Capmark Financial Group’s newly combined companies generated more than $1 billion in 2014 e-commerce sales.
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No companies have implemented the Infolink RFID system yet, though Gilbert says several companies are talking with Manhattan Associates about conducting pilots. Because Infolink is still in a test phase, Manhattan Associates declines to give a price. Gilbert says the cost will vary based on the number of suppliers and the number of transactions as well as the amount of information stored on the tag’s silicon chips.
Broad RFID usage is still a few years away, so analysts expect RFID to appear more in customized deployments designed to smooth out particular challenges that retailers face, such as speeding up the process by which shipments of products are checked in and warehoused. “They’ll pick a pain point to where RFID produces the best ROI,” says William Allen, marketing manager for Texas Instruments Radio Frequency Identification Systems, a division of Texas Instruments Inc.
At FigLeaves, the pain point was operating an efficient pick-and-pack system in its randomly filled warehouse. The e-retailer carries 108 brands and 18,000 SKUs, and sales have been surging, doubling for Christmas 2002 over the year before. Yet even with all that activity, the FigLeaves system of storing products randomly in its warehouse has proved to be highly effective, Nabarro says. “The only way we find anything in our warehouse is through complete computer-tracking of each item, so any SKU can be in any location,” he says. “Less than one pick fails per 1,000; it’s more like one per 5,000.”
To make it all work, FigLeaves has undertaken several initiatives that require communicating information to a database and then marrying that information with other information. For starters, FigLeaves scans the bar codes on all products as workers place them in bins. The scan reader reports the location of products to a database. FigLeaves also has placed RFID tags on totes, or plastic containers, that pickers use to fill orders from warehouse stock. The tags carry numbers that identify the totes.
When a customer places an order, the database links the order with the product location information. When the order is ready to be picked, the system assigns a tote number to the order. The database then reports via a computer on the tote trolley to pickers which products are in an order and where to find them in the warehouse. An employee picks an item from a bin and scans the bar code. The system identifies the correct compartment by reading the RFID tag, then activates a light on the compartment.
Before FigLeaves deployed RFID tags, warehouse employees would pick individual orders separately. Now, with RFID tags enabling the company to track each tote, pickers fill multiple orders simultaneously and accurately, Nabarro says. Each FigLeaves tote has eight compartments for different orders, and there are three totes on each trolley that pickers push through the warehouse. So each trolley has 24 orders to fill.
When the filled trolley arrives at the packing department, employees read information connected to each tote’s RFID tag to identify each order before packing and shipping it. A networked computer or handheld device pulls additional information about the order to create the packing slip and shipping label. Nabarro says the picking and packing systems are so easy to operate that new employees learn how to use them in minutes.
In the same way that FigLeaves uses RFID tags to identify totes, U.K.-based retailer Marks & Spencer is placing RFID tags made by Texas Instruments on more than 3 million trays used to deliver chilled foods to its grocery departments. The RFID tags are replacing bar codes because they are faster to scan, more durable and reusable, says Allen of Texas Instruments. The trays, which are delivered in batches of 24 on trolleys, can be scanned automatically all at once by passing through an RFID checkpoint, instead of being scanned individually and by hand when outfitted with bar codes.
Jim Evans, an RFID technology developer at RFID system provider Intermec Technologies Corp., says the Marks & Spencer project could become common in the grocery industry, where the need to track trays of fresh produce is critical due to sanitation requirements and the limited time within which fresh produce can be sold. “If a retailer gets a produce shipment too late, it may not be able to accept it,” he says.
Produce display trays are typically reused after being returned to a supplier, but only if retailers and their suppliers can verify they’ve been sanitized before being refilled. Verification can be time-consuming and difficult. But with production supervisors using handheld devices to record information about each tray, with identification based on the RFID tag, regarding when they were cleaned and when produce was picked and shipped, a retailer can see all that information when checking a shipment into a store. “So the retailer gets a traveling manifest of what’s in the shipment, where it came from, and when it was shipped,” Evans says.
Eventually, RFID proponents say retailers and their suppliers will place RFID tags on each product instead of just on containers. Nabarro of FigLeaves says placing RFID tags on each of his apparel products will make it easier and faster to scan each item when it’s stored as well as when it’s picked to fulfill an order. Unlike bar codes, which require a scanner to point right at them and nearly touch them, RFID tags can be read by simply waving a wand within three feet of a product, regardless of whether the tag is in view. When checking hundreds of products, that difference can save a huge amount of time, Nabarro says. Under his current system, even though the computer system tells a warehouse worker where to find ordered products, pickers must still scan the bar codes on individual products to enter their identifying information to the FigLeaves computer system.
But for FigLeaves and many other retailers, putting RFID tags on individual products will first require a reduction in the price of tags, which now cost FigLeaves about 35 cents each, Nabarro says. The price varies depending on the amount of information that’s stored on them; the more information, the larger the silicon chip, which drives up the cost.