White Paper

Intel Information Technology

Computer Manufacturing
RFID/Sensor Networks

Applying RFID Technology in

High Volume Manufacturing
To explore the impact of radio frequency identification (RFID) technology in
manufacturing, Intel’s Technology and Manufacturing Group deployed an RFID pilot
within Intel’s largest semiconductor assembly and test facility. The pilot tracked 80,000
microprocessors from the end of the manufacturing line through Intel’s warehouse, into
a major customer’s warehouse, and onto the customer’s factory floor. The pilot yielded
key learnings about the technology’s value and limitations, RFID systems performance,
and business process ramifications.

Craig Dighero, Scott Thomas, and Rick Tyo, Intel Corporation

September 2005
Executive Summary
Intel initiated a pilot project to explore how we can use radio frequency identification (RFID) technology
for high volume manufacturing within our complex assembly and test operations in Malaysia.
RFID technology is maturing, and the recent evolution of global RFID standards is leading many
manufacturers to accelerate their investigations of its potential and implications.

The increased data flow resulted in new knowledge about production flows that
would clearly change business processes.

Our strategy for the pilot was built on four elements:

• Run the pilot in a real-world setting

• Extend the pilot beyond Intel’s walls by including a major customer
• Focus on end-to-end impacts
• Examine interactions between people, product, IT infrastructure, and data
In designing and building the pilot, we considered physical layouts, existing manufacturing processes,
and data and database strategies. We encountered and resolved challenges regarding radio frequency
(RF) spectrum allocation, RF interference, RFID reader performance, RFID portal configuration and
tuning, and RFID tag selection.

The pilot deployment ran for five weeks, operating smoothly and yielding significant learnings as Intel
and our customer tracked product and compared results daily. The RFID technology worked well and
experienced very low failure rates. The increased data flow resulted in new knowledge about production
flows that would clearly change business processes. Numerous potential efficiency gains and practical
improvements were discovered.

Some primary learnings for manufacturers emerged:

• Begin RFID exploration now and develop an RFID strategy

• Take a holistic approach to RFID deployment including both business and technology contexts
• Maximize cooperative relationships to accelerate learning
• Plan for RFID’s impact on information systems, which will be extensive
We can follow this pilot’s success with a larger-scale, multi-product RFID pilot involving numerous
supply chain partners across multiple countries.


Contents
Executive Summary.. ................................................................................................................................ 2

Background.. ........................................................................................................................................... 3

A Manufacturer’s Point of View.................................................................................................................. 3

Intel’s Challenge................................................................................................................................... 4
Pilot Strategy and Approach.................................................................................................................... 4
The Existing Manufacturing Environment..................................................................................................... 5

Designing and Deploying the Pilot.............................................................................................................. 6

Running the Pilot..................................................................................................................................... 8

Pilot Results and Indicated Value.............................................................................................................. 9

Summary and Next Steps.. ...................................................................................................................... 11

Conclusion............................................................................................................................................ 12

Author.................................................................................................................................................. 12

Acronyms.. ............................................................................................................................................ 12

Background A Manufacturer’s Point of View

As radio frequency identification (RFID) technology steadily
evolves, its potential to drive significant changes in multiple
industries is clear. The impact of RFID technology is
expanding with new and innovative applications in retail,
government, manufacturing, and healthcare.
The basic technology behind RFID—active receivers
reading data residing on passive tags—has been used in
various ways for 30 years. Historically, these RFID solutions
were typically proprietary, closed-loop systems, relatively
expensive, and limited to use within a single organization.
But the recent growth of standards for RFID technology has
vastly increased RFID’s potential application and impact. As
standards drive compatibility up and costs down, progress
on real-world applications is greatly accelerated. Today,
many commercial firms and government agencies realize
that RFID will drive fundamental changes in the way they do
business—the potential benefits of standards-based RFID
solutions are significant.
Manufacturing industries spend immense resources on
understanding where (physically) an item is and what
state (in terms of process) the item is in. At many points
in the manufacturing process, this item data exists on
paper—barcode labels, text labels, bills of materials, and
shipping manifests. Barcode readers can move data from
paper to computing systems, but the data may be difficult,
time-consuming, and expensive to read. If the barcode is
a unique serial number used as an index to a database,
the information in the database can be easily manipulated
when the data item changes (for example, due to a change
of location, destination, or the item’s progress through a
manufacturing process). However, the barcode itself cannot
be changed once printed on paper. As a result, items may
need relabeling and the automation possible with barcoding
technology is limited.
In contrast, RFID technology offers extensive capabilities
to change item data in real time and within processes, as
well as enable more flexible automation of data-reading
activities. This yields staggering potential benefits for
manufacturers. Better tracking reduces manual processes
and much of the “rechecking” inherent to the manufacturing
process, while reducing the frequency of lost or misplaced
items. Increased visibility into inventories lowers inventory
levels and reduces inventory costs. Supply chain data that


