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Canadian Grocery Pilot Finds ROI in RFID
The collaborative pilot began in May 2006 (see Canadian Retailer, Suppliers Begin RFID Trial), with research, installation and testing of RFID hardware and integration. By July 2006, says Shai Verma, IBM Canada's practice leader for RFID, the first products were fitted with RFID tags. IBM provided the program management, systems integration and hosting of the pilot, which was completed at the end of 2006.
Each of the four suppliers manually applied tags to at least two stock-keeping units (SKUs) at the case and pallet level, with a total of 10 SKUs tagged during the trial. Some tagged cases were destined for promotional displays in both stores as a pilot of RFID in promotional scenarios. The products were shipped to a retail distribution center, then forwarded to two retail stores. Tags were read by fixed readers at a supplier's factory or warehouse at the point of shipping, at the retail distribution center during receiving and shipping, and at the retail store during receiving, as well as upon movement to the sales floor. They were then interrogated one final time at a store's trash compactor.
The group focused on several SKUs, including canned food products, fresh and processed meat, dry goods and frozen foods. "We deliberately picked products that would have challenging read rates" with metal packaging and liquids, Verma explains.
Over the course of the pilot, Wilkes says, researchers were able to increase the read rate on all SKUs from 71 percent to 89 percent. They accomplished this through improving tag placement and the packing of cartons onto pallets.
The white paper will be available free to the public at the FCPC Web site, and is intended to provide a template for retailers and suppliers to understand how RFID could benefit their supply chain. Members of the two grocery associations will have access to a more detailed report.
According to Verma, the pilot "was not undertaken under the guise that RFID was the solution. There was no such hypothesis. Everybody, including the retailer, was there not to prove that dry goods moving slowly would have good read rates." Instead, Verma says, the participants designed real-life scenarios with items that posed challenges to RFID, and moved them quickly past interrogators.
The pilot was the second stage in the group's RFID efforts. Two years ago, several Canadian grocer organizations, together with IBM and global standards organization GS1 Canada, opened the RFID Centre in Toronto so retailers and suppliers could see RFID at work in a lab setting (see Canadian RFID Center Debuts).
The third stage, says Smith, will be in the hands of retailers and suppliers, who must educate themselves and begin planning their own RFID deployments.
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Each of the four suppliers manually applied tags to at least two stock-keeping units (SKUs) at the case and pallet level, with a total of 10 SKUs tagged during the trial. Some tagged cases were destined for promotional displays in both stores as a pilot of RFID in promotional scenarios. The products were shipped to a retail distribution center, then forwarded to two retail stores. Tags were read by fixed readers at a supplier's factory or warehouse at the point of shipping, at the retail distribution center during receiving and shipping, and at the retail store during receiving, as well as upon movement to the sales floor. They were then interrogated one final time at a store's trash compactor.
The group focused on several SKUs, including canned food products, fresh and processed meat, dry goods and frozen foods. "We deliberately picked products that would have challenging read rates" with metal packaging and liquids, Verma explains.
Over the course of the pilot, Wilkes says, researchers were able to increase the read rate on all SKUs from 71 percent to 89 percent. They accomplished this through improving tag placement and the packing of cartons onto pallets.
The white paper will be available free to the public at the FCPC Web site, and is intended to provide a template for retailers and suppliers to understand how RFID could benefit their supply chain. Members of the two grocery associations will have access to a more detailed report.
According to Verma, the pilot "was not undertaken under the guise that RFID was the solution. There was no such hypothesis. Everybody, including the retailer, was there not to prove that dry goods moving slowly would have good read rates." Instead, Verma says, the participants designed real-life scenarios with items that posed challenges to RFID, and moved them quickly past interrogators.
The pilot was the second stage in the group's RFID efforts. Two years ago, several Canadian grocer organizations, together with IBM and global standards organization GS1 Canada, opened the RFID Centre in Toronto so retailers and suppliers could see RFID at work in a lab setting (see Canadian RFID Center Debuts).
The third stage, says Smith, will be in the hands of retailers and suppliers, who must educate themselves and begin planning their own RFID deployments.
