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Pacific Coast Producers Works Through Challenges to Realize Benefits

By studying the RFID data it receives from Wal-Mart, the canned goods supplier has reduced out-of-stocks by 50 percent and boosted sell-through rates for the promoted products.
By Mary Catherine O'Connor
Oct 21, 2008Peter Wtulich and Jim Farmer, the CIO and director of distribution operations, respectively, of Pacific Coast Producers, expected that it would not be easy for their company to meet Wal-Mart's RFID mandate. "We have a horrible [RFID] tagging environment," Wtulich told attendees at last week's EPC Connection 2008 conference in Chicago, describing the $450 million California-based private-label packer of canned fruits and tomatoes. "It contains liquid, metal, large magnets [which can interfere with RF signals]," he explained. "So the first year, it was just ugly—like a 60-ton locomotive coming at us."

But by starting early and devoting resources to the project—which included setting up a closed-loop conveyor belt to determine the optimal tag type, label placement, RFID interrogator model and antenna placement for reading tags adhered to cases of its canned products—the company succeeded in meeting its 2006 tagging deadline. Eventually, Wtulich says, the company began reaping internal business benefits from its use of the technology.

Peter Wtulich
Initially, the firm tested EPC Gen 1 inlays, which performed poorly, given the inhospitable environment. "Our initial read rates were 33 percent," Wtulich says. By determining the optimal tag placement on the cases, and by tweaking the reader antenna placement on the conveyors, the company boosted the read rate to the low 90s percentile. But this shot up to 99.7 percent with the use of EPC Gen 2 tags, he notes, which perform much better than the first-generation tags. "Now, we get 99.7 percent [successful] reads, but we ship with 100 percent [readability] by using a verification system," he says.

When describing how his company approached meeting the mandate, Wtulich said Pacific Coast Producers knew immediately that taking a slap-and-ship approach—that is, manually diverting shipments requiring RFID tags and applying them manually, by hand, rather than automating and integrating the process into its business—would be neither cost-effective nor scalable.

Instead, Pacific Coast Producers integrated the tagging process into its existing business steps. Originally, the company tagged only two stock-keeping units (SKUs)—and of those, only the ones bound for two Wal-Mart distribution centers. It has since increased that number to four SKUs bound for four DCs.

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