Beat Your Competitors Through RFID-based VMI Consignment Stock and Loan Kit Applications Trevor Peirce 30 th MARCH 2011, RFID in Europe Conference, PRAGUE Prepared for:

Belgian limited company first established in July 2007 Providing contract consulting Principle consultant Trevor Peirce, who started as an independent in July 2006 – EPCglobal Standards Director – RFID Standards Director DHL/Deutsche Post – Engineer, Leyland DAF – Naval Architect, British Shipbuilders Contracts: – Medical device manufacturer – Express Distribution Company – RFID System Provider – Systems Integrator – Standards Organization/European Projects – European Community – Digital Pen Solution Provider AVANTA Global SPRL Activities & History Draft version 2 Winner of International award for application integration of RFID/GPS/GSM/Sensor

International Collaboration EU China IoT Expert Group – European Representative CASAGRAS1 & CASAGRAS2 – ETSI IoT Expert – Standards & Security GRIFS EU Japan ICT Meeting Policy & Government EC Recommendation - Contracted by the EC to improve public notification Research IERC Activity Chain Leader – IoT security and privacy Standards Development ETSI TISPAN – WG7 Rapporteur European Standards Organization – EC Mandate M436 Expert Interoperability & Dissemination EU China RFID Plugtest EC Thematic Network - Board Member & WP Leader AVANTA Global SPRL IoT Activities and Experience 3 Draft version 0.2

Remotely held inventory at customer which the vendor manages. Vendor Managed Inventory (VMI) = Customer owns inventory managed by Vendor Consignment Stock = Vendor owns inventory until used Requires Vendor visibility upon: Consumption Replenishment/Inventory receipt Exceptional forecast demand Inventory status – Expiry date – Obsolesences – Condition – Central availability or position Vendor Managed Inventory (VMI) & Consignment Stock 4 Draft version 0.2 Advantage for the Customer: Reduction in administration Inventory levels optimized to match current demand Excess inventories avoided

Consumable and/or Reusable Inventory held and often configured by the vendor to meet the customers needs with non- consumed consumables and reusable inventory returned to the vendor Often involving: High cost or specialist reusable tools Specialist reusable tool configuration Consumables: High cost Short shelf life Supply restrictions Loan Kit Service 5 Draft version 0.2 Advantage for the Customer: Availability Efficiency Less space required Reduced costs of inventory Vendor Expertise

Slow notification or oversight Use Replenishment Lack of regular monitoring of condition of inventory Expiry – Natural and unidentified – Natural identified but not retrieved – Due to change in condition e.g. sterile packaging opened Position – not where it should be – In the vicinity but not in the correct position – Temporarily removed from inventory (several seconds – several days) – Lost/Stolen 6 VMI & Consignment Stock Application Challenges Draft version 0.2 RFID Application Requirements: High Speed Essential In Manufacturing At Customer 100% Reliability Multiple Tags Orientation insensitive Secure Integration with ERP

Vendor Process Delays and Handling Costs Identification – Outbound confirmation – Returns Replenishment of Kits Customer Delays Information about what has been consumed Return of items Mixed kits Part complete kits 7 Loan Kit Service Application Challenges Draft version 0.2 RFID Application Requirements: High Speed Essential At Vendor 100% Reliability Multiple Tags Orientation insensitive Secure Integration with ERP

Orthopaedic implants need to be picked for each operation with 100% accuracy. Over 1 million individual implants shipped per year to operations. 3% of shipped items are consumed, the remaining items are returned. Kit parts are returned muddled and require sorting into shipping units before they could be returned. Slow dock to stock process meant that inventory was waiting to be bar code scanned back into stock. This bottleneck caused an increase in the total inventory holding and created a need for overtime to keep up with the large number of returning implants. Orthopaedic emergency delivery requirements did not allow time for bar code scanning each implant. Loaner Kit Service Zimmer 8 Draft version 0.2

Bar Code Verses RFID Tag Zimmer’s Perspective Bar codes and RFID tags have different properties If the goal is to replace bar codes with RFID tags, we are limiting the potential of RFID tags while ignoring the benefits of bar coding CapabilityBar CodeRFID TAGRFID Benefit Line of sight requirement for reading RequiredNot RequiredNo need to orient all parts on a bench in the same direction in order to scan them Number of items that can be scanned at once OneMultiple 300/sec Can scan & take inventory of mixed contents of a carton in seconds Automation & Accuracy Manual reading required at multiple points Technology leads itself to production line style automation; while remaining highly accurate Error free counts at speed 9 Draft version 0.2

Contact Details Trevor Peirce AVANTA Global T E