MSFT Canada Partner Advisory Council AX

RFID and ERPMicrosoft Dynamics Roadmap Lessons Learned: 

RFID and ERP Microsoft Dynamics Roadmap Lessons Learned Alexander Renz RFID Program Manager Microsoft Corporation Hitesh Dani Technology Specialist Microsoft Canada

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Reorganized from Seven Business Units to Three Delivering Integrated Innovation 57,000 Employees 27,000 designers and developers $40 Billion Revenue $275B Market Cap $7.6B in R&D History of Software Innovation MBS investments $2.5B acquisition 20 years business applications experience Established 8,000 partner ecosystem 352,000 customers in 132 countries

Microsoft Dynamics Roadmap: 

Microsoft Dynamics Roadmap 2005 - 2007 2008+ Wave 2 Common: Wave 1 Common: Modular Process Configuration Enhanced Visual Studio.NET tools Enhanced User Experience “Best of” Process Library Role based user experience Portals and Collaboration SQL based contextual business intelligence Web service based composition & integration Converged Suite &

Delivering Value Through Innovation: 

Web Service-based Composition & Integration Role-Based User Experience Portal and Collaboration Contextual Business Intelligence Delivering Value Through Innovation

Sensor Network (R)evolution: 

Time Strategic Value RFID Ready RFID Compliant RFID Enabled RFID Centric Sensor Network (R)evolution

Adoption Strategies: 

Return on Investment Business Process Integration High Low High Low Slap & Ship Do nothing Outsource to 3rd Party Full roll-out Select Roll-out Pilots ? ? ? ? Adoption Strategies RFID-centric business models

MS / Dyn. RFID Product Strategy: 

MS / Dyn. RFID Product Strategy Hardware Partners ISVs (RFID MW, ERP, WMS etc) SIs and custom- development Microsoft Dynamics MS Infrastructure Play AX NAV GP

High Level Architecture: 

High Level Architecture Distributed RFID site servers running RFID Infrastructure RFID Middleware & Edge Apps Add context and turn raw events into business process relevant information Interpret events at the edge through filters, rules & alerts Discover, configure and manage devices Hardware Abstraction Layer Device Layer RFID fixed and mobile readers, Printers Bar Code Scanners PLCs, etc Physical Layer RFID Tags, Bar Codes Biometrical Systems Environmental Sensors etc Business Applications Owns master data and drives business process Apply business logic to data Visibility and Analytics Push down rules and alerts Business Applications, i.e. Dynamics NAV

Overview: 

Overview Custom Provider EPC (Standards) Provider Device abstraction and management Event Processing RFID Reader RFID Printer async notifications Filters Aggregation Transforms Correlations Alerts synch commands Read Tags Write Tags Print Manage Developers Microsoft RFID Infrastructure Devices Commands Code ….

Microsoft Dynamics AX 4.0 RFID: 

Microsoft Dynamics AX 4.0 RFID Device Service Provider Interface RFID Object Model / APIs Data Management Data Store Device Management Tagging Rules EPC Number Management RFID Label Printing Connector Business Intelligence Track & Trace Inventory Management Alerts RFID Infrastructure Edge Server Dynamics AX Backend System RFID Business Logic Core RFID Functionality

Dynamics Ax 4.0 RFID : 

Dynamics Ax 4.0 RFID Functionality Define by customer, stock keeping unit, sales order line if tagging (and at what level) is required Support for pallet, case and item level tagging Limited to 2 dimensions Electronic Product Code Number Assignment and Management as part of ERP EPC Compliant Broad Collaboration Support (PO, Invoice, ASN)

Dynamics Ax 4.0 RFID : 

Dynamics Ax 4.0 RFID Core Process Scope – RFID Business Logic Order Management RFID Compliance (incl. EPC Number generation, tag encoding and label printing) Pick, Pack (& ship) Inbound processing (receiving against open PO) Related Axapta Capabilities Inventory Management Alerts Track and Trace Analytics (SC KPIs rather than RFID centric analytics)

Partners Are Key to Our Success: 

