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Jun 07, 2016

RFID Triumph at Macy’s: More Sales with Higher Margins – GS1 Connect 2016 Recap

中文版 Chinese version

It was my third time to attend the GS1 Connect event; this time in Washington, DC from May 31st through June 3rd. The event was loaded with an impressive conference menu and a larger exhibition area than in the Austin event last year, although with less exhibiting companies than previously. RFID was well presented – read on to see what I am taking home from that perspective.

Utopia Comes with Transparency and Traceability that Protects Both Business and Consumers

Standardsville is a picturesque city where everything is clean, convenient, traceable and safe. Business blooms because information and goods flow without obstacles, and The Consumer is protected from harm. Actually I thought GS1 had done a really nice job on creating this Standardsville utopia as the theme of the event.

Standardsville comes with plenty of convenience and color. Picture Copyright GS1 2016.

In his keynote speech Mr. Bob Carpenter, the President and CEO of GS1 US, highlighted RFID as one of the transformational technologies that is currently reshaping retail. In a conference session the same message came through the presentation of Dr. Bill Hardgrave of Auburn University. Dr. Hardgrave listed the “Big Four” Foundational Use Cases of RFID together with the additional current driver: the omni-channel retail.

Retail use cases of RFID according to Dr. Bill Hardgrave, University of Auburn

For the most effective RFID execution Dr. Hardgrave again gave the ultimate guidance: “Move to 0HIO“.

RFID Is a Strategic Enabler for Macy’s

In the Macy’s HTDBW session Mr. Bill Connell, Senior VP of Logistics at Macy’s, explained the reasons why Macy’s is so committed to RFID – sales uplift is naturally the ultimate reward, but all the other benefits of accurate inventory also add enormous efficiencies to store operations. The consumer sees all this as improved shopping experience, whether she is online or in-store.

Supplier Source Tagging Is Happening Already

Mr. Connell also made it clear that supplier source tagging is the only way to do this right so that benefits are spread thorough the supply chain. Today tagging coverage among Macy’s suppliers is 56%, and Mr. Connell expressed his wish that the rest would start tagging tomorrow.

In a separate session Rich Haig, the CIO of Herman Kay, one of Macy’s suppliers, presented their experiences around RFID. The added visibility that RFID has brought to their own processes has dramatically affected shipping routines and raised accuracy to a whole new level. All this has made Herman Kay a better supplier for all their customers.

Many Retailers Put Emphasis on Product Attributes and Rich Content

As omni-channel retail marches forward, it seems that most retailers have their focus on getting the content right on their webstores. As an example, Walmart is focused on getting every single item online, including those that they are not currently even selling! As an engineer I am struggling to follow this logic, but I suppose that’s just me.

I understand rich content and romancing the product is essential to fight the online competition. However, behind the curtains many are following what the spearhead retailers are doing around RFID. For the latecomers implementing RFID is going to be a smoother ride because supplier source tagging is already happening, standards are emerging to make communication easier between stakeholders, and successful tagging solutions have become a common knowledge in many product categories.

TIPP Is Like the Air We Breathe

So, why are the retailers not implementing the Tagged Item Performance Protocol (TIPP) that was just recently developed for them? I’ve learned this actually is just an illusion. The way professional RFID tagging in retail is done today is solely based in TIPP-like methodology – some just call them ARC tests and others Voyantic tests. Common factors include tags applied on products/materials, organized to in-store like product stacks and then tested over a wide frequency band and across rotation angles.

TIPP grades will take their place as a communications method as tagging spreads to new product categories and new retailers. This is already happening, and I am sure the TIPP methodology will be discussed more at the GS1 Connect 2017.

GS1 Connect 2017 Taking Place in Las Vegas

As business moves forward the next GS1 Connect will be held in Las Vegas. Unfortunately the event is moved forward by a couple of weeks to 19th-22nd June, which will be right on top of the Finnish Midsummer’s Eve – the magical nightless night. Considering the night in Las Vegas may well be somewhat similar, I will be faced with a difficult decision between bonfires and casinos.

Apr 21, 2016

RFID, Love or Die

Dear reader, my name is Lluis Bueno, and I love RFID. Do you? I belong to the Spanish company NextPoints, and in my work I have met hundreds of professionals and companies working in the RFID market without any passion for the technology… and most of them are not working in the RFID market anymore. So, why is love required for RFID business to survive? Let me share a few real stories with you.