is faster and more reliable allows manufacturers to respond
more intelligently to changing conditions from both suppliers
and customers.
Like any powerful technology, RFID implementation raises
numerous issues. Because of its extensive reach, RFID can
potentially affect (positively or negatively) people, systems,
and processes across the manufacturing organization.
Intel’s Challenge
Intel is one of the world’s largest manufacturers of
semiconductor components. Our complex manufacturing
operations span the globe and include silicon wafer
fabrication, silicon component assembly and testing,
and board-level manufacturing. Intel is part of a complex
global supply chain with numerous suppliers upstream
and customers downstream. It was clear to us that RFID
technology had significant potential to change the way
we do business, and therefore we wanted to explore the
possible impacts. We completed an ongoing set of proof-
of-concepts and pilots that tested the effectiveness and
consequences of RFID across our manufacturing operations.
Previous pilots already led to the production usage of
RFID technology in wafer fabrication (where RFID tracking
replaced barcode scanning in automated wafer-handling
operations) and in assembly operations (where we use RFID
to prevent capacitor mixing, a high-cost error).
Intel’s Technology & Manufacturing Group wanted to explore
RFID’s ability to enable “smart object-based systems”—
manufacturing systems built on physical items possessing
flexible data. We wanted to develop an in-house RFID test-
bed to examine the interaction of technology standards,
applications, information, and infrastructure. This white paper
explains the design and execution of this proof-of-concept.
Pilot Strategy and Approach
Our strategy in designing the pilot included a number of
elements to ensure that the information captured would
be reliable and usable within our existing manufacturing
operations. To capture actionable learnings from the pilot,
our approach included these key elements:
Deploy the pilot in a real-world setting
We wanted to discover RFID’s impact on our actual
operations, not simply to play with a new technology. The
pilot was designed for, and deployed within, the production
facilities at Intel Malaysia, a large semiconductor assembly
and test facility. In this high-volume manufacturing setting,

