.420 --> 01:05:29.330 If you look at computer science, all computers 01:05:29.330 --> 01:05:33.380 have all been linked so far to screens, right? 01:05:33.380 --> 01:05:37.250 And all of a sudden RFID now brings computing to the world, 01:05:37.250 --> 01:05:38.870 and the whole world is a computer. 01:05:38.870 --> 01:05:41.270 If that doesn't deserve a discipline-- 01:05:41.270 --> 01:05:42.920 I mean, so that's my view. 01:05:42.920 --> 01:05:43.640 OK? 01:05:43.640 --> 01:05:45.980 I may be wrong. 01:05:45.980 --> 01:05:52.970 So that's my instinct, that we should create a discipline, OK? 01:05:52.970 --> 01:05:55.280 And obviously like civil engineering and architecture, 01:05:55.280 --> 01:05:56.750 we're going to draw from others. 01:05:56.750 --> 01:06:00.140 I mean, it's not like we're going to do everything 01:06:00.140 --> 01:06:03.170 from start, and I think we need to start 01:06:03.170 --> 01:06:05.840 close to the real buildings like architecture 01:06:05.840 --> 01:06:07.040 and civil engineering. 01:06:07.040 --> 01:06:09.090 And I think the best place is the supply chain, 01:06:09.090 --> 01:06:11.330 so that will be my suggested laboratory. 01:06:11.330 --> 01:06:11.900 OK? 01:06:11.900 --> 01:06:15.080 And obviously we need to define the research agenda, and so now 01:06:15.080 --> 01:06:17.600 my final slide. 01:06:17.600 --> 01:06:20.330 In terms of next steps, I think we 01:06:20.330 --> 01:06:22.580 need to start with these Hilbert problems. 01:06:22.580 --> 01:06:26.690 What are the big problems? 01:06:26.690 --> 01:06:31.400 And I think we need to take Sanjay's three columns 01:06:31.400 --> 01:06:33.350 and decide whether it's three or four, 01:06:33.350 --> 01:06:36.500 but then I think we need to go across and say, OK, 01:06:36.500 --> 01:06:41.670 what are some of the threats that we can work on? 01:06:41.670 --> 01:06:45.200 And I think we need to do it with industry and EPCglobal, 01:06:45.200 --> 01:06:48.290 so close to reality, and then we need 01:06:48.290 --> 01:06:51.660 to build the academic community and grow the discipline. 01:06:51.660 --> 01:06:54.120 Anyway, that's just my thoughts. 01:06:54.120 --> 01:06:54.710 OK? 01:06:54.710 --> 01:06:55.630 Thank you. 01:06:55.630 --> 01:06:58.920 [APPLAUSE] 01:07:00.515 --> 01:07:01.807 GUEST SPEAKER 4: Thanks, Brian. 01:07:01.807 --> 01:07:03.300 GUEST SPEAKER 2: You're welcome. 01:07:03.300 --> 01:07:04.133 GUEST SPEAKER 4: OK. 01:07:04.133 --> 01:07:07.330 We actually have built in some time for questions, 01:07:07.330 --> 01:07:08.910 so I'll open the floor to questions, 01:07:08.910 --> 01:07:11.520 and, as we did yesterday, if you would come down 01:07:11.520 --> 01:07:12.746 to the microphone. 01:07:18.470 --> 01:07:21.740 AUDIENCE: Oliver Hedgepath, University of Alaska. 01:07:21.740 --> 01:07:27.590 From all of your academic as well as business discussions 01:07:27.590 --> 01:07:31.430 just now, it jumps out at me that maybe there 01:07:31.430 --> 01:07:33.290 are going to be in the future-- 01:07:33.290 --> 01:07:36.620 again, Brian, if we look ahead like Henry Ford 01:07:36.620 --> 01:07:39.320 from the horseless carriage to now the automobile, the Hummer, 01:07:39.320 --> 01:07:41.780 and all the different terms and metaphors we use. 01:07:41.780 --> 01:07:43.490 Is there a new metric? 