Manor's RFID Deployment Expected to Yield Quick ROI

By Rhea Wessel

Sept. 26, 2008—Manor, Switzerland's largest retail chain, says the RFID system it is rolling out should increase inventory visibility, cut labor costs and shorten replenishment cycles. The company is currently using the system, which became operational a week ago, to automate the processing of goods at two distribution centers and speed up the receipt of goods at five of its 80 stores.

Rodata, the Swiss company that is integrating the application, says Manor is using about 140,000 EPC Gen 2 tags attached to reusable plastic crates and 1 million tags attached to disposable cardboard boxes each year, in one of the largest RFID rollouts in the country.

George Rosenberger, the CEO of Rodata, says that reduced shrinkage alone could cover the cost of the application in a short period of time.

At a Manor’s DC in Möhlin, a pallet's contents is recorded automatically by an RFID reader installed at the stretch-wrapping station.

The retailer began implementing the RFID system in mid August and has placed two bar-coded labels that contain embedded RFID tags made by RF Identics on the ends of 70,000 reusable plastic containers, which measure roughly 60 by 40 by 40 centimeters. Each container carries two tags encoded with the same ID number and attached to opposite ends of the container so that workers that still need to need to read the bar codes can find them easily.

Cardboard boxes filled with goods arrive at Manor's DCs—one in Hochdorf, the other in Möhlin—where sorting machines read the boxes' bar-coded labels and, a based on that data, assign the boxes to pallets or dollies designated for specific stores. About 350,000 cardboard boxes arrive from China each year already carrying EPC Gen 2 RFID tags embedded in the bar-coded labels. These tags are applied by two third-party logistics hubs that Manor uses in the Far East. If boxes arrive without an RFID bar-code label, Manor tags the boxes in Switzerland.

In the next step, workers commission some goods using a pick-by-voice system. For example, workers put small quantities of individual items, such as perfume, into tagged containers that are then sorted by the machine. Even though only five of Manor's 80 retail stores currently have the ability to read the RFID tags on the boxes and containers, Manor is already RFID tagging each box and container that holds general merchandise or apparel.

Once boxes have been sorted and commissioning is finished, workers stack 10 to 20 different boxes and/or containers on a pallet or dolly and then create a list of the goods before the pallet is stretch-wrapped or the goods on the dolly are bound with a plastic strap. In the past, workers had to scan the bar codes of each box or container on a pallet and each box or container on a dolly to create the list. Now, with RFID, the contents of a pallet or dolly are recorded automatically by an RFID reader installed at the stretch-wrapper or binding machine. The information collected via RFID—that is, the tag ID numbers of the containers and boxes—allows Manor to confirm in its information systems that a pallet or dolly holds the right goods for a specific store.