Dec 24, 2007Reliance Retail, one of India's largest retailers, has been testing RFID technology and is preparing applications for use at a large number of its hypermarkets and supermarkets, as well as its electronics and convenience stores. The company has already equipped these stores with data ports and wireless computer networks able to support RFID systems.
"We are RFID-ready. We just need to plug and play," says Rajan Luthra, VP of Reliance Retail, which is part of the Reliance Industries Ltd. conglomerate, India's largest and only private Fortune 500 company, with reported sales of $27 billion in fiscal year 2007.
Luthra says the organized retail market—which does not include India's 12 million mom-and-pop stores—is growing at a rate of around 35 percent a year. The market is presently estimated to be worth more than $300 billion, and is set to grow to $427 billion in 2010 and $637 billion by 2015. India's infrastructure, however, has not kept up with the country's recent economic boom, making RFID applications in India seem more like a luxury rather than a necessary means of refining processes.
Nonetheless, Luthra believes Reliance Retail can benefit from the technology, despite such fundamental logistics and operating challenges as slow and unreliable deliveries from suppliers, a lack of large third-party logistics providers and a generally disorganized supply chain. The lack of infrastructure can even be an advantage when implementing the most advanced technology solutions, Luthra says. "Starting from scratch is easier than converting legacy systems."
As a member of an industrial conglomerate, Reliance Retail has always been focused on detailing business processes at an activity and a task level, then measuring compliance to those processes across the large geographic spread. For instance, Luthra says he considers RFID an ideal tool for ensuring adherence to retail processes and monitoring activities in stores. Reliance Retail, he adds, is committed to driving process compliance even though many of its associates have little experience, do not come from a retail background and tend to maintain low productivity levels.
"With RFID, we can drive process compliance on a near real-time basis," Luthra states. For example, if the defined time to completely unload a truck full of fruits and vegetable crates is X minutes, then RFID tags on the crates read at the material entry door can enable measurement of this key performance indicator (KPI).
In 1999, Reliance Industries implemented what it describes as India's first RFID-based, enterprise-wide smart card system. Applications included attendance recording, access control, tea and coffee vending machine services and an e-purse, as well as biometric security features. The system was implemented across Reliance Industries' entire group of companies.
Reliance Retail has drawn up plans for using RFID to support its operations. The company has developed five RFID-deployment scenarios, including the tracking of reusable crates of fresh food; item- and case-level tracking of high-value goods; and pallet and case tagging of various goods.
Reliance has performed proof-of-concept tests using passive EPC Gen 2 UHF RFID tags to track crates of fresh foods and cases of high-value goods. The company managed to achieve above 90 percent read rates and found that RFID helped it reduce shipping and receiving errors while increasing productivity. For the test to track individual items and cases of high-value goods, Reliance Retail has recently conducted a pilot between one distribution center and one Reliance Digital store. This pilot is still under evaluation. Reliance is now working with various RFID hardware and tag suppliers to obtain improved read rates for the tracking of fresh-food crates, as well as planning a permanent rollout of other scenarios upon successful completion of the pilots.