01:07:43.490 --> 01:07:46.380 Is there a new measure of performance that we're missing, 01:07:46.380 --> 01:07:47.990 or is there a metric we should think 01:07:47.990 --> 01:07:49.820 about retiring in the future? 01:07:49.820 --> 01:07:52.460 Henry Ford didn't see the measures of performance 01:07:52.460 --> 01:07:54.840 we use today in the automotive industry. 01:07:54.840 --> 01:07:58.760 So I'd like to hear from Simon, you, all of you. 01:07:58.760 --> 01:08:02.090 Any metrics that are occurring or changes to the units 01:08:02.090 --> 01:08:06.910 such as measuring inventory by days versus inventory 01:08:06.910 --> 01:08:08.520 by second? 01:08:08.520 --> 01:08:09.650 Any comment? 01:08:09.650 --> 01:08:12.630 GUEST SPEAKER 3: Do you have any suggestions? 01:08:12.630 --> 01:08:13.594 AUDIENCE: Yes. 01:08:13.594 --> 01:08:15.035 [LAUGHTER] 01:08:15.035 --> 01:08:16.410 GUEST SPEAKER 3: I knew you had-- 01:08:16.410 --> 01:08:17.868 AUDIENCE: But I'm not on the panel. 01:08:17.868 --> 01:08:18.368 [LAUGHTER] 01:08:18.368 --> 01:08:19.618 GUEST SPEAKER 3: But go ahead. 01:08:19.618 --> 01:08:20.490 Say your suggesting. 01:08:20.490 --> 01:08:21.660 AUDIENCE: [INAUDIBLE] 01:08:21.660 --> 01:08:22.493 GUEST SPEAKER 3: OK. 01:08:26.069 --> 01:08:30.300 [INAUDIBLE] 01:08:30.300 --> 01:08:31.731 GUEST SPEAKER 5: I think that-- 01:08:31.731 --> 01:08:34.590 yeah, this is working. 01:08:34.590 --> 01:08:39.760 You're right that the metric will change as we move forward. 01:08:39.760 --> 01:08:42.420 I think right now in terms of the metric 01:08:42.420 --> 01:08:48.630 on readability, read rates, appropriate tags, antennas, 01:08:48.630 --> 01:08:53.819 that sort of thing, that's only in its infancy of developing 01:08:53.819 --> 01:08:54.810 those standards. 01:08:54.810 --> 01:08:57.990 And I think we've got to learn from the barcoding 01:08:57.990 --> 01:09:03.149 industry of printing barcodes, and readability of barcodes, 01:09:03.149 --> 01:09:06.270 and how that transferred from the initial stages 01:09:06.270 --> 01:09:09.420 to business as usual of the business sort 01:09:09.420 --> 01:09:14.490 of working with suppliers on standards 01:09:14.490 --> 01:09:15.870 for barcode technology. 01:09:15.870 --> 01:09:17.800 So we should learn from the past. 01:09:17.800 --> 01:09:19.170 You're right. 01:09:19.170 --> 01:09:21.609 We've got an opportunity to fast track, 01:09:21.609 --> 01:09:25.080 but in terms of setting those benchmarks, 01:09:25.080 --> 01:09:26.580 I think we're at a very early stage. 01:09:26.580 --> 01:09:32.245 And in terms of measuring the supply chain and efficiencies, 01:09:32.245 --> 01:09:34.620 you know, I guess we don't know what we don't know today. 01:09:34.620 --> 01:09:38.250 And we're starting to see the first signs of that. 01:09:38.250 --> 01:09:41.430 And a few suppliers that we're working with 01:09:41.430 --> 01:09:43.560 are starting to see some of those wows 01:09:43.560 --> 01:09:50.189 and opening their eyes to what they believed were average lead 01:09:50.189 --> 01:09:53.850 times and actually seeing natural lead times, which 01:09:53.850 --> 01:09:56.400 identifies opportunities that may or may not 01:09:56.400 --> 01:09:58.420 be solved with RFID, but at least it's 01:09:58.420 --> 01:10:00.930 showing where opportunities exists, where they can actually 01:10:00.930 --> 01:10:04.980 then go and change a process to speed that product through. 