Leveraging RFID-Enhanced Networks for

Ocean Cargo Visibility and Security:

Vic Verma
Chairman, President and CEO
Savi Technology

AIDC 100 "Truth in Technologies 2005: Supply Chain RFID"

Challenges to Supply Chain Efficiency

Supply Chains Have Become Increasingly Complex

Increasing Outsourced Off Shore Manufacturing
20+ Entities Participate In The End-to-end Movement Of An Ocean Container
Shippers Vary Manufacturers & Service Providers For Best Price & Service
Carriers Vary Schedules And Routes For Maximum Efficiency

Security Issues Threaten Supply Chain Disruption

Potential For Weapon Of Mass Destruction Smuggled In Ocean Containers
Subsequent Impact To Global Commerce Would Be Significant

Anti-terrorism Regulations Increase Complexity And Costs

U.S. Initiatives
24 Hour Manifest Rule, Seal Checks
International Initiatives
ISPS codes for ship and facility security
World Customs Organization
Recent Drivers Accelerating Change

US CBP expected to pass verification rule rollout to

industry early next year
Driving collaboration among carriers, shippers, terminal operators
and tech companies to finalize e-seal standards
Wal-Mart and DoD compliance continuing to next wave of
suppliers
Driving companies to look for ways to gain value in international
logistics operations
Source tagging growing as mechanism to comply
Bonner recent comments on Greenlane
December 31st goal to define benefits of use of smart containers
Standardization among allied militaries for global container
tracking
IBM/Maersk joint initiative
Ocean Cargo Supply Chain Executive Priorities

Reducing Inventory and Assuring Container Security

are the most important issues supply chain executives are managing (n = 24)

Assuring Container Security 4.0

Reducing Inventory 3.9
Reducing Lead Time Var. 3.7
Reducing Stock Outs 3.7
Preventing Lost Containers 3.5
Managing POFR 3.3
Reducing Labor/Fees 3.1
Locating Lost Containers 3.0
Assigning Liability 2.8
Increasing Mfg Uptime 2.7
Reducing Shrink 2.4
Reducing Insurance Costs 2.2
Complying with RFID Mandates 2.1
1 3 5
Not Moderately Most
Important Important Important

Source: A.T. Kearney interviews

Savi Networks Commercial Launch

HPH and Savi Launched Savi Networks in April

service for container tracking and security

In August, 0 false tamper field trial of 3rd

generation RFID sensor tag on Mitsui containers

Officially launched SaviTrak service last week

Consumer goods manufacturer operational program
Full source tagging and nested visibility solution
Business Model

Savi Networks is a utility service

Installs and operates a shared network infrastructure
Operates the service to collect data, monitor the network and provide
information to customers

Savi Networks provides integrated hardware, software, services, and

tags necessary for users to connect
Manufacturing and consolidation facilities that originate cargo
Distribution centers receiving cargo
Enabling nested visibility and source tagging

Savi Networks provides data to carriers, shippers and/or other

customers
Hosted view of the information
Integration to backend systems
Per transaction or subscription basis
Features

Solution Enables:
Continuous supply chain performance improvement
Exception management and Supply chain analytics
Tamper alerts and audit trails for loss prevention and risk management
Data availability and accuracy improvements
Passive tag reads for manifest creation and nested visibility
Enables retail RFID mandate compliance as source
Automated ASN creation and other documentation
Automated monitoring and alerting during import transport segments
Electronic securing by authenticated users and chain of custody
controls
Chain of custody control at key hand offs in the supply chain

Anticipated future capability:

Satisfy government requirements for Greenlane treatment of imports
E-Seal verification once standard is completed
Device-Level Solution

Connectivity to users on the ground, verifying people,

automating processes, validating security, capturing origin and
destination physical location and status
Reader Solution

Chain of custody control through confirmation of physical

movement and container status at process points like the port
crane operations
Nested Visibility: Supports Source Tagging

Integrated, global, multi-modal

Hardware

Software

GPS
Savi Software Supports Multiple AIDC Technologies
Transport Movement
Item Packaging Unit Load Container
unit vehicle

Barcode

Passive RFID
Gen 2
ISO 18000-6

Active RFID
ISO 18000-7

GPS

Zebra Phillips TI Qualcomm

Symbol Intermec SAMSys @Road
Intermec Matrics Thing Magic PAR
Alien Wherify

SmartChain Software
Networked Software

Networked software application provides users specific data

security, alert and reporting capability for exception
management, audit and analytics information, and operating
system integration (ERP, TOS, TMS)
Managed Services

Savi Networks is Implementing an ISO Standard RFID Network

Including a Hosted Application to Provide Global Visibility To and
Manage The Security of Ocean Cargo Containers

Savi Networks Hosted Software

Managed Services

Shippers Implement Compatible RFID Infrastructure

At Supply Chain End Points, Connecting To Savi Networks Hosted
Software Extending The Network Across The Global Supply Chain

Savi Networks Hosted Software

 6
Managed Services

Web Based Services Alert Services Data Services

Savi Networks Hosted Software

Savi Networks Will Provide Visibility and Security

Transaction Priced Services To Shippers Through
Web Portal
Alert Services
Direct Enterprise Data Integration
 Value to Shippers

Supply chain executives estimated the total average benefit per

container from Savi Networks Solution is approximately $1,150(1)

Other
6%
Increase Key Findings
Mfg. Uptime
Approximately 95% of the total
16%
benefit derived from the offering
Reduce savings are driven by four factors
Inventory Reduced inventory carrying costs
31% Reduced out-of-stocks
Reduce Reduced lead time variance
Lead Time Increased manufacturing uptime
Variance
17% Reduce Out- Reducing labor and fees (3%),
of-Stocks increasing security (2%), preventing
30% lost containers (1%), and reducing
insurance costs (0%) combined for
6% of the total benefit

Note: (1) Reducing insurance costs showed zero benefits or the benefits could not be provided, according to the interviewees
Source: A.T. Kearney Interviews; A.T. Kearney analysis
 Leveraging RFID-Enhanced Networks for
Ocean Cargo Visibility and Security:

Vic Verma
Chairman, President and CEO
Savi Technology

AIDC 100 "Truth in Technologies 2005: Supply Chain RFID"