Partners Are Key to Our Success Edge App Partners Warehouse Automation Manufacturing WIP Tracking RFID Analytics … Tagging Rules EPC Number Management RFID Label Printing Connector Business Intelligence Track & Trace Inventory Management Alerts Dynamics AX Backend System RFID Business Logic Application ISVs

KiMs’ Supply Chain: 

KiMs’ Supply Chain Material Flow KiMS (Production, RM and FG WH) Supplier Base (200) Distributor & VMI operator KiMs Depots (FG WH for Merchandisers) (10 Depots) Small Retailers/ Gas Stations 3PL (FG WH for KiMs brand) Potatoes, Spices, Oil, Labels, Packaging Material Packaged Snack Packaged Snack Packaged Snack Packaged Snack Packaged Snack Packaged Snack Retail

Current Bar-code solution: 

Current Bar-code solution Dedicated KiMs bays Picking area Scan Point 1 Scan Point 2 Scan Point 3 Ensuring compliance with retailer’s requirements for minimum remaining shelf life is a manual process 3PL has no visibility into KiMs staging area, leading to inability to optimize transportation Inconsistent scanning leads to inacurrate Inventory Information leading to suboptimal order fill rates and high safety stocks Lack of in-transit inventory visibility and inability to comply with new European Food Regulations

RFID – “Proof-of-Concept”: 

RFID – “Proof-of-Concept” Dedicated KiMs bays Picking area

Axapta RFID: 

Axapta RFID “At KiMs, Microsoft Axapta’s outstanding flexibility and RFID has proven to be a powerful combination. The project has shown that RFID based on Microsoft technology can be a viable option for companies of all sizes. ” Jesper Touboel Chief Information Officer KiMs

Link Snack’s Supply Chain: 

Link Snack’s Supply Chain Material Flow Supplier Base (Raw Meat, Spices, Packaging Material) 1 Central Distribution Center Others Distributors (EU, Japan etc) Department of Defense (DoD) Target Wal*Mart Privately Owned, Mid-market Company World Leader in Meat-Based Snack Foods HQ in Minong, WI 4 Domestic Manufacturing Facilities 2 International Manufacturing Facilities

Link Snack’s Supply Chain: 

Link Snack’s Supply Chain Material Flow Supplier Base (Raw Meat, Spices, Packaging Material) 1 Central Distribution Center Others Distributors (EU, Japan etc) Department of Defense (DoD) Target Wal*Mart Privately Owned, Mid-market Company World Leader in Meat-Based Snack Foods HQ in Minong, WI 4 Domestic Manufacturing Facilities 2 International Manufacturing Facilities

Business Pain Points : 

Business Pain Points Material Flow Others Department of Defense (DoD) Target Wal*Mart Letter from Wal*Mart regarding RFID mandate: How do we best respond? Is RFID as cost of doing business or can it help drive internal process improvements? USDA Compliance Lot tracking and QC is a manual, paper-based process Mock recalls are lenghty and tedious Lack of Operational Visibility & Control Inaccurate information basis for costing Inability to pinpoint yield losses Potential for cycle time reduction High Inventory Levels to maintain high customer service levels despite... Suboptimal Inventory Accuracy resulting from manual data capture – no internal use of bar codes Long cycle times resulting from lack of supply chain visibility

4 Project Phases to Address Pain Points : 

4 Project Phases to Address Pain Points Material Flow Others Department of Defense (DoD) Target Wal*Mart Phase 1: Wal*Mart Compliance Phase 3: Lot Tracking and Regulatory Compliance Phase 2: Manufacturing Visibility and Control Phase 4: Distribution & Logistics

Phase 1: Wal*Mart Compliance: 

Phase 1: Wal*Mart Compliance SATO RFID Label Printer Encoder SAMSys antennas and reader Pallet Building at end of Packaging Line

Phase 1: Wal*Mart Compliance: 

Phase 1: Wal*Mart Compliance Shrinkwrapper with mounted SAMSys UHF Antennas and Reader Once tagged pallets are complete, there are moved to the shrinkwrapper Printing of pallet label

Phases 2&3: Manufacturing Visibility and Lot Tracking: 