01:10:04.980 --> 01:10:08.160 GUEST SPEAKER 4: If I can add one thing to what-- 01:10:08.160 --> 01:10:10.740 if I could add one thing to what Simon was saying, I think-- 01:10:10.740 --> 01:10:12.157 because he said we don't know what 01:10:12.157 --> 01:10:13.710 we don't know at this point. 01:10:13.710 --> 01:10:17.220 And I somewhat quote Gary Cooper, 01:10:17.220 --> 01:10:21.660 the CIO at Tyson when he said the aha moments are yet 01:10:21.660 --> 01:10:22.170 to come. 01:10:22.170 --> 01:10:25.260 And I'll use an example from some 01:10:25.260 --> 01:10:28.740 of the early work at Walmart that we noticed when 01:10:28.740 --> 01:10:31.320 we started looking at the data. 01:10:31.320 --> 01:10:33.930 What we call the case cycles, the movements of boxes 01:10:33.930 --> 01:10:37.170 from the back room to the sale's floor and then back again, 01:10:37.170 --> 01:10:38.987 that wasn't anything or-- 01:10:38.987 --> 01:10:40.320 Simon, correct me if I'm wrong-- 01:10:40.320 --> 01:10:41.950 that we kind of went in looking to say, 01:10:41.950 --> 01:10:43.950 hey, let's see how many times this is happening. 01:10:43.950 --> 01:10:45.570 The data started telling us this. 01:10:45.570 --> 01:10:47.610 Well, that actually could be now a metric 01:10:47.610 --> 01:10:52.680 of the efficiency of the shelf-stocking function 01:10:52.680 --> 01:10:54.480 that we're seeing these boxes going out. 01:10:54.480 --> 01:10:57.930 But beforehand, nobody had written down anywhere, oh, 01:10:57.930 --> 01:10:59.762 let's look at case cycles. 01:10:59.762 --> 01:11:01.470 That was revealed to us through the data, 01:11:01.470 --> 01:11:03.780 and I think we've got a lot of that yet to come, 01:11:03.780 --> 01:11:07.468 and I think again I'll go back to the slide that I had on 01:11:07.468 --> 01:11:09.510 whether we view things as incremental or radical. 01:11:09.510 --> 01:11:11.980 Especially in that radical category, 01:11:11.980 --> 01:11:14.530 I don't think we yet know what some of those metrics may be, 01:11:14.530 --> 01:11:17.490 and I think they'll be revealed to us as we understand the data 01:11:17.490 --> 01:11:19.343 and how we can deploy that technology. 01:11:19.343 --> 01:11:20.260 GUEST SPEAKER 2: Yeah. 01:11:20.260 --> 01:11:22.110 I think in terms of metrics. 01:11:22.110 --> 01:11:29.070 I published a paper in like '98 forecasting 01:11:29.070 --> 01:11:31.710 what's happening with Google, these metrics where 01:11:31.710 --> 01:11:36.060 every little ad has its own metric and you measure 01:11:36.060 --> 01:11:36.640 everything. 01:11:36.640 --> 01:11:38.650 And I think that's what's going to happen. 01:11:38.650 --> 01:11:42.150 So we are going to micro measure absolutely everything, 01:11:42.150 --> 01:11:45.570 and we're going to know whether is it worth it to take it right 01:11:45.570 --> 01:11:48.060 or take a left, and associates will know should I 01:11:48.060 --> 01:11:49.660 go to the right or to the left. 01:11:49.660 --> 01:11:51.060 What is it more likely? 01:11:51.060 --> 01:11:54.540 That I'm going to generate value to do zoning, 01:11:54.540 --> 01:11:56.920 and we're going to make sure absolutely everything. 01:11:56.920 --> 01:11:59.730 And I think the metric will be sort of event-driven. 