When it comes to improving supply chain visibility, item-level RFID tracking has long been considered a key technology initiative. Few manufacturers and retailers, however, have deployed RFID at this level, typically citing operational obstacles or cost concerns. Not so in the apparel industry, where a number of large retailers have implemented RFID to track garments from the factory to the sales floor. Case in point: Serge Blanco, the French sportswear designer and retailer. It has improved inventory turns and productivity at its distribution center (DC) with an item-level tracking system.
Serge Blanco, named for the famous rugby player, is one of the world's leading sportswear retailers, with stores in Europe, Russia, Africa and the Middle East. But manual receiving processes at its Toulouse, France, distribution center were making it difficult for the DC to keep pace with the company's rapid growth.
With more than 2 million items moving through the supply chain each year, and sales expanding at a rate of 30% annually, it took as many as three days for the DC to receive, verify and ship merchandise, which had significant ramifications on product availability at the store level.
Initially, the company considered expanding the distribution center, but ultimately decided to find a way to improve productivity without adding more space or staff.
After investigating how other clothing retailers had used RFID technology to improve supply chain performance, Serge Blanco deployed a solution from TAGSYS to speed distribution center operations. Goods are now tagged at the item level, then scanned during receiving and other key operations at the DC using a combination of fixed-position and hand-held RFID readers, along with the TAGSYS e-Connectware middleware, which monitors installed RFID infrastructure, manages the RFID data and feeds information to the company's ERP system.
“After having conducted a study among other clothing retailers, such as Boboli and Throttleman [two end-users of the TAGSYS RFID system], we decided to go for the same solution,” says Mathieu Pradier, Serge Blanco's vice president of operations.
Real-Time Inventory Tracking
TAGSYS studied Serge Blanco's merchandise and operations, recommended specific UHF tags and equipment for the environment, and worked with the company's suppliers so they could apply the tags at the point of manufacture. The vendor also designed a system featuring an unattended tunnel reader to identify incoming shipments at receiving, along with other fixed-position and hand-held RFID readers to identify goods at all key process areas in the DC.
The middleware collects and manages all RFID data, interfaces to Serge Blanco's OCEA ERP system from Ordi Conseil, and provides information dashboards that show the real-time status of inventory and orders.
Suppliers apply an RFID tag to each garment, and send Serge Blanco an Advance Shipping Notice (ASN) EDI message or other notification when orders are sent. When shipments arrive at the Toulouse DC, the cartons pass through a UHF tunnel reader at the receiving dock, and the tag information from each carton is compared to the ASN. If there are any incorrect, extra, or missing items, the carton is transferred to a rework station. Otherwise, the cartons are assigned to DC workers for putaway.
“Now 100% of our products are identified with a unique ID number,” Pradier says. “RFID brings us a lot of new item-level information about our merchandise. For example, when we read the RFID tags at receiving, we have exact visibility into the incoming stock, we can identify any shipping mistakes by the supplier, and we can measure the productivity level of our staff.”
Whenever items are moved to rework stations, putaway locations, picked to fill orders or shipped to stores, the transaction is recorded with a Bluetooth-enabled hand-held reader, or a fixed-position reader. The company uses an RFID smart label printer/encoders for any goods that require relabeling.
The middleware receives all the transactions, and updates its dashboards and the ERP system in real time. At shipping, the middleware interfaces to the ERP system to compare the store order to the items in the shipment. The system automatically validates that the shipment is complete and accurate without any employee intervention.
100% Tagging Improves Productivity, Sales
With 100% of its products uniquely identified with an RFID tag, Serge Blanco has been able to improve productivity by 45% and now turns shipments around in less than 24 hours (instead of three days).
The time required to record an incoming pallet of goods and verify its contents was reduced from 1.5 hours with manual methods to three minutes using the RFID tunnel. Receiving volume increased 25% and is processed with less labor. Previously, up to 10 workers would be assigned to receiving, processing an average of 25,000 items. With the RFID system in place, two workers process an average of 35,000, 10 times faster.
The company is not only working faster, but also more accurately — it has not made a shipping error since it began using RFID. Serge Blanco also credits the system for helping it optimize inventory levels and boost sales through improved merchandise availability at the stores.
Serge Blanco has also achieved near perfect inventory accuracy at the DC. “One-hundred percent of articles received are identified,” says Pradier. “We have absolute visibility of 100% of the articles coming in, 100% of the articles going out, and almost 100% visibility of stock in the DC.”
The system has grown with Serge Blanco. After the item-level RFID solution was implemented, the volume of tagged goods in the Serge Blanco supply chain has considerably increased. Even though the company has many more products to manage, it has much greater visibility into its inventory levels and overall operations.
RFID has proven so successful that the company is expanding the program up and down its supply chain by working with suppliers to increase their use of RFID, and by planning in-store systems to better manage shelf availability and store inventory, measure and improve sales conversion rates, and reduce shrink.
Since the initial deployment of the RFID system in 2009, Serge Blanco has begun testing item-level tracking at one of its retail stores in Toulon, France. Should that pilot prove successful, the company plans to deploy hand-held RFID readers at each of its 40 stores to track products as they are stocked on shelves, as well as fixed readers in the dressing room areas and at the exits.
Currently, staff at the Toulon store use hand-held devices to read the tags during receipt and to take inventory on the sales floor. Fixed readers in the fitting room area provide data on which garments were tried on but not purchased. Inventory is updated in real time as customers move through the check-out process (tags are removed at the point of sale), which has reduced cycle counting in the store. Shrink management has also improved, because readers at the exits sound an alarm if a tagged garment is taken out of the store.
“Using RFID in our stores will give us real-time information about our inventory, sales and shrink,” Pradier says. “The data generated will improve our replenishment processes and inventory management. By optimizing our merchandise availability levels, we can enhance the shopping experience while increasing sales.”
Brian Albright is a freelance journalist who has been covering the information technology industry since 1997. He was an editor with Automatic ID News and Frontline Solutions magazines, and is currently principal of Albright Communications.
