HP

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HPs RFID Privacy Program

• Dan SwartwoodData Privacy Officer

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RFID Defined

• Really Frantic Implementation Date

WHY RFID??
Current State Currently out of stock of top 200
SKUs is 38 on busiest shopping
days Invoice/Delivery reconciliation costs 40B
annually Counterfeiting/Grey Market costs are
estimated at 500B Forrester 2004
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What is an RFID tag?

• RFID (Radio Frequency Identification) tag/label
  is a tag that at least has an identification
  number that can be electronically read at a
  distance even when not visible
• RFID tags have few problems of orientation and
  obscuration when compared with barcodes, magnetic
  stripes, etc.
• Thus, can be used for more than just tracking or
  payment
• RFID tags can include electronic chips, storage,
  local power source, and other functionalities
  that make them very versatile
• RFID systems are comprised of tags,
  reader/writers to identify and communicate with
  the tags, and a controller that manages the
  information interface with a computer system

Sources ABI, VDC, Philips, IDTechEx, HP Internal
Sources ABI, VDC, Philips, IDTechEx, HP Internal
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Example RFID Uses

• Function
• Tracking
• Tracing
• Anti-counterfeiting
• Entertainment
• Safety
• Security
• Auto-rejection
• Transactions
• Proof of ownership
• Anti-tamper, anti-theft

• Example
• FMCG supply chain
• Monitor prisoners, children
• Verify authenticity covertly
• Voice activation in toys
• Pharmaceutical use instructions
• Personnel tagging in secure areas
• Electronic handshake requirement
• Electronic road-tolls
• Tagging of valuable products
• Real-time detection, identification

Sources ABI, VDC, Philips, IDTechEx, HP Internal
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Limitations of RFID

• Difficult to read through metal or liquids
• Does not geo locate
• Only works at very limited ranges ( a few feet)
• Can not read through walls

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Why Now??

• WalMart Mandate
• 1 EPC tag per carton 100 read on conveyor
• 1 EPC tag per pallet 100 read at Inbound dock
• Conveyor speed of up to 600 feet per minute
• 3 Texas Distribution Centers
• By January 2005
• Other mandates
• US Dept of Defense
• Target
• Metro
• Carrefour
• Albertsons
• Commercial Customers requests

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What Does HP Stand for?

• Rules from the Garage
• Believe you can change the world
• Radical ideas are not bad ideas
• Invent different ways of working
• Believe that together we can do anything
• Invent

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HP RFID Strategy Business Driver Objectives

• HPs business objectives
• create an agile data infrastructure accessible at
  any time
• Get accurate distribution sales information
  related to products
• Product life cycle information from manufacture
  to retail channels
• enable low touch processes improvements on
  Supply Chain cost structures
• increase material finished goods velocity thru
  Supply Chain
• quality tracking at key processes in
  manufacturing
• reliable information capability for Reverse
  Distribution processes
• faster shipping and receiving processes

• HPs business drivers
• Provide RFID enabled goods to Customers who
  request them
• Use RFID / EPC internally to save costs
• Help other companies to implement
• Develop RFID / EPC related technology
• Support and enable global standard business
  processes

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I just know that RFID justification is in here
somewhere..
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Potential Consumer Benefits from RFID
Reduced costs Reduced out of stock Faster,
better targeted product recalls Faster
service Reduced drug fraud/incorrect
prescriptions Better food supply management
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The Supply Chain Business Case

• Retaining your Customer
• Tagging goods that your Customer asks you to tag
• Improving Supply Chain Efficiency
• Do things at less cost by reducing labor involved
• Increase Supply Chain velocity by taking less
  time to do the same work
• Do thing better by increasing first pass accuracy
• Lessen Supply Chain risk by increased in transit
  accountability
• Improved Data Collection
• RFID reduces effort cost to identify item
• Which can make identification viable where it
  wasnt before
• And this can improve overall Supply Chain
  visibility
• Which should reduce second guessing of events