we could extensively test the effects on manufacturing
processes, material flows, information flows, business
processes, regulatory environments, and resource utilization.
Collaborate with an important customer
We believed that RFID, as a paradigm-shifting and possibly
disruptive technology, could have significant impact on the
supply chain beyond Intel. Therefore, we wanted the pilot
to extend, if possible, into our customers’ operations. After
considering a number of potential collaborators, we decided
to work with one customer in order to limit complexity. We
chose a major PC original equipment manufacturer (OEM)
with notebook PC manufacturing facilities in Malaysia as
that collaborator.
Focus on end-to-end impacts
Though one pilot cannot cover an entire supply chain, we
wanted this effort to yield data about real product flows
across multiple environments; therefore, our design of the
pilot needed to comprehend the influences of the technology
beyond a single function or a single business process. The
greater the practical span of the investigation, the more we
could learn. From a functional standpoint, this pilot covered
product movement from the back end of Intel’s assembly
process (that is, delivery of a single computer chip for
packaging and logistical handling) to the front end of the
PC OEM’s notebook manufacturing process.
Focus on interactions
We knew that data would be collected in new ways and we
expected that the data collected would be richer and more
complete than data collected by current methods. Since
we anticipated that the new methods and the enhanced
data would present new challenges to existing processes
and capabilities, one of our objectives was to explore how
RFID changed the interactions between people, product,
infrastructure, data, and supply chain partners.
The Existing Manufacturing Environment
The pilot took place in the facilities of Intel Manufacturing
in Malaysia (“the factory”), in Intel’s nearby Malaysian
Integrated Warehouse (“the warehouse”), and in the PC
OEM’s manufacturing facility (“the customer”) 15 miles
away. The pilot tracked the movement of Intel® Pentium®
4 microprocessors from the end of the manufacturing line
(where individual processors are inserted into carrier trays),
through Intel’s warehouse, and finally to the point in the
customer’s manufacturing line where individual processors
are delivered for insertion into notebook subassemblies,
as shown in Figure 1.
The specific existing barcode-based processes were
as follows: intermediate box was placed into an “overpack box”.
1 Completed microprocessors exited Intel’s assembly and
test line at the Factory Pack Out area and were placed
in thermoformed JEDEC-style trays, as shown in Figure
2. The trays were stacked and strapped together.
2 The stack of trays was then placed into a standard-
sized cardboard box called an “intermediate box”
(I-box). Once the box was properly filled, it was
sealed and a barcode label was placed onto the box.
We placed the tags on the I-boxes at this time. The
product was then moved to the Factory Ship Out
area. (For movement within the factory and warehouse
environments, I-boxes are often placed in wheeled,
locked security cages that were also tagged and
tracked in our database—approximately 20 intermediate
boxes per cage).
3 From Factory Ship Out, the boxed product was moved
in the cages by truck from the factory to the warehouse,
several miles away. In the Warehouse Receipt area, the
product was verified, stored, and eventually picked and
packed for shipment to the customer. The process of
picking product for individual customers is called
“Split/Merge”.
Figure 1. Physical locations, the product flow steps, and the RFID read steps
Factory CPU Assembly Factory
and Test Pack
Warehouse Warehouse Split/Merge
DC Receipt
RFID RFID
OEM OEM
Receipt
RFID
4 During the Split/Merge operation, the sealed and labeled
In some cases, depending on customer order size,
an intermediate box may be opened, split up, and
repacked into multiple separate intermediate boxes,
which are then put into overpack boxes; in this case,
new RFID tags were created and attached to the new
intermediate boxes. All necessary shipping labels, carrier
labels, and packing lists were attached to the overpack
box. We placed an additional RFID tag on the overpack
box at this point.
5 The overpack boxes were placed on pallets and stretch-
wrapped as appropriate, and then shipped by truck
from the Warehouse Ship Out area to the customer. We
also tagged the pallet and had all of the overpack and
I-boxes nested under the pallet in our database and
software tool.
6 Upon arrival at the customer’s manufacturing facility, the
product was received in the Customer Receipt area and
logged in.
7 The customer moved the product into the Customer
Inventory area.
8 The product was picked by the customer in the
Customer Inventory area and sent to the Customer
Factory Floor area for consumption in the manufacturing
process.
Factory
Ship Out
RFID RFID
Overpack DC
Ship Out
RFID
RFID
OEM OEM
Inventory Factory Floor
RFID

Whenever appropriate, overpack boxes are stored and
moved on standard wooden pallets. A successful RFID
implementation must be able to read intermediate boxes
and overpack boxes while contained in a security cage and
while stacked on a pallet being moved by pallet handling
equipment.
Designing and Deploying the Pilot
Once we knew where we wanted to track product by
RFID, the next step was to carefully study the environment
and the manufacturing and distribution processes taking
place. We did extensive up-front collaboration with factory
and warehouse staffs to understand their operations. We
studied physical layouts, product flows, human procedures,
automated procedures, data flows, data management
and usage, and bottlenecks. Once we felt we had a good
understanding of the existing environment, we began
designing each element of the pilot.
When we designed the pilot, we had to consider two
“layers”: a physical layer and a logical layer. The physical
layer is where data is collected, filtered, and delivered to
the logical layer. It includes readers, antennas, labels (tags),
and device management software. The logical layer focuses
on manipulating, utilizing, and integrating the data into an
Figure 2. Thermoformed trays

