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RFID Helps Manufacturer Sock Away 40% Productivity Gains

Gelal, the leading sock manufacturer in Europe, attributed a 40% improvement in factory productivity to a passive RFID system that replaced bar code scanning to track work-in-process. The company may expand RFID tracking to its packages to support warehouse and distribution operations.
Jun 04, 2008This article was originally published by RFID Update.

June 4, 2008—RFID gained a foothold in production tracking for Europe's largest sock maker, and proved so successful that the company plans to put RFID tags on its packaging to get a leg up on competition.

Replacing manual bar code scanning with RFID to track materials at production control points improved productivity by 40 percent at sock maker Gelal's factory in Istanbul, Turkey, according to an announcement released by Alien Technology. Alien provided the RFID system for Gelal, which produces 83 million pairs of socks per year (about 9,500 pairs per hour) and is a contract manufacturer for several leading international sportswear brands. Even though labor costs in Turkey are low, the RFID system has been cost effective because stationary RFID readers eliminate the need for some labor, Stephen Crocker, Alien's director of sales and channel management for the region, told RFID Update.

"The major savings are at control points between work stations," Crocker said. "Before, an employee was responsible for identifying totes containing work-in-process by scanning a bar code with a handheld scanner, which was time consuming. Now Gelal doesn't need to have a dedicated person at each control point."

Gen2 UHF passive RFID tags replaced bar code labels on 25,000 totes that are used to carry materials through the factory. Totes are loaded onto pallets, which are manually wheeled to different production stations. Previously, the bar codes were scanned each time the pallet moved from one station to another. Now the movements are recorded automatically with Alien ALR-8800 fixed-position readers.

RFID data updates Gelal's enterprise resource planning (ERP) system, which was developed by STS, the same Turkish system integrator that developed the RFID system. Gelal created its own RFID middleware for the system using Alien's application programming interface (API).

The productivity improvement the system provided has prompted Gelal to seek more ways to use RFID. Crocker expects the company to begin tagging cartons containing dozens of finished pairs of socks in the next 12 to 18 months.

"The expected improvement there is for warehouse operations and shortening delivery times to customers," Crocker said. "We've noticed a trend that many companies start out with a closed-loop system and migrate to item tagging."

Another trend Crocker cited is strong RFID adoption in the Mediterranean region, including Turkey, Portugal, Spain, and Greece. These countries traditionally have low labor costs, but RFID adoption in manufacturing has been strong nonetheless, Crocker said.

"Improved process control seems to be the driving force. RFID is also a marketing point, because it allows companies to provide more accuracy and better shipments for their customers," said Crocker. "Companies in the region are using RFID for competitive differentiation."

A report from market research and strategy firm Aberdeen Group released earlier this year found best-in-class manufacturers tend to use RFID for work-in-process tracking (see Aberdeen Announces "Winning RFID Strategies for 2008").

Southern Europe and the Mediterranean region are also home to some current, large item-level RFID systems. A book store in Portugal reportedly has the world's largest item-level retail RFID deployment (see World's Largest Item-Level RFID Application Launches), which was announced earlier this year. Last year a medical products distributor that serves Portugal, Spain, and Italy announced a high-volume item-level tracking system (see Med Distributor Converts to Gen2 for Item Tracking).
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