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Shaw Industries Rolls Out the Red Carpet for RFID

Rug manufacturer Shaw Industries is going well beyond its Wal-Mart compliance requirements with a 37-facility expansion of its existing RFID pilot. Shaw says the system will provide strong ROI by increasing shipment accuracy, enabling better customer service, improving supply chain visibility, and shortening lead times.
Mar 15, 2007This article was originally published by RFID Update.

March 15, 2007—Shaw Industries Group, the world's largest supplier of carpets and rugs, is deploying passive RFID technology at 40 U.S. facilities to improve internal product tracking and supply chain visibility. The flooring manufacturer has already successfully met its Wal-Mart compliance tagging requirement and is now significantly expanding its three-facility RFID pilot across 37 additional facilities in order to produce more internal benefits and return on investment (ROI).

"This is a significant project because Shaw is moving beyond compliance to ROI-based RFID. It's really being done to improve the business," Kevin MacDonald, vice president of client architecture at ODIN technologies, told RFID Update. Having previously selected ODIN to implement the three-facility pilot project that proved the business case, Shaw has now contracted ODIN to complete the 37-facility implementation over the next two months.

While Shaw Industries has expressed confidence in the ROI its RFID system will produce, it has not provided many details. "Our proof-of-concept implementation confirmed our contention that an accurate RFID infrastructure can improve supply chain visibility," Jim Nielsen, Shaw's manager of technology planning, is quoted in ODIN's announcement. MacDonald told RFID Update that Shaw wants to keep its ROI figures and performance metrics confidential. However MacDonald did say Shaw identified the areas that provided ROI: improved shipment accuracy, shorter lead times, better customer service, and more efficient response to customer inquiries about order status and location.

Shaw is not actually tagging its flooring products at all but the paper bill of lading (BoL) for each shipment. As a truck hauling a shipment exits one of the main distribution centers, the driver hands the tagged BoL to the guard at the guard station for validation, and the BoL's tag is read. At the shipment's destination at a regional distribution center, a reader is positioned within a foot of the BoL drop box. When the driver drops the BoL in the box, the tag is read, recording the fact that the shipment has arrived.

"The system enables Shaw to give its customers a FedEx-like tracking number when they call to check the status of an order," MacDonald said. "It also gives them visibility for shipments between their facilities."

ODIN's EasyReader software will be used at all facilities to assist in the system setup and deployment. ODIN will install and configure all the RFID equipment, which includes Intermec IF5 readers along with Alien Gen2 squiggle inlays converted into 4x6-inch tags by NCR. The EasyReader software can be bundled directly on the Intermec readers to simplify configuration, and the readers also can provide middleware-like data processing functions.

"It was too costly for Shaw to deploy a server at each site, so they needed an embedded solution with readers that could interface directly with their legacy systems and applications," explained MacDonald, asserting, "ROI is only possible if companies have a scalable RFID system that can be deployed quickly."

MacDonald said the experience ODIN gained from managing wide-scale RFID implementations for the U.S. Department of Defense was very helpful in working with Shaw and was a reason the company was selected for the project. (For more on the DoD deployment, see ODIN Wins $7m RFID Contract from DoD and RFID Deployment at DoD Completes First Phase.)

Shaw's limited disclosure of ROI details will leave some eager to know more about the value of the system, but suffice it to say that the scope of the project and the aggressive rollout schedule seem to validate the company's claim that there is a strong business case for using RFID. Shaw's project is also representative of the results of a recent ChainLink Research study that found that internal applications are a bigger driver of RFID implementation than compliance requirements (see More Manufacturers Use RFID to Improve Than Comply).
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