existing corporate infrastructure; it consists of middleware
and links to the existing enterprise resource planning (ERP)
and warehouse management system (WMS) software.
Overall Layout
Throughout the pilot design and deployment, we strove to
minimize any impact to existing manufacturing operations.
The pilot was to be a “drop in” system operating in parallel
with normal processes. No changes were made to existing
information systems, and the existing box labeling systems
were maintained.
Radio Frequency (RF) and Reader Selection
We first performed extensive radio frequency (RF)
environmental scans to determine possible interference
issues, with particular concern regarding 802.11b wireless
networks and wireless barcode scanning systems. Initially,
we planned to use high frequency (HF) technology at 13.56
MHz because the highest capacity RFID tags (2 Kb) were
only available at this frequency. Tag memory capacity was
important because we wanted to explore the creative use of
that capacity. RFID readers are flexible and could be used
to change the way data is collected and used mid-process.
For example, we could include information such as previous
operations completed, results of these operations, next
operation required, order mapping data, waybill information,
and other customer-specific information. Another compelling
reason to pursue 13.56 MHz technology was its near-
universal acceptance worldwide without licensing. However,
high frequency (HF) technology was found to be inadequate,
as its ability to quickly read a full cage of product (through
the wire mesh of the cage) was extremely limited. Large
dollar and process investments had been made in these
cages, so changing the cages was impractical. We then
examined microwave technology at 2.4 GHz. While the 2.4
GHz readers worked marginally better, it was proprietary,
expensive, and difficult to use.
After discovering the constraints of HF and microwave
solutions, we next looked at (and eventually adopted) an
ultra high frequency (UHF) solution at approximately 900
MHz. UHF technology easily read the tags within the security
cages, read product stacked on pallets, and had outstanding
range. The disadvantages were UHF licensing issues in
Malaysia, which were representative of licensing issues in
many geographies where UHF RFID might be deployed, and
the smaller memory capacity of available UHF tags. Working
closely with the Malaysian Communications and Multimedia
Commission, we were able to license a bandwidth range.
The smaller tag memory capacity was a limitation we had to
work with.
Figure 3. RFID portal design. On the left, the full portal, the rear detail on the right
While we had a piece of spectrum to use, its narrowness
presented the next challenge. Typically, RFID readers operate
on several channels across a broad “spread spectrum”
band. The problem now was how to limit the channels and
frequencies to within the boundaries of the license. Of the
RFID reader suppliers considered, only one supplier could
make the adjustment cost effectively (via a firmware upgrade
and without a major redesign). For this reason, we chose
the Tyco Fire & Security / ADT Sensormatic® Agile* 2 RFID
readers, based on Intel XScale® technology. The technical
support from supplier engineers was excellent. The firmware
upgrade arrived by email and took 10 minutes to install.
When it became apparent that the frequency profile was still
too wide, a second firmware upgrade was quickly delivered
and fixed the issue.
Portal Configuration
Our portal design was simple and functional, as shown
in Figure 3. The portal frame was built from off-the-shelf
hardware, and could be quickly and easily assembled,
disassembled, and transported. This design allowed easy
adjusting and tuning of the dual antennas, which were
mounted on the frame and aligned with the upper and lower
shelves of the security carts. The portal also contained
the RFID reader, as well as an Intel® architecture-based

controller PC that connected the portal to the Ethernet
network and ran the data capture middleware developed by
Intel for this pilot. Where appropriate, the portal also included
a modified antenna used for writing tags. In total, the
pilot deployment included six portals at Intel’s factory and
warehouse and one portal at the PC OEM. All of the portals
were deployed at existing bar code read stations.
We made various adjustments to the power, location, and
orientation of the reader antennas to optimize performance.
We also made several modifications to the software to
improve the read/write timings and cycle configuration.
RFID Labels (Tags)
The UHF frequency decision and available space on the
intermediate box guided our tag choice. The tag had to fit
in a 3.5″ x 4″ space on the end of the box. After testing
numerous 64-bit and 96-bit tags, we selected a Class 1
“butterfly antenna” tag with a 96-bit memory capacity.
Data
At a basic functional level, the goal of the project was to
provide real-time location level data via RFID. Further goals
related to the potential value of that data stream were:
• Gain understanding of possible data architectures and
data management techniques
• Identify how RFID can structurally affect existing data flows
and existing applications
• Determine data visibility our customers might want
• Determine data Intel would like from its customers
• Determine best methods of data retention for later
data mining
At the physical level, data tags contained the following data
items (as appropriate):
• Product code (SKU) number
• Number of units in group pack (for example, the number
of processors in an intermediate box; this number changes
throughout product handling as boxes are unpacked
and repacked)
• Lot numbers
• Country of Origin
• Transaction Times and locations
Data resided on the tag either physically (bits on the tag) or virtually (a pointer
on the tag referred to item data that physically resided in the database).

