RFID in a 3PL Enviornment

Dick Pocek, Director of Logistics

Jim Dean, Manager of Customer Supply Chain
About Energizer
 - Energizer Holdings Inc. -
(Eveready Battery Company & Schick-Wilkinson Sword
)

Energizer Holdings, Inc.(Energizer), incorporated in 1999, is one of the world's

largest manufacturer of dry cell batteries and flashlights, and a global leader in the
dynamic business of providing portable power
Energizer is the successor to over 100 years of expertise in the battery and
lighting products industry, formerly Eveready Battery Company 1905 -1999
Prior to Eveready name, known as National Carbon Company from 1886 -1905

Energizer’s battery and flashlight subsidiaries offer a full line of products in five
major categories: alkaline, carbon zinc, miniatures and rechargeable batteries; and
lighting products
In January 2003 Energizer announced purchase of Schick-Wilkinson Sword razor
business from Pfizer Inc. for $930 million
Schick-Wilkinson Sword is the second-largest shaving-products company in the
world
Energizer, Eveready and Schick-Wilkinson Sword brands are marketed and sold
in over 140 countries
National Carbon
Co. 1st dry cell National Carbon Eveready Battery Co.
battery American buys American Ever becomes a subsidiary of
Ever Ready Co. Ready Ralston Purina independent Energizer
first tubular and forms Union buys Eveready Holdings Inc., NYSE ticker
flashlight Carbide Battery Co symbol ENR

1896 1914 1986 April 4, 2000

 A History of Innovation
Invent
first dry First to Invent first Invent first First
cell freshness commercial lithium on-
battery date Watch battery battery
(CZ) batteries battery (AA) tester

1896 1898 1931 1955 1957 1959 1980 1990 1995 2001

Invent first Invent Invent First First

flashlight. first first zero- hearing
Invent first miniature alkaline added aid
D size battery battery mercury battery
battery. for battery dispenser
hearing
aids.
Energizer innovation extends to branded and private label products,
as well as our account teams and approach to category
management.
 A Global Production
Complex

Walkerton, Canada
✤ Bennington VT La Chaux De
Garrettsville, OH
Marietta, OH Tianjin, China
Maryville ✤ St. Albans VT Fonds, Switzerland
✤✤
Tanfeield Lea, U.K.
Asheboro Caudebec, France Bogang, China Philippine
s
Egypt Indonesia
Malaysia
Singapore
Sri
Lanka
Kenya

Singular Focus + Global Supply Chain =

Efficiency
Wal-Mart Pilot
Wal-Mart Detailed Expansion
Step 1: January 2005 – 3DC’s, 102 Stores, 36 Clubs
– 6068 Sanger, TX (RDC)
– 6064 Cleburne, TX (GDC)
– 8235 Desoto, TX (X-Dock)
• Step 2: June 2005 – 7 DC’s, 241 more Stores, 73 more Clubs
– 6016 New Braunfels, TX (RDC)
– 6036 Palestine, TX (RDC)
– 6056 Terrell, TX (GDC)
– 6083 Temple, TX (GDC)
– 7010 New Caney, TX (GDC)
– 6698 Dayton, TX (X-Dock)
– 8234 Searcy, AR (X-Dock)
• Step 3: October 2005 – 2 DC’s, 202 more Stores
– 6018 Searcy, AR (RDC)
– 6048 Opelousas, LA (RDC)
• 2005 Total: (12 DC’s), 545 Stores, 109 Clubs = 654 facilities
 Energizer and SWS SKU Landscape
Wal-Mart
80% of SKUs are Break-Pack and will not be tagged initially.

Private Label SKUs will not be tagged

Ship mostly mixed pallets not requiring pallet tags

Sam’s
TL environment

100% of SKUs will be tagged at case and pallet level.