01:11:59.730 --> 01:12:02.850 Anything that you do will get a metric of how positive it is, 01:12:02.850 --> 01:12:04.350 and you will have all these computer 01:12:04.350 --> 01:12:06.900 scientists helping come up with measures and ways 01:12:06.900 --> 01:12:08.470 to improve it. 01:12:08.470 --> 01:12:09.247 Yes. 01:12:09.247 --> 01:12:10.080 AUDIENCE: All right. 01:12:10.080 --> 01:12:10.980 Thank you. 01:12:10.980 --> 01:12:12.960 GUEST SPEAKER 4: Thank you. 01:12:12.960 --> 01:12:15.945 Question over here. 01:12:15.945 --> 01:12:21.370 AUDIENCE: [INAUDIBLE] I'm [INAUDIBLE] from supply chain 01:12:21.370 --> 01:12:24.610 and information system at Penn State. 01:12:24.610 --> 01:12:27.640 My question is about the actions-- 01:12:27.640 --> 01:12:30.250 in particular, remedial actions. 01:12:30.250 --> 01:12:34.870 Every speaker's talked about changed business processes, 01:12:34.870 --> 01:12:37.180 so I want go narrow. 01:12:37.180 --> 01:12:40.630 Can you tell me examples of some actions in those business 01:12:40.630 --> 01:12:41.380 processes? 01:12:41.380 --> 01:12:45.460 So, Dick mentioned if you see some alert 01:12:45.460 --> 01:12:48.160 on promotional items, you can call them. 01:12:48.160 --> 01:12:52.630 I would call that remedial actions, whereas in the health 01:12:52.630 --> 01:12:56.200 industry the pedigree requirement, I would say it's 01:12:56.200 --> 01:12:59.380 changed business processes, but it's mainly 01:12:59.380 --> 01:13:01.090 recording the history. 01:13:01.090 --> 01:13:05.170 It's trace and track, and I want to add that it's not just 01:13:05.170 --> 01:13:07.780 operational-level actions. 01:13:07.780 --> 01:13:12.170 At the strategic-level actions too again use Dick's example. 01:13:12.170 --> 01:13:16.870 If you can alert and you can see the displacement, 01:13:16.870 --> 01:13:20.350 maybe that means you can have a different kind of contract 01:13:20.350 --> 01:13:26.680 on promotions at the strategic level with your retailer 01:13:26.680 --> 01:13:28.610 now that the supplier can see better. 01:13:28.610 --> 01:13:31.750 So, again, my question is can you 01:13:31.750 --> 01:13:34.540 tell us some actions and remedial actions 01:13:34.540 --> 01:13:35.770 that you can take? 01:13:35.770 --> 01:13:37.540 Thank you. 01:13:37.540 --> 01:13:39.310 GUEST SPEAKER 4: So, this would probably 01:13:39.310 --> 01:13:42.910 be for Dick, Simon, and Klaus. 01:13:42.910 --> 01:13:45.130 What are some actions that you've actually taken 01:13:45.130 --> 01:13:50.278 based upon data or process changes that you've made? 01:13:50.278 --> 01:13:52.570 GUEST SPEAKER 5: Let me just comment on the observation 01:13:52.570 --> 01:13:58.950 you made around [INAUDIBLE] that Dick referenced. 01:13:58.950 --> 01:14:01.230 In the proof of concept in the trials, 01:14:01.230 --> 01:14:04.090 yes, you would react to those situations, 01:14:04.090 --> 01:14:06.270 but going forward what that identifies 01:14:06.270 --> 01:14:08.230 is how we can be proactive. 01:14:08.230 --> 01:14:11.280 And so we're not always chasing and firefighting, 01:14:11.280 --> 01:14:14.590 and so that on promotions, for example, 01:14:14.590 --> 01:14:18.167 instead of getting to a situation where today is D-day, 01:14:18.167 --> 01:14:20.500 and that product should have been out on the sales floor 01:14:20.500 --> 01:14:24.090 and it's not, actually using the data to count down 01:14:24.090 --> 01:14:28.140 and to alert in advance to store management and associates. 