• Intermediate box ID (for tags on intermediate boxes)
• Overpack box ID (for tags on overpack boxes)
• Cart name
• Pallet ID
• Delivery note (DN) number
• House Airway Bill (HAWB) number
• Customer part number
• Customer purchase order (PO) number
Middleware
We developed our own middleware application to reside
on each portal controller PC. The middleware manages the
large amounts of data generated by the RFID readers—
collecting it, parsing it, deciding what data is relevant, and
delivering appropriate data to the database. The middleware
also utilized multithreading to increase application speed; it
could read tags while interacting with the database.
Database
The RFID database was implemented with a server running
an SQL database. The goal of the database design was
to record static and transactional data while maintaining
flexibility, as requirements changed during the pilot. We
built the database around transactions. A transaction is
created for every RFID read, and is a record of an object at a
process step, and can include details such as time, state, or
identifiers. Two similar databases were utilized—one at Intel
and one at the PC OEM. For simplicity, we did not establish
a direct link between the two, but would exchange database
extracts as needed via e-mail.
Running the Pilot
The pilot was run over a six week period in November and
December 2004. In all, close to 80,000 microprocessors
worth $17 million went through the pilot, yielding a
number of key learnings. Throughout the pilot, issues were
uncovered and adjustments were made as described below.
Writing to the RFID Tags
RFID tags were written in the Factory Pack Out area and
hand-placed on the intermediate boxes. Writing to the tags
proved one of the most difficult parts of the operation.
Typically, it took several attempts to write to the tag before it
would properly complete the write. At that time, no RFID
label printers were available that would work within the
Malaysian RF spectrum, and customizing label writers was
too costly, both in terms of time and money.
This changed as the technology matured, and we decided to
use an RFID label writer to solve this issue in any production
deployment. We were also using pre-production 96-bit tags
for our pilot. Follow-on testing with production based tags
demonstrated better performance in this area.
RFID Operations in the Product Flow
After the RFID tags were written at Factory Pack Out and
applied to intermediate boxes, the tags were read and/or
written at each of the following locations in the process, as
shown in Figure 1:
1 Loaded carts were scanned at the Factory Pack Out
area portal to generate a stored list of cart contents.
(The carts also had their own RFID tag.) The loaded
carts were then sent to the Factory Ship Out area.
2 At Factory Ship Out, the fully-loaded carts were once
again scanned just before exiting the factory on their
way to the Warehouse Receipt area. This provided a
timestamp for the product’s departure from the factory.
3 At Warehouse Receipt the carts were scanned upon
arrival to verify that all boxes sent were received.
4 The boxes were unloaded from carts and placed in
inventory for later picking.
5 After being picked out of inventory for collection into a
customer order, the intermediate boxes were scanned.
6 The intermediate boxes were then placed into new
overpack boxes, which in turn received their own RFID
tags, and a write operation occurred.
7 The completed overpack boxes were then placed on
pallets for shipment. Each pallet in a shipment also
received an RFID tag, and a write operation occurred.
8 At the Warehouse Ship Out area, all of the overpack box
tags and the pallet tag were read as the pallet left the
warehouse and was loaded onto the truck.
9 Upon arrival at the customer’s warehouse (Customer
Receipt), the loaded pallet and the overpack boxes
were again scanned, and then placed into Customer
Inventory.
10 The intermediate boxes were scanned for the last time
when pulled from Customer Inventory for consumption
on the Customer Factory Floor.
Because of the tuning we had done to the RFID antennas
and readers, RFID read operations went smoothly with 99.7
percent accurate reads throughout the entire POC. RFID
write operations within the product flow exhibited the same
challenges as the earlier write operations at the end of our
manufacturing line. Throughout the entire process chain,
all transactions (read and write scans) were recorded to
databases for later analysis.
Pallet Handling Issues
We found that the type of material handling equipment used
to move a pallet through a portal will have considerable
influence over the portal’s ability to read the tags on that
pallet. Basically, the more massive the metal components on
the pallet handler, the more it interfered with RFID reads. For
pallet handlers with large metal power unit housings, leaving
a gap of approximately 25 cm between the housing and the
product on the pallet alleviated the interference.
Pilot Results and Indicated Value
We were able to identify capabilities and shortfalls, explore
implications, and discover new potentials.
RFID Tag Reading, Writing and Reliability
The high reliability of the RFID tag read process is indicated
by the average portal throughput time of two seconds per
box. Reliability was also demonstrated by the excellent read
ranges throughout all of the processing steps—there were
no significant issues reading at the cage, intermediate box,
overpack box, or pallet levels. For the pallet-level reads, we
ran the pallets past the portal twice, once in each direction,
in order to get a full read of the product on the pallet. We
chose a single-antenna design for the portal, to reduce
costs, but in a production system, we may use an improved
portal design with antennas on both sides of the palette. The
value of the short throughput time is evident when compared
to the normal time required to accomplish a barcode read
and the associated manual paperwork checking.
The reliability of the tags themselves was numerically
high—only two tags on boxes failed, for a success rate of
99.7 percent. Other RFID pilots (such as those in the Retail
industry) are yielding read rates in the 80 percent range.
However, in a high-volume manufacturing setting, a 0.3
percent failure rate can quickly become a large amount of
product. A production deployment would need very clear
processes to identify and rectify RFID tag failures. We
experienced significant difficulties with tag writing operations,
but these can be easily rectified by automating the tag-
 In our normal manufacturing process, Intel® Pentium® 4 microprocessors are
packaged in such a way that there are generally air voids between the product
trays and the sides of the intermediate box that contains them. This helps
RFID reading operations by leaving gaps through which the RF energy can
easily pass for tag reading and writing operations. Many products in a retail
distribution environment would not have the same advantage.

