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An RFID Fashion Statement

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  • 1. D E D I C AT E D T O R A D I O F R E Q U E N C Y I D E N T I F I C AT I O N A N D I T S B U S I N E S S A P P L I C AT I O N S www.rfidjournal.com May/June 2009 “Charles Vögele Group has taken a vertically integrated approach to RFID, tracking goods from Best RFID the point of manufacture to the point of sale. This Implementation is probably the most comprehensive retail supply- chain application I have seen.” —Awards judge Bill Hardgrave, director, RFID Research Center, University of Arkansas An RFID Fashion Statement Switzerland’s Charles Vögele Group discovers that fashions tracked and managed via RFID are always in style. by john edwards hile Switzerland isn’t considered with minor exceptions in Switzerland, we W one of the fashion capitals of the world, it is known for its com- mitment to product design and construction. have purely 100 percent private label,” says Thomas Beckmann, VP of group supply- chain management for Charles Vögele. Now it’s on the map as the place where fash- “Everything is designed by ourselves and was ion and technology converge, thanks to a produced according to our orders.” “Swiss-made” item-level RFID system devel- The RFID system that places Charles oped by fashion retailer Charles Vögele Group. Vögele on the leading edge of supply-chain Based in Pfäffikon, near Zürich, Charles technology tracks individual garments as Vögele is active in international retail cloth- they move around the world. “It’s the first ing markets, operating subsidiaries in time ever that RFID has been used to do Switzerland, Austria, Belgium, the Czech end-to-end item-level tracking—from tag- Republic, Germany, Hungary, the ging in Asia all the way to the stores in Netherlands, Poland and Slovenia. The com- Slovenia,” says Prasad Putta, VP and general pany specializes in women’s, men’s and chil- manager of merchandise visibility solutions dren’s collections, which are produced by for Checkpoint Systems, the RFID technol- external suppliers in various countries in ogy provider that helped Charles Vögele Southeast Asia and Europe. “In our stores, develop its system.
  • 2. Like a growing number of retail businesses, pliers: a pair of “A” suppliers, with a total of Charles Vögele believed particularly those carrying high-value items, eight production sites, that through the years that item-level information would provide a base for Charles Vögele was intrigued by the idea of had achieved a solid performance record and competitive advantage, using RFID to track products on an item- overall good relationship with Charles increasing sales rates and decreasing supply-chain level basis. The technology promised to give Vögele; and all the “B” suppliers, which pro- costs. the company visibility into key supply-chain duce garments for the retailer either at a low steps, while providing fuller control over volume or on a sporadic basis. Both “A” and inventory and store stocks. “B” suppliers were asked to RFID-tag the After pondering the matter, Charles garments they produced. The “A” suppliers Vögele soon found itself focusing on a single, were also required to use handheld RFID fundamental idea. “We believed that item- interrogators to help their employees pick level information would facilitate better and pack orders faster and more accurately. information and process development in our “‘A’ suppliers executed an RFID-based pick- entire supply chain,” Beckmann says. “That ing and packing process,” says Jörg Koopmann would provide a base for competitive advan- of KooBra Software Entwicklungs, a German tage, which could increase sales rates and software developer that collaborated on the decrease supply-chain costs.” project. “‘B’ suppliers picked and packed tradi- tionally, without any technical support.” The DESIGNING A SYSTEM approach enabled Charles Vögele to compare delivery performance between RFID-enabled Charles Vögele began developing a sophisti- and non-RFID-enabled suppliers. “The result cated RFID system, working with a team of was that ‘A’ deliveries were more accurate, Daniel Baerlocher external partners. To provide a standards base according to the order we send off, than the ‘B’ for its RFID infrastructure, the company suppliers,” Beckmann says. turned to EPCglobal, which ensures that Both supplier groups transfer their ship- every tag is serialized and unique. ments via a logistics service provider to a The project focused on two types of sup- container freight station (CFS) located near 2 RFID Journal • May/June 2009
  • 3. Shanghai Harbor, in China. At the station, Front store/back store stock booking. RFID interrogators read every tag on every RFID records which items are brought out garment inside each box received, verifying from stock and onto the sales floor, updating the data against a virtual packing list. “When the status of each item individually. the boxes get to this CFS, the quantities in The RFID tags serve a dual function, says the boxes are checked without opening the Checkpoint’s Putta. They operate as ordinary boxes,” Beckmann says. “If they are off, the RFID tags for traditional supply-chain and box is marked with an X.” The mark serves as inventory-control processes, and as electronic an important signal for inspectors located article surveillance (EAS) tags inside stores to farther down the delivery chain. deter shoplifters and employee theft. The next step in the garments’ journey from Beckmann notes that Charles Vögele is Asia to Europe is a stopover at Charles also exploring the possibility of using RFID “The project was created Vögele’s European hub, located near Hanover, to study consumer buying habits. Recently, in a way that allowed Germany, where quality checks are performed shoppers agreed to participate in a customer us to learn and develop on the goods. Damaged and inferior deliveries tracking trial at one of its stores. “People were as we moved forward are sent back to the suppliers. Shipments des- given RFID tags and left to roam the stores,” to improve technology tined for the five stores in Slovenia head to Beckmann says. “By tracking customer and optimize running Charles Vögele’s distribution center, just out- movements, managers could determine what processes.” side of Graz, Austria, for short-term storage. types of racks [presentations] sold, which did —Thomas Beckmann Here, employees