Energizer RFID Lab
Tag and Product Testing

Tested different carton

types
Tag orientation

 Tag placement

Different Tags
Energizer’s 3PL RFID Expectations
“Slap and Ship” implementation

Processes that are easy to transfer between

sites
Costs spread over customer base

Flexible systems

Tracking capability
 RFID Energizer/3PL Issues
Cartons cannot be opened at the warehouse
due to the use of wrap-around automated
carton forming upstream
Size limitation of some cartons

Order cycle time issues

The Future of Barcodes
External Energizer’s position
on bar code utilization
UPC is that there will be no
change to our use of
ITF14 barcodes near term.
UCC128 Current internal
projects will continue
Internal as scheduled.
EAN128 External bar code
requirements will be
UCC128 dictated by the market
place.
 Energizer’s 3PL Expectations

Distribution technology leader

Innovator

Value added services

Stable management team

Global capabilities

Partnership
How Does RFID Compare With Other Major
Information Technology
Development & Deployment Milestones ?
Similarities: Internet

The development or deployment of new IT

solutions
9
199
 Potentially disruptive technology integrations

 Fluid landscape with regard to products and

vendors Y2K
 Massive influx of resources to respond quickly

 Market Position Consideration - Lead or Lag?

RFID
Manufacturers Issues Regarding RFID
Deployment In Supply Chain
Applications

Customers Are Starting To Require RFID Use

•Retailers

•Government (i.e. DoD & FDA)

Limited Resources are available to meet the challenge

•Personnel

•Financial Resources

•Time
Many companies have varying degrees of success when using consultants

Can I really find an ROI for implementing RFID in my business?

How can you make RFID deployments operationally viable?

Few companies have real experience with this emerging technology

Who are my strategic partners that could help with this initiative?
Solution Evolution
Moving towards customer integration
Managed
Transportation

Fulfillment

Logistics
Reverse
Order
SCM
Managed
Transportation

Fulfillment
Vendor

Logistics
Reverse
Order
Managed Inventory
LLP
Complexity

Vendor
Managed Inventory
RFID assists business
Warehousing X-Docking Transport
integration in that it provides
real time data and visibility,
Third Party Provider involving logistical providers
who service companies
Warehousing throughout the supply chain
Service Provider
$

Value Creation Potential

5% to 10% typical cost savings 10% to 20% typical cost savings
 Generic Supply Chain Solution Sets

Supply Chain Management

Suppliers Raw Material Plant End

Raw Material Manufacturing Finished Goods DC Operations / Outbound
(Domestic & Transportation Shuttles Customer/
Inventory Warehouse Transportation Finished Goods Transportation
International) Consumer
Management Operations Inventory Mgt.
Supplier Inbound Inbound Raw Inbound In-plant Outbound Finished Goods Outbound Customer
Management Transportation Materials Transportation Services Transportation Inventory Transportation Management
International Raw Materials International
Freight Inventory Freight

Project Management
Continuous Improvement
Knowledge Management
Automatic identification and data collection technologies are used in all parts
of the supply chain today, thus requiring the potential integration of RFID into
these areas in the days ahead.
 RFID Can Be Used In Various Points Throughout The Supply
Chain
• Manufacturing - discretely identify products, the facility in which it
was produced and the date of manufacture
• Distribution Centers - accurate inventory control and order
fulfillment activities
• Retailers - track shelf activity, trigger automated fulfillment,
improve customer checkout, billing and shrinkage
• Reverse Logistics - evaluate merchandise return speed to DCs,
disposition of returned products, financials
• Container/Yard Management - Real-Time Locating Systems
(RTLS) triangulate the relative position of tagged items. Useful also
for specialized Kanban systems (requires expensive RFID Tags)
• Asset Tracking – tracking items such as returnable containers and
high value products
Ultimately, the big cost savings and service benefits of RFID will come from a dramatically enhanced
ability to manage inventory and orders across time and the supply chain. 3PLs are already firmly
established in delivering these type of logistical applications.
RFID – How Can It Affect Supply Chain Partners In The
Future?
• Customers will likely keep requesting the use of RFID
and other emerging supply chain technologies.

• Resources throughout the supply chain could possibly

be positively or negatively impacted by RFID
deployments (i.e. personnel, inventory, money,
equipment, space …).

• Supply Chain information technology

implementations will have special focus placed on RFID
integration

• Trading partners will have to figure out how to

manage the data collected from RFID applications and
use it for advanced demand planning strategies.

• 3PLs with RFID experience will be able to assist

companies across the entire supply chain.
3PL RFID Case Study: Exel PLC

Presentation courtesy of Exel PLC

Executive Summary (RFID)

The current state of RFID:

 An emerging technology

 Many critical issues

 Ready for wide adoption in the supply chain?