01:14:28.140 --> 01:14:31.710 So a week out it's, OK, you're getting prepared for this. 01:14:31.710 --> 01:14:33.465 All the merchandise is there. 01:14:33.465 --> 01:14:36.240 In two days out, OK, that should be moving out, 01:14:36.240 --> 01:14:39.810 and it's not, so that we're actually more proactive 01:14:39.810 --> 01:14:41.370 and helping the associates and store 01:14:41.370 --> 01:14:43.890 management get that product out on time 01:14:43.890 --> 01:14:45.510 rather than just reacting. 01:14:48.530 --> 01:14:50.780 GUEST SPEAKER 3: I would agree very much with Simon. 01:14:50.780 --> 01:14:54.200 I think it's a combination, and you kind of answered, 01:14:54.200 --> 01:14:58.550 I think, your own question by saying we're using the data, 01:14:58.550 --> 01:15:01.520 we're using the alerts to give associates 01:15:01.520 --> 01:15:06.320 information proactively in advance of the occurrence. 01:15:06.320 --> 01:15:08.310 And then it comes down to training 01:15:08.310 --> 01:15:13.940 them to use new equipment, handheld readers, which 01:15:13.940 --> 01:15:19.260 give them the ability to do their job faster, 01:15:19.260 --> 01:15:21.013 more accurately. 01:15:21.013 --> 01:15:22.430 GUEST SPEAKER 5: The other thing I 01:15:22.430 --> 01:15:24.830 would add as well is that we talk 01:15:24.830 --> 01:15:27.980 about the out-of-stock study that the U of A conducted 01:15:27.980 --> 01:15:29.900 and the results we saw from that, 01:15:29.900 --> 01:15:32.600 but what that doesn't show and what is really hard to measure 01:15:32.600 --> 01:15:35.270 is how many out-of-stocks did we prevent. 01:15:35.270 --> 01:15:39.080 How many products did we save from going 01:15:39.080 --> 01:15:43.040 to the last two or three bottles of a product on the shelf? 01:15:43.040 --> 01:15:45.380 Which then maybe dented, or nobody 01:15:45.380 --> 01:15:48.210 wants to pick the last item off the shelf. 01:15:48.210 --> 01:15:51.530 How many of those instances did we avert? 01:15:51.530 --> 01:15:54.110 And keep that shelf fuller and the display 01:15:54.110 --> 01:15:57.750 fuller, which we all know then sells more of that product. 01:15:57.750 --> 01:16:00.590 So I think we are being proactive in terms of that 01:16:00.590 --> 01:16:02.840 and obviously for those fast-selling items 01:16:02.840 --> 01:16:05.400 or things that didn't get executed correctly. 01:16:05.400 --> 01:16:07.400 Then we're getting that product out much quicker 01:16:07.400 --> 01:16:09.772 to fill that gap as well. 01:16:09.772 --> 01:16:10.730 GUEST SPEAKER 4: Klaus. 01:16:10.730 --> 01:16:13.280 GUEST SPEAKER 1: And from our point of view 01:16:13.280 --> 01:16:18.530 is in former times it was only a game between the supplier 01:16:18.530 --> 01:16:21.200 and the retailer, and the logistics service 01:16:21.200 --> 01:16:24.050 provider was not existent. 01:16:24.050 --> 01:16:28.970 And if you have then a proactive way that you bring forward, 01:16:28.970 --> 01:16:32.150 that you go into that technology that you learn, 01:16:32.150 --> 01:16:35.780 then you can show that you are connecting 01:16:35.780 --> 01:16:42.920 a binding medium and to help those to improve their supply 01:16:42.920 --> 01:16:43.800 chain. 