Intel manufacturing pilot showsRFID systems offer substantial business value.

Intel manufacturing pilot shows RFID systems offer substantial business value

To learn more about the benefits of radio frequency identification (RFID) systems
in a complex semiconductor manufacturing environment, the Intel Technology and
Manufacturing Group deployed a high-volume track-andtrace RFID pilot at a Malaysian
assembly and test facility. The pilot yielded many valuable findings, showing
that RFID systems can be extremely reliable, deliver accurate data in real time
that can help improve internal business processes, and provide productivity
benefits to customers.

The Challenge

  • Evaluate the operational and business benefits of an advanced RFID system
    in a large-scale, real-world manufacturing environment
  • Follow the flow of product across multiple environments from the Intel manufacturing
    facility to a customer’s factory floor

The Solution

  • Intel deployed an advanced RFID pilot in its Malaysian assembly and test
  • To fully evaluate the benefits of RFID, a major customer participated
  • The pilot provided an increased understanding of RFID systems in real-world
    manufacturing conditions and the benefits they can provide

Assessing the Situation

Manufacturing and retail companies, government agencies, and other organizations
that track and trace vast quantities of items have found the benefits of RFID
systems too compelling to dismiss. Providing greater flexibility and more accurate
tracking than traditional systems, RFID systems reduce manual tracking and the
number of lost and misplaced items. Another key benefit is increased visibility
into inventoried items, which can help lower inventory levels and reduce costs.
Finally, RFID systems supply real-time data about items in the supply chain,
which can further reduce the size and cost of inventories as well as help ensure
that items are available when customers need them.

Intel supports RFID on many fronts

Intel has made a major commitment to exploring the potential of RFID to transform
the way organizations can conduct business. Currently, the company has RFID-oriented
efforts underway on a range of fronts. For example, Intel is studying how its
products can be used to build better RFID systems. Intel’s professional services
organization, Intel® Solution Services, has been highly successfully in designing
and deploying advanced RFID systems for worldwide companies and is widely acknowledged
as an expert in this field. In addition, Intel – as the world’s largest semiconductor
manufacturer – is investigating how RFID can streamline the company’s own supply-chain


Intel acquires first-hand RFID knowledge from real-world pilot

As part of its exploration, Intel conducted an internal RFID pilot, tracking
the movement of 80,000 microprocessors in one month at its manufacturing facility
in Penang, Malaysia. Leading the effort was the Intel Technology and Manufacturing
Group, which introduces new systems into the company’s manufacturing facilities.
The Intel team selected Tyco/ADT*, a company with more than 20 years of experience
with radio frequency applications and related services, to supply RFID hardware
and assist in the pilot test.

“We had many reasons for conducting this pilot,” says Rick Tyo, Research Integration
Engineer, Intel Technology and Manufacturing Group. “We wanted to see how we
could streamline our operations. We also wanted to apply the lessons learned
in Malaysia to our other RFID-related initiatives.”

The Penang facility was chosen because it is a complex, real-world environment
– one of the world’s largest semiconductor manufacturing operations. In addition,
the team wanted to include an Intel customer because the benefits of RFID can
extend across the supply chain from one company’s manufacturing operation into
the heart of its customer’s operation. To help achieve this objective, a major
original equipment manufacturer (OEM) with PC notebook manufacturing facilities
in Malaysia agreed to participate. “This broad view was essential to learning
the most about the benefits of RFID,” notes Tyo. “The pilot tracked the product
(microprocessors) at various points in the process, beginning with assembly
and testing in the Intel factory, moving to the Intel warehouse, and continuing
all the way to the customer’s factory floor. In all, eight different RFID readers
were used.”

Spotlight: Intel Corporation
  • Intel® processors, chips, boards, systems, and software support the
    most advanced servers, networking, and communications products.
  • Manufacturing is a well-known strength of Intel; its economies of
    scale, factory agility, and execution excellence worldwide have contributed
    to the company’s success.
  • The Intel Technology and Manufacturing Group explores ways the company
    can use new technologies such as RFID systems to improve manufacturing
    quality and visibility within the supply chain.

Delivering the Solution

The pilot team conducted the test with Intel employees and a customer in Malaysia,
collecting data over a four-week period. When reviewing the results, they saw
clear evidence of the benefits of RFID technology.

Key Technologies Integral Answers
  • Tyco Sensormatic* Agile 2 readers, based on Intel® processors, are
    easily customized through firmware upgrades.
  • Tyco Sensormatic RFID OmniWave* antennas have installation flexibility
    for optimal antenna placement and a rugged design for harsh industrial
  • Intel® IXP420 network processors based on Intel XScale® microarchitecture
    combine low power consumption and high performance for wireless applications.
  • Systems based on Intel® Itanium® 2 processors manage and process the
    RFID data.
  • The impact of RFID on manufacturing information systems can be extensive.
  • To stay competitive, manufacturers should explore RFID now and develop
    an RFID strategy.
  • For the best results, work with an experienced, well-resourced RFID
    expert. It will shorten the learning curve, help solve problems faster
    and ultimately reduce costs.

Accurate, real-time tracking

Significant benefits emerged from the accurate, real-time item tracking data
that RFID systems deliver. During the pilot, planners always knew the location
and state of each item both within the Intel facilities and at the customer’s
facility, greatly reducing the chance that items could be misplaced, lost, or
stolen. The planners confirmed product shipments and receipt in real time, and
they responded to customer questions or change requests more quickly and efficiently.
These benefits resulted both in productivity gains and a more satisfied customer.
The RFID data also gave planners greater visibility into Intel inventories,
allowing them to manage supply more costeffectively. In addition, the RFID system
provided a much more comprehensive view of the overall supply chain process
in Malaysia, enabling planners to establish better processes and exception handling
rules to get more products through the supply chain faster, enabling still greater
productivity and cost savings.

RFID delivers fast, highly accurate tag reading process

The pilot confirmed the speed and reliability of the tag reading process. The
average time it took each box of microprocessors to pass through each RFID reader
check was just two seconds, much lower than the time required for a typical
barcode reading. RFID readings could also be achieved at various ranges and
throughout all process steps.

“The potential for automation with RFID is exciting for us,” says Craig Dighero,
RFID Supply Chain Program Manager, Intel Technology and Manufacturing Group.
“It shows that RFID systems can speed up the movement of items throughout the
supply chain.”

RFID can help improve service to customers

The pilot also showed that RFID data can help companies better support their
customers. For example, the RFID pilot uncovered Intel processors that were
sitting on the customer’s loading dock for three hours. The customer has a just-in-time
inventory model, which allows for items to be in inventory for only two hours.
The finding from the RFID pilot alerted the customer to a significant opportunity
to improve its process.

RFID is changing the way businesses do business. Intel is committed to playing
a leading role in this change.

Around the world, innovative companies are working to realize the vision of
RFID tracking systems that dramatically improve supply chain efficiencies and
visibility into inventory as well as speed operations—all actions that can lower
costs. Intel has an ambitious agenda not only to improve its own manufacturing
operations using RFID systems but also to support RFID providers with Intel
technology and help end-user companies realize the benefits of RFID systems.
The company’s manufacturing pilot in Malaysia helped further this agenda, collecting
data that will benefit participants in future RFID initiatives.

Return on Investment
The pilot RFID system gave Intel:

  • Greater visibility into inventory and the supply chain process
  • Capability to quickly locate items
  • Fast, highly reliable throughput at each checkpoint
  • Ability to supply customers with data to improve their operations
  • Reduced operating costs

Find a solution that is right for your program. Contact your Intel representative
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