writing process with RFID label printers. Due to the short
duration of our test, we could not explore any potential
issues with RFID tags aging over long periods of time.
Data Collection and Management
Two key learnings occurred due to the RFID-generated
data flows. The first was that completely unexpected
issues can be surfaced by the enhanced data. The PC
OEM’s manufacturing system operates on a just-in-time
approach with a target inventory period of two hours. The
data collected during the pilot uncovered that, on average,
inventory sat on the customer’s loading dock for three hours.
Thus, the data pointed out a valuable business process
improvement opportunity that was otherwise invisible to the
customer’s system.
The second learning had to do with the very nature of our
data- and process-orientation. Generally, our internal and
external logistics systems are architected to handle product
in batches; this in turn leads us to develop IT architectures
that also deal in batches. However, RFID makes it practical
to handle product in batches of one single item. To take
advantage of this agility, our future IT architectures will also
need to be built with the capabilities to handle product as
a stream, rather than as discrete batches of multiple units.
At the same time, that single unit carries a rich set of data
about itself — its characteristics, location and state. In other
words, the item itself becomes very intelligent. Because
of the high volume of item data generated within an RFID
system, decisions about what to do with this intelligent,
single-item batch will need to be pushed to the edge of
the network. This will require “edge-ware” applications and
appliances that can communicate with each other directly.
10
Business Process Impacts
The pilot yielded numerous learnings about RFID’s potential
impact on our business processes and those of the PC OEM
customer.
Increased inventory visibility. The visibility of inventory
is increased in a number of ways. The data generated by
the RFID systems is cleaner, more accurate, and in some
cases, never before obtainable. We see more information
about the location and state of the product, both internally
and externally. This makes any location-oriented activity
(for example, confirming product shipment or receipt, or
responding to customer questions or change requests)
faster and more efficient.
Enhanced knowledge of the manufacturing and
distribution processes. The improved data yielded by
RFID systems gives us a better understanding of our
overall process, so we can establish better business
process rules and exception handling. The ultimate result
is greater total throughput.
Optimized resource utilization. We can deploy
manufacturing resources more effectively due to better
process visibility and process productivity.
Customer Relationship Value. The pilot yielded multiple
benefits between Intel and the PC OEM customer. First,
it demonstrated to both of us that extending the digital
supply chain across corporate boundaries can yield very
valuable data about the customer’s consumption patterns,
allowing us to better serve the customer’s needs. In this
case, the pivotal data concerned when the customer
needed product, and enabled better just-in-time shipment
and receipt. Second, the customer discovered process
and productivity benefits similar to Intel’s, which positively
built our relationship with the customer. The customer
plans to cooperate with us in future pilots.
Summary and Next Steps
Overall, this pilot proved that RFID will work within Intel’s
Asian facilities, and will yield measurable benefits and a
positive ROI in this setting. Our next steps include:
Expand our exploration of RFID within Intel
Manufacturing and beyond, with Intel suppliers
and customers. This pilot was actually part of an already-
expanding set of RFID pilots. There are currently four
proof-of-concept and pilot investigations being done within
our overall supply chain. We expect to launch a large