01:16:43.800 --> 01:16:49.280 And this is what we learned out of the overall RFID trials, 01:16:49.280 --> 01:16:51.350 and the other one is that you have 01:16:51.350 --> 01:16:57.080 to work very close together, yet you have exchanged data. 01:16:57.080 --> 01:16:59.510 The biggest problem in the beginning 01:16:59.510 --> 01:17:05.690 was to have the right data available to start for RFID. 01:17:05.690 --> 01:17:06.456 Yeah. 01:17:06.456 --> 01:17:07.330 GUEST SPEAKER 3: OK. 01:17:07.330 --> 01:17:12.000 I think also having better accuracy 01:17:12.000 --> 01:17:17.280 is going to lead to more accountability and better 01:17:17.280 --> 01:17:18.150 forecasting. 01:17:18.150 --> 01:17:22.110 For example, one of the promotional examples I used-- 01:17:22.110 --> 01:17:23.340 promotion didn't do. 01:17:23.340 --> 01:17:27.780 Well, did it not do well because it didn't get out 01:17:27.780 --> 01:17:28.950 to the floor on time? 01:17:28.950 --> 01:17:33.570 Or did it not do well because it didn't attract the consumer 01:17:33.570 --> 01:17:34.170 demand? 01:17:34.170 --> 01:17:36.960 Having accurate data which allows 01:17:36.960 --> 01:17:40.080 us to execute the display flawlessly 01:17:40.080 --> 01:17:43.110 is then going to allow the manufacturer 01:17:43.110 --> 01:17:45.960 to be more accountable to the retailer for all 01:17:45.960 --> 01:17:47.820 the right kinds of products and promotions, 01:17:47.820 --> 01:17:50.310 the retailer more accountable to the manufacturer, 01:17:50.310 --> 01:17:54.630 and together that will create a more ideal forecasting 01:17:54.630 --> 01:17:56.207 mechanism. 01:17:56.207 --> 01:17:57.040 GUEST SPEAKER 4: OK. 01:17:57.040 --> 01:17:58.100 Thank you. 01:17:58.100 --> 01:17:58.853 Harold. 01:17:58.853 --> 01:17:59.520 AUDIENCE: Hello. 01:17:59.520 --> 01:18:01.980 My name is Harold Beck from the University of Sherbrooke. 01:18:01.980 --> 01:18:04.013 I'm a professor of marketing. 01:18:04.013 --> 01:18:05.430 First of all, I'd just like to say 01:18:05.430 --> 01:18:08.040 I'm really excited about everything I heard today, 01:18:08.040 --> 01:18:10.613 and I have so many questions my head is spinning, but, Bill, 01:18:10.613 --> 01:18:12.780 I'm only going to start with one question right now. 01:18:12.780 --> 01:18:13.280 OK? 01:18:13.280 --> 01:18:15.330 [LAUGHTER] 01:18:15.330 --> 01:18:18.750 So I'm really glad to see on a retail point of view 01:18:18.750 --> 01:18:21.780 the diffusion of the RFID technology within the store, 01:18:21.780 --> 01:18:27.060 and we're going more and more towards promotions eventually 01:18:27.060 --> 01:18:30.090 helping customers do cross-selling and up-selling 01:18:30.090 --> 01:18:31.180 opportunities. 01:18:31.180 --> 01:18:34.410 Now, I know a while back Gillette did a pilot 01:18:34.410 --> 01:18:37.800 with RFID tags and the whole Caspian movement of consumers 01:18:37.800 --> 01:18:42.120 against supermarket privacy invasion and numbering. 01:18:42.120 --> 01:18:45.810 They started boycotting Gillette because of that initiative, 01:18:45.810 --> 01:18:51.840 and I know also Walmart had some difficulties with consumer 01:18:51.840 --> 01:18:54.210 tracking within their stores a while back. 01:18:54.210 --> 01:18:56.670 Now, my question is do you foresee 01:18:56.670 --> 01:19:00.300 in the near future using RFID in order 01:19:00.300 --> 01:19:02.592 to interact with consumers. 