Editor's Note: This article is based upon some presentations and information I brought back from the 2007 RFIDWorld Conference. The companies discussed include, in the following order: Kimberley-Clark, FloraHolland, Marks & Spencer, Siemens and Intel.
The RFIDWorld convention, held last month in Dallas, Texas, contained some new developments and interesting seminar sessions led by a diverse group of presenters from all points on the supply chain.
One quite enlightening forum was led by a group that included the head of RFID projects at leading British retailer Marks & Spencer, the director of the Innovation Center at health and hygiene products powerhouse Kimberley-Clark and a logistics project leader at Dutch flower auction FloraHolland. Although their companies and needs are very different, all three of these end-users of RFID reported finding improved efficiency and traceability, and most importantly saving money, through piloted RFID applications. All three also report the intention to expand the scope of RFID into other areas of their business processes.
Kimberley-Clark: "A Case Of RFID"
Irving, Texas-based Kimberley Clark's head of sensing technology Michael O'Shea took great pains to emphasize that businesses wanting to get the most out of an RFID investment must be prepared to fully re-engineer fundamental business processes. "Decide what are those applications that you're going to tackle, and start piloting projects around those choices," O'Shea cautioned, as anything less than full commitment will reduce payback on investment, and not allow the technology to reach its potential. "If you're just in a compliance one-off' mode, you're going to minimize results, and limit your scalability and repeatability."
Because Kimberley-Clark's products are handled by both K-C staff and co-packers and distributors, the team needed to build their system around a fully mobile equipment set that O'Shea called "RFID in a case." Working with Motorola, Adasa and OAT Systems, K-C has built a portable solution that frees them from fixed assets in-facility, and allows the necessary personnel to encode, apply and associate the tags for each pallet and wirelessly upload the data to a central point for tracking. "The case can be checked on a plane, and our solution can be executed by anyone, anywhere, who is supporting our operations," said O'Shea.
Pointing to the variety of hardware and software solutions in evidence at the show, O'Shea commented that companies have many points along the supply chain where RFID doesn't just pay for itself in reduced waste, instead adding clear value. For instance, O'Shea used the example of merchandizing, where K-C offered well-designed sales promotions to retailers but often didn't see the expected results in sell-through -- often because the merchandise was sitting in the back of the box store instead of on the sales floor.
"Only 56% of the time were our displays getting out on the floor," related O'Shea. "Late stores had lower sales lift and benefited much less from the promotions." Such bottom-line impacts drove a clear business need that resulted in K-C's collaboration with OAT Systems to use their pallet-level RFID data to create color-coded, real-time data reports for merchandisers that pinpoint the exact stores needing immediate attention.
"If people knew how expensive flowers are to produce, they would talk about how cheap they are to purchase, instead of complaining about how expensive they are."
The Dutch pride themselves on being a tech-savvy people in general, and RFID applications are no exception. What is seen elsewhere as "cutting-edge" is often just one more tool in a Dutch technological arsenal continuously employed to drive production costs down across businesses of all kinds. Holland is the floricultural capital of the world, and FloraHolland is the largest auction in this market. Both the scale of the business involved and the unique demands of such perishable goods ("From the moment the product is sold to the moment it reaches the buyer must be less than 90 minutes," related Van Vliet) showcase just how important traceability and speed are to this giant flower auction, and demonstrate why the auction house has been using RFID-enabled trolleys in a reader-embedded warehouse for five years.
Van Vliet's post-project advice:
- Think big, but start small -- take the time to do a pilot project.
- Make a complete inventory of all the requirements (functional, technical, etc.)
- Don't just involve the IT people, but the business people, as well -- let business be the driver.
- Team up with all parties involved, internally (logistics, management, etc.) and externally (antenna provider, software provider, etc.) and keep communications open.
Smart Labels At M&S
As the largest clothing retailer in the UK ("One in five men is wearing a M&S suit at any time," claimed spokesman James Stafford) and a multi-billion dollar food retailer to boot, London-based Marks & Spencer could easily rest on its laurels, using its prodigious resources to maintain its $14 billion in annual revenue. However, Stafford and his team saw the potential in RFID to fit the company's sales mantra, which involves having every size of every SKU in every color available to every customer in every store at all times.
The RFID system that M&S piloted involved item-level, RFID-enabled labels for stock control in a number of clothing departments within a 50 store set. The system allowed full inventory to be done very easily on a weekly basis, with minimal labor. "The sales results are encouraging, and the store teams are enthusiastic, and our customers like the improved size availability. We're rolling it out to our 120 biggest stores and all merchandise areas as fast as they can get the tags rolled out and in the stores," said Stafford.
In a nod to the concerns of privacy activists, M&S also includes a full disclosure of what the RFID system does, and what it doesn't do. Such "preventative marketing" is sure to pay off in customer comfort with the new system.
Challenges & Takeaways
As far as takeaways from these presentations go, consider that all three of these vastly different companies have taken similarly incremental, well-planned, "piloted" approaches to implementation.
Kimberley-Clark's O'Shea stressed that management of change is absolutely vital, as is "getting the right people to recognize the scope of the change," both of which can help the technology get beyond the hype and into the business process. "RFID is the oldest emerging technology' out there," he said, noting that the adoption of standards and new developments will continue to drive RFID applications more into the mainstream.
Van Vliet stressed the importance of pre-planning every step of the process, especially in a case like FloraHolland where a 24-hour business day led the implementation team to have to "work around work." She is now looking at ways to extend the benefits of RFID implementation back to the grower and forward to the buyer.
Marks & Spencer's Stafford initially had an uphill battle persuading his people of the potential benefits of the pilot, but now that he's done it and seen real value, he had this simple advice for other businesses: "The way to get into the RFID business is to just get into it -- give it a try." He also reiterated the M&S mantra of "Accuracy through RFID provides availability of product, which drives better customer service, which drives better sales."
Siemens CEO: "Five Cent Barrier Broken"
In a keynote address, Dennis Sadlowski, CEO of German tech powerhouse Siemens Energy & Automation, also made some enlightening points concerning how the RFID marketplace may shake out in years to come.
"Right now, the leverage for an integrated RFID solution rests with the service providers," he noted in his presentation. "They have the domain expertise to tailor the technology to fit the demands of each situation." However, Sadowski foresees a reversal of the present state of affairs as the domain expertise of the solution providers is plugged back in to the product development process in order to get a fully integrated and readily accessible solution.
At its booth, Siemens also debuted a new, innovative type of RFID tag made of polymers -- polymer can carry a current, so in essence a polymer RFID chip could be roll-printable (like a magazine) which would bring costs down far lower than possible for silicon-based tags.
Finally, Sadlowski contended that RFID technology has long since broken what is known in the industry as the "five-cent barrier," when reuse rates of RFID tags are considered as part of the equation.
All speaker presentations can be downloaded at www.rfid-world.com/rfid07/ using the password rfidworld07pp
Intel's Entry Should Spur Growth
Another development indicative of the coming widespread adoption of RFID across the business spectrum was announced by tech industry heavyweight Intel, who debuted an "all-in-one" chip solution for readers. The new Intel R1000 transceiver takes about 90% of the components for an RFID reader and compresses them onto a single 8mm square chip. Such a significant move by such a major player is expected to cut the cost of RFID readers by more than half, enabling more producers and consumers to adopt RFID solutions.