Phases 2&3: Manufacturing Visibility and Lot Tracking 1. At goods receipt, record raw material lot information using handheld device in Navision Manufacturing 2. As Raw Material is deconsolidated into totes, associate unique Tag ID of tote with lot information 5. As Totes go through washing cycle, purge tag association in database – tote is ready for reuse 3. Automatically record lot information as raw material and WIP is consumed at different process steps - Scales - Temperature Sensors 4. Automatically track location of tote across manufacturing facility

Phases 2&3: Manufacturing Visibility and Lot Tracking: 

Phases 2&3: Manufacturing Visibility and Lot Tracking 1. At goods receipt, record raw material lot information using handheld device in Navision Manufacturing 2. As Raw Material is deconsolidated into totes, associate unique Tag ID of tote with lot information 5. As Totes go through washing cycle, purge tag association in database – tote is ready for reuse 3. Automatically record lot information as raw material and WIP is consumed at different process steps - Scales - Temperature Sensors 4. Automatically track location of tote across manufacturing facility Lot Tracking Becomes a Highly Automated Process Streamline USDA regulatory compliance Lot information is kept in core ERP Increased Visibility and Control opens up Opportunities Increase Yield More accurate basis for costing Synchronization of cross-company manufacturing

Phase 4: Advanced Distribution & Logistics: 

Phase 4: Advanced Distribution & Logistics At Packaging Line apply EPC labels to cases - record FG production, packaging material cons. - associate lot information with cases 2. Consolidate cases to pallets - associate pallet with cases 4. Automated Receiving as truck arrives at Central Distribution Center. Inventory is up-dated in Navision 5. Product is automatically received at customer DC and contents checked against ASN & PO 5. As Product is shipped to customer, an Advance Ship Notification is automatically triggered. Operator is alerted if wrong pallet or dock door. 3. Automated shipping verification & Inventory Managememt

Phase 4: Advanced Distribution & Logistics: 

Phase 4: Advanced Distribution & Logistics Leverage increased inventory visibility and accuracy for improved Demand and Supply Planning Maintain high service levels whilst reducing inventory levels Shrink cycle times ”I am part of batch #4711 and I contain the following raw material lots ...” ”This is how I got here...” ”Peace of Mind” – Ability to perform targetted product recalls

There is Potential Value in RFID: 

There is Potential Value in RFID Material Flow Others Department of Defense (DoD) Target Wal*Mart Phase 1: Wal*Mart Compliance Phase 3: Lot Tracking and Regulatory Compliance Phase 2: Manufacturing Visibility and Control Phase 4: Distribution & Logistics Projected ROI for the 4 Phases: LESS THAN 12 MONTHS!

Our RFID Value Prop: 

Our RFID Value Prop We can help customers comply quickly and at low cost, whilst laying a future proof foundation that scales with deployments and allows for RFID data to be seamlessly integrated into a larger number of business processes as RFID scales to drive internal business benefits! - One stop shopping from Device to Business Process Integration - Existing and future investments protected - Easy extensibility through partners to address the large variety of RFID applications “With Microsoft Dynamics NAV and its RFID solution, we have been able to achieve trading partner compliance quickly and at low cost. At the same time, we have a powerful tool at hand to expand the use of RFID across a larger number of business processes as we drive internal ROI from the technology” Karl Paepke VP of Supply Chain Link Snacks

RFID will shift . . .: 

Process Biz Apps (Exsiting & New) IT Architecture & Middleware Hardware RFID will shift . . . Process Biz Apps (Existing and New) IT Architecture & Middleware Hardware Today 2 to 3 years

From Compliance to Competitive Edge: 

Decision Optimization Capability Transactional Execution Capability Order Management Inventory Management Manufacturing Warehousing & Distribution Transportation Management Business Intelligence Supply Chain Planning Process and Service Capability Scan Based Trading Business Strategy From Compliance to Competitive Edge Direct Store Delivery Promotion Management New Product Introduction Supply Chain Visibility Collaborative Planning

Questionsand Answers?: 

Questions and Answers? Suggestions? Feedback? Action??? Alexrenz@microsoft.com +45-29229911