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RFID Potential To Returns Processing Recycling
No decision has been made yet on a specific
program pending discussions on item level
tagging
Returns have to be validated against the original
shipment RFID could enable such verification
without reference to original order
Sorting material for disposition recycling can
be labor intensive RFID would enable automatic
sorting
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Potential Benefits Of Key Data On The Tag
Recording exact configuration at time of
manufacture enables faster Returns processing
Date of sale enables accurate validation of
warranty entitlement
Tagging material and components facilitates
disposition and recycling in support of the
environment
Tagging components for Rev Level control
facilitates faster recalls and inventory rework
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Business drivers for promoting privacy

• Minimizes risk of compliance breach
• Builds the brand
• Enhances trust
• Reinforces global citizenship

customer
community
employee
shareholder
Privacy Trust Revenue
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HP Privacy Principles

• support the fair information practices
• give customers control over their own personal
  data
• provide customers with choices that enhance trust
  and, as a result, grow the business
• put customers in the lead to determine their
  relationship with hp
• enforce the highest integrity and compliance in
  internal practices, and with all vendors and
  suppliers
• support trust relationship with employees

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RFID Brief OverviewSince program was launched in
May 2003, we have established
HP's RFID Privacy Efforts
Formally invited to join Core Team Nov 03
Privacy presentation to Core Team Dec 03
Joined EPC-Global Privacy group Feb 04
Weekly internal consultations
Developed internal policy position
Working with EICTA on RFID position
Working with NGOs to influence USG
Periodic meetings with
Partners/Customers
Present at the WalMart rollout Apr 04
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RFID Brief OverviewSince program was launched in
May 2003, we have established
HP's RFID Privacy Approach
Consumers should be given notice about the
presence of RFID tags Consumers should have the
choice about removing or deactivating tags
Must be a practicalsecure way to offer choices
for linking PII with RFID data
Organizations that, with permission, collect and
store PII with RFID data must take appropriate
security measures Businesses need to do more to
educate the public on uses/benefits of RFID
We need to foster constructive solutions to
privacy concerns
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HP implements the EPC Identification Label
Will be on all packaging
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Label on HP product packaging
EPC Text
EPCGlobal Logo Will also be added to bar code
label in future
RFID on back of the bar code label
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Back of Box Label (shows antenna and chip)
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Pilots To Date At HP
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The Memphis Pilot
Scheduled impacted by change of Completion vendor
and difficulties in switching vendor systems
Should be live in volume by August 2004
We are also working with our large Retailers to
synchronize our efforts with their own pilots
Tagging pallets cases with EPC Class 1 Standard
tags
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Chester Plant Pilot
Includes systems changes to Shop Floor Control
and WMS
Chester receives inkjet cartridges in bulk and
packages them for different markets and Customers
They are starting at pallet and case level
outbound and will then walk back up the process
chain to Receiving
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Sao Paolo Printer Plant
Tags will be used to carry quality control data
thru the process with the unit as it is built
Sao Palo receive components and raw material and
perform the full range of manufacturing and
completion processes, shipping finished goods to
Customer in the Latin America Region
They are starting at manufacturing processes and
will then walk down the process chain to
Shipping
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HPs RFID Privacy Program Summary

• We are a technology company with a long solid
  reputation for innovation and privacy
• Privacy is a legitimate concern of our customers
  and we will address these concerns in a
  pro-active and positive manner
• We are implementing RFID in our own manufacturing
  distribution operations and integrating privacy
  standards into those operations
• We will lead by example in the privacy space
• We can and will be a positive force to lead the
  RFID privacy discussion
• Our internal experience has given us a
  competitive advantage

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Where Do We Go From Here ?

• We expect to contribute fully to the development
  and global implementation of the EPC standards
  and privacy implementations
• We believe that HP has much to offer both as a
  very large user, as a privacy leader and as a
  technology solutions company
• We are also supporting RFID related development
  at various universities and business schools

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Q A
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