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Fashion Group Expects Positive ROI Within 3 Years
The study, carried out by the University of Parma's RFID Lab and backed by major European garment manufacturers, sees payback coming mainly from a reduction in labor and increased sales.
Apr 24, 2009—After testing a business case that uses RFID in 15 logistical and in-store processes in a replicated fashion retail store and distribution center (DC), the University of Parma's RFID Lab has determined that it could take as little as three years to achieve a positive return on investment (ROI). The calculated payback was based on an estimated time-savings of approximately 80 percent for RFID-based processes compared with manual processes, as well as higher sales revenue due to reduced stock-outs.
The replicated fashion retail store and DC were built at the Parma lab as a separate, related project to serve as a demonstration environment for testing RFID in fashion retail. The business-case test, which launched in June 2008 (see Italian RFID Lab Gets Fashion-Forward) and ended in December 2008, was overseen by the lab's Fashion Board of Advisors, a committee of 13 companies that includes Dolce & Gabbana and IMAX—Max Mara Fashion Group. The board is led by Roberto Montanari, a University of Parma professor who directed the test, which focused on processes starting at the end of the manufacturing line for fashion articles, and ending with the flow of returned goods. The project employed case- and pallet-level tagging, and the business case was based on item-level tagging scenarios, says Antonio Rizzi, the RFID Lab's director and a full professor of industrial logistics and supply chain management at the university's department of industrial engineering.
The project's partners worked together in three phases, the first of which involved research into retailers' existing logistical processes—an "as is" analysis. In this phase, researchers examined eight processes in six DCs, and seven processes at five retail stores. The second phase focused on developing new scenarios utilizing EPC Gen 2-based RFID technology to optimize processes. Specifically, the partners designed RFID hardware and software infrastructure around RFID-based processes.
The researchers designed and tested various RFID-based processes, such as picking and shipping at the DC, as well as receiving, inventory, anti-theft measures, marketing and customer service at the retail store. The processes work with software designed and integrated by Id-Solutions, a University of Parma spin-off, and based on Microsoft BizTalk RFID, and hardware from various technology partners for the project. ADT provided an RFID smart shelf that can identify tagged clothing items, in addition to an anti-theft system that integrates traditional magneto-acoustic technology with RFID. Jamison Doors' Industrial Portals division provided a Gnome RFID portal, which was used to develop an antitheft gate. Mojix installed its system, consisting of a STAR receiver and six eNodes which cover the entire area of the RFID Fashion Store for managing inventory and locating items in real time using passive RFID tags.
Tracient Technologies provided its Padl-R UHF RFID handheld RFID interrogator to perform manual tag reads, while Avery Dennison, Lab ID and UPM Raflatac supplied the RFID inlays and tags used to identify clothing items within the RFID Fashion Store. Label Store Industries and SML provided a set of tags (composition labels, cardboard tags and fabric labels) specifically developed for use in the textile industry.
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