01:19:02.592 --> 01:19:04.050 And the second part of the question 01:19:04.050 --> 01:19:09.990 is, what are you doing against the possible push-back 01:19:09.990 --> 01:19:14.350 from different consumer groups? 01:19:14.350 --> 01:19:16.480 GUEST SPEAKER 3: Well, just two quick answers. 01:19:16.480 --> 01:19:20.540 I think right now it is a supply chain technology. 01:19:20.540 --> 01:19:22.900 It is a technology that's going to better enable 01:19:22.900 --> 01:19:26.650 us to satisfy shopper needs through supply chain 01:19:26.650 --> 01:19:28.330 improvements. 01:19:28.330 --> 01:19:32.350 So, no, we're not thinking about what comes beyond that. 01:19:32.350 --> 01:19:36.490 Secondly, over the last few years 01:19:36.490 --> 01:19:42.220 through the good work of EPCglobal and EPCglobal 01:19:42.220 --> 01:19:45.010 subscribers who sit on the public policy steering 01:19:45.010 --> 01:19:47.950 committee, principles and guidelines 01:19:47.950 --> 01:19:50.740 have been put in place for the responsible use 01:19:50.740 --> 01:19:52.390 of the technology. 01:19:55.037 --> 01:19:56.870 GUEST SPEAKER 5: I'll just add to that then. 01:19:56.870 --> 01:20:00.080 I think it is around communicating that message, 01:20:00.080 --> 01:20:04.010 educating our associates and customers of why we are using 01:20:04.010 --> 01:20:05.990 it, and how it's going to benefit them 01:20:05.990 --> 01:20:10.050 from us using it in the supply chain to better serve them. 01:20:10.050 --> 01:20:13.470 AUDIENCE: Do you see within the next maybe 10 years 01:20:13.470 --> 01:20:17.250 the possibility of having enough education among the consumer 01:20:17.250 --> 01:20:21.360 in order to be able to use that technology to help them be more 01:20:21.360 --> 01:20:22.860 informed about their purchases? 01:20:25.670 --> 01:20:29.090 GUEST SPEAKER 5: I think like the EPC 01:20:29.090 --> 01:20:33.380 and the logo will become ubiquitous, 01:20:33.380 --> 01:20:35.480 much the same as Intel inside. 01:20:35.480 --> 01:20:37.760 You know, consumers will relate to that 01:20:37.760 --> 01:20:42.667 and see the advantages of that case or product having that-- 01:20:42.667 --> 01:20:43.500 AUDIENCE: Thank you. 01:20:43.500 --> 01:20:44.667 GUEST SPEAKER 5: [INAUDIBLE] 01:20:44.667 --> 01:20:45.820 GUEST SPEAKER 3: Question? 01:20:45.820 --> 01:20:46.362 AUDIENCE: Hi. 01:20:46.362 --> 01:20:48.790 I'm John [INAUDIBLE] from Mars Incorporated. 01:20:48.790 --> 01:20:50.600 So my question's about the benefit case, 01:20:50.600 --> 01:20:52.780 and if we take Dick's kind of diffusion model 01:20:52.780 --> 01:20:55.660 and cross it with Klaus's supply chain model 01:20:55.660 --> 01:20:57.490 and you look at the benefits and the costs, 01:20:57.490 --> 01:20:59.230 they seem to be lumpily distributed 01:20:59.230 --> 01:21:00.600 through that matrix. 01:21:00.600 --> 01:21:03.040 So, one of the barriers to adoption 01:21:03.040 --> 01:21:05.530 is the dislocation or the benefit and the cost, 01:21:05.530 --> 01:21:08.470 and I know that's starting to cause 01:21:08.470 --> 01:21:12.490 slowing the rate of adoption just even thinking about it, 01:21:12.490 --> 01:21:15.730 and not even working but thinking. 