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New Balance Taking First Steps With RFID
The athletic shoe and apparel company's initial technology tests went well; now, the firm is planning a pilot.
Aug 23, 2006—If there's one thing all RFID technology vendors and integrators agree on, it's that before you can determine where and how to use RFID, you must first experiment with it. Many large footwear and apparel companies, however, are too busy trying to meet retailers' tagging mandates to deploy small-scale technology trials or to take a slow, studied approach to the technology.
Not so for New Balance, a privately held running shoe and sports apparel company headquartered in Boston. Although its shoes may be a household name, none of the big-box retailers with RFID mandates sell New Balance products. New Balance manufactures its shoes in the United States and overseas, sourcing its apparel from overseas manufacturers. Curious about whether RFID could prove valuable to the firm, the company conducted a small technology trial last year. The results were positive enough to convince New Balance to run a second trial focusing on integrating RFID tag data with existing business systems.
New Balance started experimenting with RFID last summer, working with Avery Dennison Retail Information Services, the company from which it sources the bar-code product labels it applies to its products. Avery Dennison runs an RFID testing center outside Atlanta. Frank Cornelius, advanced manufacturing engineer in New Balance's Advanced Engineering department, was sending cases full of tagged New Balance apparel to the center throughout last summer.
Initial tests with EPC Class 0 and Class 1 tags gave poor readability, with as few as 80 percent of the tagged goods in cases being read. These rates, however, shot up to around 95 percent once Cornelius started applying EPC Gen 2 tags to the garments in early 2006. The company decided to base the RFID technology trial on a real business process in need of improvement: its method of distributing product samples to its sales force.
Before retail stores place orders for New Balance apparel—which they do twice yearly—New Balance sales representatives show them the upcoming season's line. For these demonstrations, the company sends samples of each color, in each style. Workers at a third-party distribution center in California compile the sample collections and ship them out to roughly 100 New Balance sales reps around the country.
To do this, they must first process receipt of approximately 15,000 individual pieces, from which they pull each style in each color and sort them into the sample collections. This is a manual, time-consuming process that involves opening each case, counting the contents and comparing them with a corresponding packing slip—and in one out of 10 cases, the distribution center told New Balance, the contents indicated by packing slip doesn't match the actual contents of the box.
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