Without any doubt, RFID is living its best moment: Internet of Things is more real than ever, RAIN RFID Alliance has more than 100 members, GS1 released TIPP guidelines for RFID tagging in retail, RFID inlays reached the lowest price ever without losing any quality… but perhaps, even with this friendly environment, the RFID company you created or joined some time ago is not alive anymore.

What was the reason for failure then? All of them had something in common: their lack of love towards the technology. Focusing on the product is of course important, but prioritizing price and forgetting collaboration with other players did kill them.

RFID is not just one more technology, it still needs your support to develop the market, and you need the market to be developed to make business.

RFID has its professional tools and methods of doing measurements, and this is something many of the professionals in the market are not aware of. There are only two ways to work with RFID: the right way or the wrong one, and there is no midway. Fortunately, I met Voyantic years ago and they showed the right way to me. Doesn’t it sound like some kind of religion? That was exactly what I felt the first time I met Mr. Juho Partanen: I had always thought I was doing things, if not the best way, then good enough for my RFID business. But I was doing wrong until he opened my eyes and he led me on the right track.

Most of the RFID companies ─ large end users, system integrators and even manufacturers of RFID readers or tags ─ are still using the same methods for testing their products and solutions which they used 5 years ago: conventional readers instead of professional testing systems, trial and error instead of real measurements, empirical reading distance instead of other key measured parameters. They think they are getting enough information from those old methods to understand how RFID works, but they really have no idea of what is happening. Why are they not taking their own business seriously? Is lack of budget the reason? No. Lack of love towards RFID is.

Most of the RFID companies think that purchasing RFID products at the best price will turn their company into a successful one. Forget it! Price just helps. Qualified partners, not only products but business providers, RFID alliances involvement, real RFID measurement tools…. You are missing much more aspects than just price. Are you aware of the changes in RFID ETSI frequencies, TIPP guidelines, RAIN RFID Alliance…? Information, commitment, involvement… definitely, love. Love is missing all along the supply chain, so we need to spread love since the beginning.

Please, you have chosen RFID as a driver technology for your projects, products and solutions. Love it and it will love you back with everlasting business. Take it seriously, or partner with companies who take it seriously for you, but do not ignore RFID and treat it as any other technology or it will die and make your business pass away.

In my work I have heard dozens of questions of RFID – why is it not performing as expected? What should be done differently to make my RFID business bloom? Download the “Questions of RFID – Loving Wisdom” document below to read the commonly asked questions with my answers.

Download Lluis Bueno’s RFID Q&A!

Download Lluis Bueno’s loving wisdom for frequently asked questions of RFID. You’ll find answers to many baffling RFID questions regarding tag and reader selection, system setups, link margins, and troubleshooting.
For your convenience, many of the answers come with pictures, too!

Sep 25, 2015

How to Optimize the Cost of Quality for UHF Tags?

When talking about high-end RFID performance testing solutions, I sometimes face the situation, where my customer is struggling to find room for the investment in their budget. After some return on investment (ROI) calculation, the case typically looks much brighter.

If we look at the overall quality cost structure in UHF tag manufacturing, I will dare to claim that, in many cases, even a single batch of poor quality can justify the ROI for decent RFID test equipment. The challenge here is though that the costs of being able to provide excellent and consistent quality are directly addressed to the production. In contrast, the charges induced from poor quality are inconspicuously scattered all around the corporate structure.

Where do I base the claim? Let me show you!

First of all, to lower the cost of poor quality, you need to invest in preventing failures and maintaining excellent quality. The great thing here is, though, that you get much more than your money back. If done right, each penny you invest is multiplied as savings in failure costs. This is how you balance the scale and minimize your total costs.

Let’s Do Some Math!

When a quality issue is found in the production, how much does it cost for an engineering team to troubleshoot, or a machine to stand by waiting for the next production batch to be started? I’m sure you know the figures better than I do, but what I do know is these problems take some hours to be solved, sometimes even days. I also know that the one-hour machine downtime in chip attachment makes at least 10 000 tags less manufactured. For a label converting process, it may be ten times more.

What if the problem was not detected when manufacturing the tags, but in an inspection process that was done on the batch afterward? How big is your typical batch? 100 000 tags? 5 000 000 inlays? In the worst case, you need to multiply that with the number of batches produced and with material costs per tag, and add on top of the engineering work and machine downtime.

