Zimmer engaged with IOTAP to develop and deploy a global RFID solution on SAP to automate shipping and receiving functions.

Demand for Zimmer’s products is generated by distributor sales representatives working with doctors at a hospital to place orders for an array of implantable parts and instruments that might be required for a surgical procedure, such as a hip replacement. Given the time sensitive and critical importance of those procedures, orders must be 100% accurate and timely and must contain all the items the surgeon might possibly require. The distributor must pick, pack, and ship a “Loaner Kit” – consisting of 100’s of “Consigned Inventory” items, meaning the distributor will retain ownership of the inventory until it is consumed as part of the surgical procedure. However, much of the Loaner Kit, possibly valued in the tens of thousands of dollars, will ultimately prove to be “Just-in-Case” inventory – as much as 97% of the Kit will ultimately be returned unused - creating a “reverse logistics” challenge to verify that returns are completed in a timely fashion and inventory is re-stocked, visible, and available for processing on another order. The result is a mission critical order fulfillment and inventory tracking business process involving massive amounts of working capital tied up in high-value inventory and a reverse logistics challenge for billing and restocking purposes.

Benefits:

• Reduce order verification from 40 minutes to 2 minutes (90% reduction)
• Lower inventory by 7 to 10
• Eliminate need to for head count increase and reduction in overtime by 20%

Business Situation: Zimmer mandated a quality assurance process in its Distribution Centers to ensure 100% order accuracy which required multiple physical inspections. Given the time consuming and labor intensive process, Zimmer realized the imperative to deploy RFID, to automate the shipping and receiving process to reduce the time and cost of inventory management. Projected benefits from the project business case, in addition to consistently achieving 100% order accuracy and on-time delivery, made an RFID enabled solution a must do. Solution Outcome: Global RFID template for all shipping and receiving functions Rapid Order verification Rapid return of inventory to stock (Dock-to-Stock) Item level tracking for visibility and enhanced customer service Rapid inventory and cycle counting

Deliverable Overview:

• Enterprise scalability, security, and reliability
• Configuration of systems like SAP ECC, PI and AII
• Development of RFID device controller software to eliminate the need for middleware licensing.
• Development of custom application with desktop capabilities using Java/ J2EE.
• Developing interfaces and enhancements in ABAP for SAP ECC and SAP AII.
• Project management of round-the-clock, off-shore software development and on-shore implementation processes leveraging technical expertise in disparate platforms and disciplines.

Summary:

• Delivered a global template with 6 months from requirements to testing
• Delivered 14 system interfaces
• Delivered 7 enhancements
• Java based custom application for warehouse operations

The Bottom Line: With the use of RFID technology at Zimmer they have not had a picking error since 2005 in the Asia Pac operations.