scale, multi-country, multi-product line pilot in the second
half of 2005 involving tray-packed microprocessors and
single-packaged processors. This large pilot will involve
activities in (and shipments between) North America, Costa
Rica, and the Netherlands.
Key Learnings
The pilot yielded several key learnings about how we can
best implement RFID programs:
• Begin RFID exploration now and develop an RFID
strategy. It is clear that RFID will positively impact
manufacturing environments and change competitive
environments.
• Take a holistic approach to RFID deployment. In
this pilot (and others), we discovered that RFID can
affect our operations far beyond the factory floor or
distribution center. Some business practices may
require major overhauls to take advantage of RFID’s
capabilities. Rather than being a bolt-on enhancement
to existing systems, RFID technology might eventually
mean fundamental and organic changes to business
processes.
Extensively map the positive impacts of the pilot to
business process. With the results of the pilot in hand,
we can now more extensively analyze our current business
practices to discover exactly where RFID technology would
have the biggest and fastest returns.
Articulate and share the benefits with supply chain
partners. This pilot experience allows us to explain in
greater detail how our supply chain partners can benefit
from RFID. We plan to share key learnings with suppliers,
customers, and solution providers, and to advise on
possible joint RFID activities.
Assess the readiness of our information systems.
As expected, the pilot confirmed that RFID technology in
a manufacturing environment generates a large increase
in data volume. We need to assess what will be required
to adapt our information systems to handle the increased
data flow and to create value from it.
• Partner relationships are essential. Forming
relationships with select partners, whether suppliers,
vendors, solution providers, or customers, can greatly
reduce the learning curve. Our experience is a good
example of how the right partners can increase
knowledge and minimize problems quickly.
• Information system impacts will eventually
be extensive. The impacts will come in at least two
forms. First, the large amounts of data generated by
RFID systems will require that processing power and
intelligence be pushed towards the edge of the network.
Otherwise, the network itself could be overwhelmed.
At the same time, the number of nodes will multiply
exponentially. These developments will have fundamental
influence on future IT architectures. Second, the high
value data that RFID systems produce will spawn whole
new business processes. These in turn will need to
be comprehended and serviced by future
IT systems.
11
Conclusion
The RFID technology worked well and experienced very
low failure rates. The increased data flow resulted in new
knowledge about production flows that would clearly change
business processes. We discovered numerous potential
efficiency gains and practical, and we can follow this
pilot’s success with a larger-scale, multi-product RFID pilot
involving numerous supply chain partners across multiple
countries.
Authors
Craig Dighero is a RFID Supply Chain Program Manager
with the Customer Fulfillment, Planning and Logistics Group
(CPLG) at Intel Corporation.
Scott Thomas is a senior industrial engineer with
Customer Fulfillment, Planning, and Logistics (CPLG) at Intel
Corporation.
Rick Tyo is a research integrator with the Technology
Manufacturing Group (TMG) at Intel.

Acronyms and Definitions

DN delivery note

ERP enterprise resource planning

HAWB house airway bill

HF high frequency

JEDEC a developer of standards for the

solid-state industry

OEM original equipment manufacturer

PO purchase order

RF radio frequency

RFID radio frequency identification

UHF ultra high frequency

WMS warehouse management system

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