inspect incoming cartons, not and which areas were most popular.” opening those marked with an X to inventory and repackage the garments. SHAPING THE FUTURE Before delivery to the Slovenian stores, some garments are sent to a value-added The entire system took about two years to logistics service provider for final prepara- design and implement, Beckmann says. tion. The items undergo a “tunneling” process Planning began in November 2006, followed that uses heat and humidity to steam out by development and testing in August 2007. wrinkles and creases. The rollout got under way in March 2008 RFID kicks into high gear as the gar- with source tagging in Asia. Warehouse ments arrive at each store, each of which has tracking began in June 2008, and the stores approximately 800 square meters (8,611 came online in August. From September square feet) of floor space, roughly 25,000 through December, performance measures products and a single point-of-sale (POS) and optimization processes were established. position. So far, the company has RFID- “The project was created in a way that tagged more than 380,000 items. Beckmann allowed us to learn and develop as we moved says the technology is used for: forward to improve technology and optimize Goods entry and departure tracking. running processes,” Beckmann says. Handheld RFID interrogators are used to He notes that item-level tracking poses record the arrival of new garments, as well as unique challenges. Perhaps the most signifi- the disposal of any unsold merchandise. cant issue the company faced was tweaking Stock-out management. Handhelds tell the system to get accurate reads on multiple store employees when stock needs to be products jammed together inside a single replenished. box. “A unique hanging garment is not a POS transactions. Fixed RFID interroga- problem for RFID at all,” Beckmann says. tors under the counter read the tags, allowing “But if you have a few hundred pieces on a the system’s software to record the sale and flat pallet, then you come into some limita- update the store’s inventory database. tions. If you look for swimwear, where you RFID Journal • May/June 2009 3
  • 4. have tiny products and hundreds of products with- structure without close cooperation from several in one box, there are challenges for RFID technol- technology and logistics partners. Checkpoint ogy.” Systems supplied the system’s ultrahigh-frequency Charles Vögele also ran into a perplexing situation Gen 2 tags, and Impinj and Sirit fixed interrogators inside some of its stores: Interrogators occasionally and antennas. The company also provided software coughed up double or triple tag reads. Beckmann for POS and front store/back store readings. says technicians tried to solve the problem in various KooBra Software Entwicklungs provided hard- ways, including modifying the software, adjusting ware and software for the backbone system. Key the interrogators and even installing different anten- elements of the software solutions are used in pick- nas. After a good deal of head scratching, they sud- and-pack processes at the supplier’s side, goods denly realized that something in the flooring was receiving and distribution along the entire supply reflecting RFID signals. “We ended up with a stupid chain, and stock-out handling processes on the solution, which was just installing a different floor- sales floor. To speed both training and daily use at ing,” he says. “The read accuracy improved immedi- the supplier sites, KooBra developed a user inter- ately.” face that displays in Chinese, as well as in The project aroused suspicion at some steps Slovenian, English and German. along the supply chain, where the technology’s Kuehne+Nagel, a logistics service provider, arrival was viewed as a potential threat to employ- developed container freight station processes and ee jobs, Beckmann says. “More transparency, key performance indicator metrics. Meyer & Meyer improved processes [and] efficiency…led to inse- and Jöbstl, two warehouse logistics service curity and fear,” he says. RFID education and providers, adapted their processes to accommodate training helped the employees understand that the RFID system. their careers weren’t at risk. On the other hand, “This team met regularly with a very open mind- sales staff welcomed the new transparency and effi- set,” Beckmann says. “Whatever problems we faced, ciency of operational processes on the shop floor, we discussed together to find the most practical Beckmann notes. solution.” The team members held a weekly phone Looking back on the project to date, Beckmann conference for the duration of the project. says he’s more than pleased with the results. In While the initial launch covered only a limited quantifiable terms, he reports that Charles Vögele is number of suppliers and just four stores, the system achieving: was designed from the outset for easy expansion. • Time savings of 70 percent or more when tak- “The way we set this up, we can install the system ing store inventories wherever we want, on any RFID-equipped shop • Time savings of 70 percent or more when tak- floor,” Beckmann says. ing warehouse inventories Besides creating more transparency and greater • A 7 percent increase in accuracy of picked efficiencies, Beckmann believes the system has orders in factories allowed Charles Vögele to gain fresh insight into its There have been ancillary benefits as well, day-to-day operations. “We discovered RFID tech- including: nology changes processes,” he says. Down the road, • Increased sales, thanks to fewer out-of-stock Beckmann sees RFID playing a major role in how items the company will design facilities and meet cus- • Support for Charles Vögele’s supply-chain pol- tomer needs. “It’s more a change-management issue icy of having “the right product at the right place on than a pure technology issue,” he says. time” Beckmann offers one final word of advice to retail- • Better data for tracking and tracing ers pondering the creation of their own item-level • More accurate planning information tracking system: “RFID is a new technology facilitat- Beckmann acknowledges that Charles Vögele ing all kinds of new and different processes. Just be would not have been able to build its complex infra- open-minded.” Posted with permission from RFID Journal. Copyright © 2009. All rights reserved. #1-26487652 Managed by The YGS Group, 717.399.1900. For more information visit www.theYGSgroup.com/reprints.