IBM and Sun Put Radio Frequency ID to Test On Their Own Turfs

Vendors with RFID solutions are eagerly anticipating the day when they can publicly point to customer deployments. In the interim, IBM and Sun have released details of their internal RFID initiatives. The results from Sun’s trial and IBM’s full deployment highlight the role of employees in the ROI case.

In a Yankee Group report, Unlocking the ePC RFID Opportunity with Savvy Migration Management, we identify three stages of ePC RFID implementation:

1. Compliance with Wal-Mart and Department of Defense deadlines
2. Internal deployments, for example, to improve manufacturing and logistics
3. External, cooperative supply chain rollouts

Savvy RFID migration involves the timing of tag and infrastructure deployment, and integration with enterprise applications such as ERP. RFID migration also means a changing role for mobile workers. RFID tags and networked readers will ultimately replace bar codes and (human) handheld readers. As the Sun case study illustrates, people will often partner with the automatic RFID system to identify and transport goods as the enterprise migrates towards RFID.

Ultimately, as the mature IBM initiative reveals, the job-function center of gravity will move towards value-added processes such as running plant process equipment.

Case Study Summaries
Sun internally tested RFID in its server assembly process. The company placed RFID tags on metal chassis (four parts) that were previously identified by employees with bar code scanners. Sun’s triumph was to discover and overcome the physical challenges of incorporating the technology into operations. Sun claims 99.5 percent accuracy after applying “not science, but art” to the challenge of reading the tags from the metal chassis.

Sun did not eliminate bar code scanning and human routing altogether. With RFID in place, production operators roll the dollies to a gate (formally a bar code station). As the employees roll the dollies through the gate, they see all the items with pictures displayed on a screen. The employees then must route the parts. Sun did not go so far as to determine directionality (although technically they could have).

IBM has fully incorporated RFID as part of a $2.5 billion revitalization of its microelectronics plant in Fishkill, N.Y. RFID is an essential component of the automated plant, enabling the tracking and routing of wafers through each fabrication station. Each wafer carrier has a passive RFID tag. RFID readers (located on automated assembly lines and into production tools) communicate the wafer location and status to production tool applications and supporting databases.

Critical Success Factors

• Realize the physical limitations. As Sun discovered in its test centers with clients and in its internal trial, the process is limited by the physics. For companies that manufacture, ship, or receive metal and liquid goods, they must incorporate methods (like product positioning) that allow clean tag reads.
• Identify inefficiencies. Imagine if companies had an infinite number of low-wage employees who never made mistakes. How would existing operations improve? What new applications and procedures should be employed to take advantage of such a workforce? Sun and IBM applied RFID in operations where workers created friction. IBM redesigned the entire operation, anticipating the efficiency of the relatively error-less operations.
• Don’t view RFID in isolation. In the IBM initiative, when a station completes working on its lots, software determines the best lot to work on next. The conveyers then automatically deliver the new wafers. RFID is an essential component of this efficient solution, providing the software with real-time feeds on location and status of the goods.

• Employee productivity (or labor savings). IBM employees in the older plant spend much of their time routing wafer carriers rather than running the processing equipment (their primary job).
• Fewer plant interruptions. In the older plants, IBM employees might mislabel carrier, resulting in lots being sent through the wrong process. Parts at Sun’s plant might be missing, causing “line downs."
• Real-Time Visibility for improved operations and customer service. Whether in manufacturing, field service, or supply chain operations, businesses can provide their customers with a more accurate window into operations. The real-time (or “on-demand”) capabilities also improve IBM’s ability to manage product specifications, and prioritize jobs.

• Present RFID as a component of a solution (not as the complete solution). At IBM, manufacturing execution software (IBM SiView Standard) took the lead. RFID simply enabled the software to do more.
• Have an employee migration strategy. Identify at least one employment stage between the current status and complete RFID migration. Employees will need training as they work with new devices and migrate to more value-added roles. Most important, they will need assurance that their positions are secure...
• Have a device migration strategy. RFID read points often are more appropriately placed on forklifts or in handhelds rather than in fixed read points even after a full deployment. For example, fixed read points will place burdens on operations where forklifts are used to replenish manufacturing lines heavy items. Even in environments where the ultimate solution is likely to rely on multiple fixed read points, it is usually economical to use handheld RFID readers in the transition stage.
• Find the little ROIs. IBM’s ambitions project highlights the role RFID can play in a total plant upgrade. However, the Sun trial shows how limited deployments in the right areas can bring quick returns.