New Applications for RFID

By Peter Hull

There’s an expression in the retail business called “shrinkage.” It’s not a term for clothing that gets smaller when washed. Rather, it refers to items that are lost, stolen, or misplaced in stores, warehouses, or during shipping.

All retailers have it, but it’s worse for some than others. It can be as high as 30 percent, and it represents items a company may never locate.

Retailer Uses RFID for Accuracy
The flip side of shrinkage is “accuracy.” At Los Angeles-based clothing manufacturer and retailer American Apparel, Zander Livingston began a quest nearly two years ago to drastically improve the company’s 80 percent accuracy, and thereby almost eliminate its shrinkage.

As the retailer’s RFID technology director, Livingston introduced a system whereby every item for sale in a store is individually tagged using Radio Frequency Identification, or RFID.

To improve his company’s accuracy, Livingston knew he needed to efficiently track every item in the store’s inventory. Two years later, with the technology operating in eight stores of American Apparel’s nationwide network, accuracy in those outlets is at nearly 99 percent, Livingston says.

Furthermore, the company has saved about 60 hours a week in labor costs in the participating stores by almost virtually eliminating hand-counting.

“It’s phenomenal,” Livingston says. “We have real-time replenishment reports running. With RFID tagging, when something is sold, we can replace it instantly.

“We can even tell when something’s displaced from its place on the sales floor,” he says.

Widespread Uses
While RFID has long been a mainstay for many industries, such as transportation, toll road systems, and access control, five years ago such a system may not have been possible for his application, Livingston says.

The out-of-the-box solutions — the hardware and software options available at the time — simply did not get the job done. But the technology caught up, and coupled with falling costs, RFID has become a must-have technology.

The move to the mainstream means the technology is taking on more widespread uses, from the consumer level to the operations and supply-chain levels, said Sam Liu, director of marketing for Santa Clara, Calif.�based Intelleflex, an RFID systems company.

Tracking in Real Time 
Most recently Liu’s company has seen positive results in the construction and cargo transportation sectors, and even in agriculture.
Intelleflex has developed RFID technology that allows growers to track their harvesters and container trucks in real time. They not only know exactly where a harvester is in the field, but how many potatoes are in the truck.

They can also track the transport of the crop from the field to processing plant.

“I don’t think the average customer thinks of RFID for their potato business, but when we talk about the capabilities of what they can do, they get very excited,” Liu says. “There’s an end-user demand there because they all want to improve operational efficiency.”
Similarly, the technology can be used to track trucks carrying cargo containers from port to port.

“It allows companies to optimize the check-in, check-out process of vehicles in and out of container yards,” Liu says.

GPS + RFID Opportunities
Marry RFID with a Global Positioning System, or GPS, and possibilities abound, says Bert Moore, communications director with AIM Global, a Warrendale, Penn.-based international trade association representing automatic identification and mobility technology providers.

In global shipping, for example, GPS is a useful tool when containers are at sea, but once in a cluttered area, such as a container yard, it’s RFID that can pinpoint a container’s exact location.

“An RFID reader can tell you exactly where it is in the stack, and that makes a big difference for port operations,” Moore says.
Back at American Apparel, Livingston expects individual item tagging will be introduced companywide.

From fast and accurate out-of-stock reports and ordering to improved loss prevention and customer satisfaction, the opportunities to improve efficiency are almost endless, Livingston said.

“It goes well beyond a better way to count,” he says. “It goes as deep as you want it to.”

In This Issue

New Items

Time for the Tough to Get Going

Supply Chain
Real Estate Responds to Supply Chain Shifts

Taking Your Ship to an IP Environment

Compliance Corner: SOPs, the Foundation of Trade Compliance

New Applications for RFID

Features
Gateway at a Glance ­� Canada

Moving Goods in a Slower Economy

Ports & infrastructure
National Gateway — a Public-Private Partnership in Progress

California River Ports

Port Products
Clean Air Equipment

Commentary
Contract Negotiations Approaching

Who, What, Where, When

Final Say