01:21:15.730 --> 01:21:18.580 If that's a barrier to thinking, it seems to me one of the areas 01:21:18.580 --> 01:21:21.970 and if the combination between the cells in that matrix 01:21:21.970 --> 01:21:25.090 are really where the benefits are in collaboration. 01:21:25.090 --> 01:21:27.290 So I'd like you to answer two questions. 01:21:27.290 --> 01:21:29.380 One is, what about that benefit case? 01:21:29.380 --> 01:21:31.960 Is it really as lumpily distributed as it seems? 01:21:31.960 --> 01:21:35.680 And two, is there a need for research in collaborative tools 01:21:35.680 --> 01:21:38.260 to help the supplier or the manufacturer 01:21:38.260 --> 01:21:40.150 and the retailer to get together to have-- 01:21:40.150 --> 01:21:42.397 if the benefit's in the collaboration space, 01:21:42.397 --> 01:21:44.230 do we need some research to help drive that? 01:21:44.230 --> 01:21:46.323 Because I think that's a big gap right now. 01:21:46.323 --> 01:21:48.490 GUEST SPEAKER 3: I think the answer to your question 01:21:48.490 --> 01:21:49.340 is absolutely. 01:21:49.340 --> 01:21:54.780 The more research we have to understand the collaboration, 01:21:54.780 --> 01:21:58.870 so understand the cause and effect of putting an EPC 01:21:58.870 --> 01:22:02.620 tag on a product, and being able to track that product, 01:22:02.620 --> 01:22:10.280 and then adjust process to increase the efficiency of flow 01:22:10.280 --> 01:22:13.450 to the shelf to the consumer is clearly 01:22:13.450 --> 01:22:15.880 where there needs to be collaboration 01:22:15.880 --> 01:22:19.270 between manufacturer, retailer, and academia. 01:22:19.270 --> 01:22:21.640 I think what I tried to communicate 01:22:21.640 --> 01:22:27.500 is we believe that you can't do everything at once. 01:22:27.500 --> 01:22:28.863 You have to pick your lumps. 01:22:28.863 --> 01:22:29.530 AUDIENCE: Right. 01:22:29.530 --> 01:22:32.440 GUEST SPEAKER 3: We've picked displays, promotional displays, 01:22:32.440 --> 01:22:38.230 new [INAUDIBLE] as a big lump that can justify 01:22:38.230 --> 01:22:42.940 a favorable benefit-cost ratio. 01:22:42.940 --> 01:22:48.190 And some higher advantage type products like Gillette blades 01:22:48.190 --> 01:22:51.620 and razors or Crest Whitestrips that are high-margin, 01:22:51.620 --> 01:22:55.930 high-velocity, high-shrink, they are lumps that 01:22:55.930 --> 01:22:57.550 can justify the cost. 01:22:57.550 --> 01:23:01.820 So start there because you can't do everything at one time, 01:23:01.820 --> 01:23:06.520 and then based on that learning you want to better understand 01:23:06.520 --> 01:23:09.460 how to do other products, how to smooth out the lumps, 01:23:09.460 --> 01:23:13.962 and get consistency across your product line. 01:23:13.962 --> 01:23:14.920 GUEST SPEAKER 4: Klaus. 01:23:14.920 --> 01:23:17.128 GUEST SPEAKER 1: Yeah, we have done exactly the same. 01:23:17.128 --> 01:23:20.170 We are looking more to the fashion industry 01:23:20.170 --> 01:23:23.020 because we can see that the garment which 01:23:23.020 --> 01:23:27.490 costs $100 or $200 can bear more the costs, 01:23:27.490 --> 01:23:32.960 but we have more the efficiency there, and we will do this. 01:23:32.960 --> 01:23:35.710 We will roll out more on the fashion side, 01:23:35.710 --> 01:23:39.610 and we will do trials on the other sides to learn. 01:23:39.610 --> 01:23:44.370 This is our philosophy, and this we will follow.