Ok, now you just need to rework the whole batch, which means again capacity loss, as the machine time is used to reproduce what already was supposed to be delivered. The ball keeps rolling, and you’ll end up with shortages in your next deliveries, delays that cause inconvenience to the customers, and a headache to the management, sales, and customer support. So, just add up the machine time for rework, management, and support time, as well as customer dissatisfaction with the earlier equation.

Now, we are starting to talk about costs that are far more difficult to quantify. Customer satisfaction…

What if the defected batch didn’t remain as an internal issue? What if it reached the customer, who is struggling now with problems in his application? Now we’re starting to talk about external failure costs, which are not only harder to be measured, but also induce secondary effects and costs, like bad quality reputation. I know, impossible to be quantified. But if you just add the management cost due to the complaints and troubleshooting with the customer involved, and forget the fact that the customer may end up ordering his next tags from another supplier, we still have a significant pile of costs due to poor quality. Now would you believe me when I’m saying:

You Need to Balance the Scale to Minimize the Overall Cost of Quality

Unlike the above figure may suggest, the equilibrium point here would not necessarily be where the cost of poor quality equals the cost of good quality. The equilibrium point is reached when the efficient investments in the price of excellent and consistent don’t return more than their value in the costs of poor quality.

The graph below would represent an example situation, where the costs of good quality are linearly increased, resulting in considerable reductions in the price of poor quality at first. Eventually, the point is reached, where further improving the quality appraisal and failure prevention costs will not lower the failure costs as much.

If you calculate with your figures the overall cost for providing just a single batch of UHF tags with inferior quality to the customer, would you agree with me that these costs are just too high to accept frequently, or at all? This approach is only the tip of an iceberg. What eventually will happen, if the quality continuously keeps failing to meet the customer expectations, is you start losing business, surreptitiously, but deterministically.

Quality Reputation – Hard to Estimate, Easy to Forget

The quality reputation is easier to ruin than to be built. Building it from scratch takes time and effort. Trying to gain customer trust without hard evidence based on measured facts is challenging. Still, if you’re able to quantify the quality, as well as prove the quality is consistent, you’re in a wholly different position to win the customer.

We have various examples of customers who have taken the UHF tag quality seriously, all the way from design to production. There are customers like Michelin, who have decades of experience in manufacturing and quality control. They have the same approach in case of any new technologies. Why ruin the quality reputation you have successfully built for years? With Michelin, we worked on something a bit customized to be able to test tire tags that are very heavily over-tuned. Check out this interesting case study:

Michelin — Tire Tags with Consistent Quality

Customer Case Studies

What kind of figures did you come up with on your overall cost of quality? Would you like to talk more about balancing your scale as well? Please contact us, and let’s figure out how we could lower your quality costs and increase your profitability! For the first 20 people to contact me, I promise to make free of charge tag measurements.

Solutions for RFID productions

Jun 12, 2015

Helping The Boss to Arrive at the Correct Decisions; In-house Selling of RAIN RFID Test Equipment

中文版 Chinese version

Selling is a noble form of art, which takes slightly different forms when selling to a customer (out-house) or a colleague (in-house). Luckily both the directions go by the same principles. The twist in general is whether that special someone is already looking for a solution and is therefore on the buying mode, or not looking and even in the I-have-other-priorities-such-as-protecting-the-cash mode.

As my company Voyantic operates in the relatively young technological field of RAIN RFID measurement and testing solutions, the latter mode is usually assumed, since the prospect companies are typically start-ups. Of course, we are not working on the sales case only from outside the prospect company, but together with an in-house sponsor that faces the same communications challenge: How to get the management to say yes to the investment proposal?

The Boss Takes the Most Heat in the Valley of Death

Our prospect start-ups are in the pre-launch phase, and cash flow vice is located firmly in the valley of death. I’ve been in that valley myself – it’s a horrid place, and only the brave go there.

Sales is all about getting to Yes. Let’s, therefore, focus on The Boss, because ultimately she/he says “Yes” or “No” to the investment proposal.

The Boss is a creature with three primary functions: stay as a boss, carry the grave responsibility, and make decisions when needed. One way to initiate a decision-making process is to spread a certain amount of fear powder over the responsibilities part. Some others prefer to play this card right the opposite direction: paint a fresco of stunning business performance and thus suggest the marvel of getting out of that valley sooner than later, and this way become a happier boss.

