The success of radio frequency identification (RFID) pilots at Marks & Spencer (M&S) could lead to widespread use of the technology throughout the retailer’s supply chain.
The company recently announced that it is to start a full rollout of item-level tagging in its clothing departments (Computing, 16 November).
The food department is also using RFID to fast-track delivery and receipt of stock, and increase visibility in the supply chain.
Speaking exclusively to Computing, Ian Mumby, M&S head of food supply chain and logistics, says the pilot programmes have reached the stage where the company has absolute confidence in the technology.
‘The next challenge is to explore the opportunities that RFID presents in the supply chain,’ he said.
‘Now that we have improved speed, accuracy and visibility of deliveries from supplier to the depot, we will look to other areas where we can use RFID.’
Such areas include scanning products from the depot to M&S shops – trials are already under way at three depots and in 12 shops – and the installation of RFID readers at all stages of the supply chain.
Mumby says the firm’s most advanced suppliers already read the tags at various points in the supply chain, from the production process to dispatch.
‘It means that suppliers can always be 100 per cent certain of how many trays and what type of products they have dispatched,’ he said.
‘Scanning products as they go out to shops will also reduce wasted stock through improved accuracy.’
M&S first tagged returnable food trays in 2002, and now 115 suppliers write to 1.8 million tags a week for products delivered to seven depots.
Mumby says the technology, which has read rates of 98 per cent at tray level and 89 per cent at pallet level, has proved robust.
The retailer is so convinced, it is to extend item-level tagging from 42 shops to 120 next spring, and expand from six to 13 departments next autumn.
M&S head of clothing RFID James Stafford says the rollout will be a two-stage process as adoption is increased.
‘All garments are tagged at the source, but only 42 stores were used in the pilot, so we will increase the number of readers to 120 stores between January and May and equip each with the communications link to a secure stock database,’ he said.
‘Parallel to that, we will add more clothing departments.’
Stafford says the implications of the item-level success mean that RFID technology will be used across the supply chain, from the production of the garment to its arrival in-store.
‘The opportunity to improve visibility in the supply chain and ensure that we get the right volume of goods into our stores is very exciting,’ he said.
‘RFID can give us visibility through the supply chain, right down to item location. So our goal is to get other businesses or suppliers to use the technology.’
Stafford attributes the success of the RFID pilots to the company’s step-by-step approach.
The company started piloting item-level tagging in 2003 in just one shop, extending it to six shops over 18 months and 42 shops earlier this year before deciding on a full rollout.
By attaching ultra-high frequency 896.5MHz tags to clothing items, the retailer knows exactly what is in stock and can quickly replace missing stock.
Improved availability has boosted sales and provided more detailed information when stores conduct stocktaking.
‘RFID has presented a great opportunity to do a more detailed stocktake of sizes and colours, not simply improved the efficiency of previous processes,’ he said.
‘We could not do such a detailed stocktake without it, as it would be too time-consuming.’
Gartner managing vice president John Davison says M&S took a sensible approach to the introduction of RFID where other retailers have not.
‘M&S began using RFID for asset management, which is considered to be the low-hanging fruit because it is easier to implement,’ he said.
‘It also has a close relationship with its suppliers, and engaged them rather than mandated their involvement.’
Davison says the company is now in a good position to expand its use of RFID, which will deliver further benefits.
‘RFID will give M&S better visibility through its whole supply chain,’ he said.
‘This can deliver better stock accuracy, improved availability of products, better replenishment, and even location of stock in the back room.’
RFID successes and failures
z Tesco blamed frequency standards and concentration of readers in the warehouse that affected performance on its failure to roll out RFID to a planned 1,400 shops and 30 distribution centres. It opted to tag cages and trolleys instead of individual items.
z Manchester Airport has conducted RFID trials for passenger tracking, asking travellers to wear tags around their neck to track them through the airport. By increasing efficiency at check-in and security, the airport can maximise passenger spending in the retail zone.
z Asda started limited trials of RFID this year after concluding that the technology is in its infancy, with no suppliers involved. The retailer will track returnable RFID-enabled cages used to distribute goods in warehouses and shops.
z Food manufacturer Del Monte has tested RFID in warehouse conditions for 18 months, subjecting the technology to interference from phones and electronic devices. But it encountered problems with metals and liquids interfering with the ultra-high frequency tags.
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