As supply chain leaders, Exel is responding to this

technology by directing global and local teams to
work with customers, RFID experts, and vendors to
understand the value, cost, challenges and
opportunities related to this technology.

Given Exel’s market position, we have a unique opportunity to

understand technology from multiple business applications,
across different supply chains.
 Factors Driving Exel’s Response to RFID
Exel’s RFID strategy positions Exel to better understand RFID and
create value:
 Customers
- Retailer compliance
- Opportunity to provide customer
channel solutions
 Operations efficiency
- To be proven
 Supply chain visibility in certain services…
- Global freight management
- Demand planning
- Track/trace
- Returnable containers
 …and broader future visibility leading to
enhanced supply chain performance and
solutions
Exel RFID Organization

Global RFID
Strategy Steering Committee
Team

RFID Core Team Communication & Consistency

Market Vertical & Account Specific Teams Execution

Within each team all operational functions and market

verticals are represented, thus making sure that RFID
solutions are looked at holistically and that best practices are
shared.
 So what has Exel done to date. . .

•Participated in some 8 – 10 major pilots globally

Theatres – Americas, EMEA & APAC
Industry Verticals – Retail, Consumer & Technology
Standards – EPCglobal and non-EPCglobal RFID

•Became a member of EPCglobal

•RFID deployments/applications inclusive of:

 Numerous pieces of material handling equipment
 Dock doors
 Staging areas and pallet racking
 Pallets
 Stretch wrappers
 Containers and high value assets
Exel RFID Application Examples

Dock Door RFID Portal RFID Enabled Rack Garment On Hanger RFID Portal

RFID Enhanced RFID Enabled Fork-lift Mounted RFID

Stretch Wrap Machine Bulk & Staging Areas

RFID Centers of Excellence Overview

• Create a theatre specific RFID laboratories where Exel and partners can test RFID
application
– Americas, Europe and Asia
• Involve RFID, WMS, system integration, material handling and other technology
vendors as partners
• Multiple applications of the technology will be reviewed in these centers
• Vendor and technology “agnostic” due to fluid RFID landscape (standards and
technology in a state of flux)
• Open to customers to test their RFID applications

Centers of Excellence activities will help our clients and our account teams
determine the best applications for RFID in supply chain applications.
 RFID Center Of Excellence
Preliminary Layout

Americas Facility

2 3 '- 8 "

B u lk S to r a g e ( 4 D e e p )
13'-0"
Conveyer
53'-11"

30'-0"

R a c k S to ra g e
12'-0"

R a c k S to ra g e
12'-0"

C o m p u te rs &
D esks
14'-0"

Matrics Readers

Center Of Excellence will focus on real-world tests for RFID usage in areas such as
shipping & receiving, putaway & picking, label placement, material handling and
systems integration.
RFID Project Challenges
• New and existing RFID products are not necessarily interoperable
with other RFID vendor offerings
• Product availability and product development can delay pilots
• Many companies are selling RFID products, but total RFID integration
can be a challenge (tags, readers, printers, middleware)
• UHF RFID hardware can interfere with existing 900 MHz RF systems
operating within DCs, requiring countermeasures or upgrades
• Specific product & packaging combinations frequently prevent reading
of cases at the center of a pallet
• EPCglobal Generation 2 RFID Standard Ratification Date ???
• 6-12 month product development cycle after EPCglobal Gen. 2
approved
• ROIs for RFID technology deployments can be difficult to obtain
• Data management (EDI, visibility, order management) is not currently a
requirement from mass retailers even though this will be important
Exel Client RFID Activities & Observations
• Mass Retailer RFID mandates have generated the following:
– Manual “slap & ship” of RFID tagged skus
– Semi-automated tagging of skus (e.g. conveyor augmented solutions)
• Automated/semi-automated RFID tagging solutions need scalability
and flexibility as part of a long-term solution
• SKU quantities used in RFID trials have been limited (20 or less typ.)
• RFID tagging is being pushed further into the supply chain based on
the difficulty and expense of RFID tagging products at the plants
• Asset tracking is the primary means of deploying RFID outside of
current mass retailer mandates
• Outside of the Retail/CPG Market activities, Pharmaceutical and
Technology Market RFID applications are on the rise
• Exel has been and continues to be brought into RFID projects to
assure operational viability and proper execution of RFID projects
QUESTIONS ???