One Boss in the Valley of Death, under wildlife attack, not enjoying the moment very much, and thus motivated to make decisions

Facing RFID Sensor Tag Development Hurdles

To make a case of the latter, let me walk you through a hypothetical example of in-house sales: Assume you are an RF antenna engineer in Company Z that is developing a novel RAIN RFID tag with disruptive never-before-seen sensor features.

Cutting edge stuff, and riding high on the hype curves, too! So it gradually reveals to you that the antenna design is heavily restricted by the selected production process, which further seems to limit the tags reading performance. Unfortunately, you don’t quite have all the facts on the table to back decision making, because there is only a DIY RFID reader based test setup in the basement lab, right next to the janitor’s room. Additional discomfort arises from the fact that the latest tag sensor circuitry samples seem to have a set of “undocumented” properties that don’t go so well either with the reader in the lab.

The sensor tag launch date is set only ten months away to a RAIN RFID show taking place in Orlando (sometimes in San Diego), and the marketing lady with the scarf is making preparations already. Even the product brand name is already registered.

It Doesn’t Hurt to Find Out How Others Have Managed to Get the Antenna Design Right

Let’s face it – those are hugely expensive ten months for several reasons.

First of Company Z has only the slideware to sell, which means there is practically no revenue.

Secondly, there are you and both your buddies in the lab ordering materials, scissoring inlays, 3D printing prototype enclosures, cursing the air conditioning, and wishing all is going to be ok.

Thirdly, some other companies in the market are already launching their first sensor tag products, which is irritating because you know they are bluntly eating off the yours-to-be market share.

So, being a bright and open-minded engineer, you take a few hours on Tuesday to browse through a pile of academic publications on UHF RFID tag design. While your coffee mug gradually sinks below the refill level, you suddenly realize all those papers refer to this one RFID performance test system.

Switching over to Dr. Pepper and taking a few additional hours to complete the desk study, you find out that this stunning equipment shows how a UHF tag is tuned in about 30 seconds and also how the IC responds to different commands. On top of that, it dawns on you the system is available with two weeks lead time, and the supplier even has a tag production quality test solution, too! Tuesday well spent!

How to Present the Gathered Information with Maximal Impact

So what is it that you do? Well, first, you go home and sleep off the first wave of excitement. On Wednesday morning, you make a few calculations together with a fresh blueberry muffin, then rush to the corner office at 9:15 AM, take a deep breath, and…?

At this point it is important to remind yourself that The Boss is in heat and busy looking for a way out of the valley of death.* You are almost there, next reel it in with a correctly tuned message*:

  • JUNIOR MISTAKE: just ask The Boss to buy this one great tester worth 50k
  • MILD, BUT MIGHT WORK: explain how you found a way to raise RnD efficiency by up to 22%
  • MUCH BETTER: tell you found a way to get the tag design finished in time, AND troubleshoot the damned sensor circuitry while at it
  • A NO-BRAINER DEAL: report to The Boss that you found a way to cut time-to-market by 50%.

The lower on this list you are able to go, the smoother response there will be on your closing line about the investment.

In a Competitive Environment Time-to-Market Makes a Grand Difference

Essentially you should show that you can make this massive difference on the top line if this enabling 50k investment is carried out now, and sales would start sooner than later. Bring in a few of those academic publications with you as evidence, and ask the measurement system vendor for payback estimates and additional collateral, such as a few reliable customer references.

The Boss knows the painful cost and agony of those ten months, and if you claim you can save 5 out of those, he figures out it’s going to be three months saving with a reference customer as a cherry on top, and he is going to sign you those 50k pretty darned fast. All top bosses know that you need to spend money to make money, and just kindly remind that waiting is the most expensive alternative of all.

Wrapping It Up: Investment on Test Equipment Often Turns Out to Be an Investment on Sales

The payback on measurement and testing equipment investments are exceptionally fast when the impact hits the frontlines of the sales battlefield. “The cutting costs” story may work reasonably well in large companies. Still, when it comes to shortening time to market, fixing diverse quality issues, and creating positive aura on the customer front, it all quickly translates into getting additional revenue for the company, sooner than later.

All top bosses love the additional revenue. Cards well played, and you just got your first Voyantic Tagformance.

That’s my story for you today. These principles have worked out well for me many times, and I would love to hear about it if they work out for you as well. Please drop me a line at juho.partanen@voyantic.com, and let’s talk more.