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Charles Voegele Group Finds RFID Helps It Stay Competitive

Switzerland's largest clothing retailer says that despite the economic recession, the best time for retailers and product suppliers to invest in RFID technology is now.
By Claire Swedberg
Apr 29, 2009Charles Vögele Group, the largest clothing retailer in Switzerland, finds that using RFID technology has helped it illuminate what it calls the "black holes" in its supply chain, while also reducing stock-outs and the amount of time spent counting inventory by 50 percent, according to Thomas Beckmann, the company's head of supply chain. At RFID Journal LIVE! 2009, being held this week in Orlando, Fla., Beckmann described the retailer's progress with RFID to track its products from factory to store. Despite the economic recession, he indicated, the best time for an investment in RFID technology by retailers or other members of the supply chain could be now.

Beckmann, as well as other keynote speakers at the RFID Journal LIVE! conference, focused on how their companies have benefited from RFID during economic hard times. Total attendance at the event reached 2,400, consisting of users and potential users of radio frequency identification, as well as RFID technology vendors.

The system went live in 2008 following two years of development and piloting, Beckmann told a packed auditorium at the event. By using RFID, the company was able to achieve a 50 percent reduction in inventory-related labor, as well as gain visibility into weak points in the supply chain, from eight factories in Shanghai to four stores in Slovenia.

Charles Vögele sells fashion products at 851 stores throughout Europe, including Switzerland, as well as Poland, Germany and the Czech Republic, with 7,800 employees, and reported annual earnings of 1.5 billion Swiss francs ($1.3 billion). Because it has a relatively complex supply chain—with products manufactured in Asia and passing through several distribution centers before arriving at one of those stores—the company sought greater visibility of its products.

Even before the RFID installation, Vögele had focused on visibility in the supply chain. The company employs a team of quality inspectors who examine products at the manufacturer and report the results to the retailer before the items are shipped, in addition to a supply chain team that oversees whether products meet their delivery dates. From the manufacturing site, Beckmann told those in attendance, products travel to one of 34 freight stations. There, deliveries are sorted and consolidated, then forwarded via ship or plane to the company's European hub in Germany, where inspectors conduct quality inspection once more, before the products are shipped to stores. While the largely paper-based system was extensive, providing the firm with much of the supply chain details, the company found gaps in the data flow—which it dubbed "black holes."

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