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Italian Retail Pilot Quantifies RFID's Many Benefits

The participants, which include ham-maker Parmacotto and supermarket operator Auchon, tracked tagged cases of food as they moved from production to sales floor.
By Rhea Wessel
Oct 27, 2008A large-scale Italian pilot project organized by the University of Parma's RFID Lab has quantified the benefits of using RFID tags to identify and track 12,000 cases and 800 pallets of sliced ham, sandwiches and other fresh food as the goods moved from production to the retail sales floor between May and September.

The RFID technology was based on EPCglobal standards, and the pilot was run in parallel to—and compared with—existing bar-code-based processes. Among the results, the pilot showed a 68 percent reduction in the time required to check the quantity and mix of goods as they were shipped from the manufacturer's warehouse, an 80 percent reduction in the time necessary to receive the products at the retailer's distribution center and a 30 percent reduction in the so-called safety stock required.

To monitor the shelf replenishment process, an RFID reader was installed in the hall connecting the store's back room with the shop floor.

The group began planning the pilot in 2007 (see Parma's RFID Lab Plans Pork Pilot). The results of that pilot were announced at a conference in Italy in early October by Antonio Rizzi, a full professor of industrial logistics and supply chain management at the University of Parma. Rizzi is also the founder and head of the RFID Lab, and the pilot's director.

Fast-moving consumer goods (FMCG) partners in the project included Auchan, which operates a chain of supermarkets in Italy, and Parmacotto, a manufacturer of ham, salami and other processed meats. Other FMCG participants included Carapelli, Chiesi, Corriere Cecchi, Conad, Danone, Grandi Salumifici Italiani, Goglio, Nestlé, Number 1, Lavazza and Parmalat. Technology partners were Avery Dennison, Caen RFID, Impinj, Intermec, Jamison Doors, Motorola, Oracle, Psion Teklogix, Siemens, Toshiba TEC and UPM Raflatac, as well as Id-Solutions, a spinoff of the University of Parma. All participants agreed to share the pilot's costs, as well as its results.

Rizzi separated the pilot results into two categories: technological and managerial. As goods moved from Parmacotto's logistics base to Auchan's distribution center (DC) and two of its stores, the case and pallet tags were read at various points. At Parmacotto's warehouse, UPM Raflatac and Avery Dennison RFID tags were encoded with 96-bit Electronic Product Codes (EPCs) incorporating serialized global trade item numbers (SGTINs) and attached to cases of goods. The cases were then loaded onto a pallet that was fitted with a tag encoded with a 96-bit EPC containing a serial shipping container code (SSCC), and the case and pallet tags were read. The second read point was at the shipping door, when the pallet and cases passed through the RFID portal and were loaded onto a truck. At that point, the order was checked for accuracy, using the RFID data to compare the actual goods on the pallet with the information on the bill of lading.

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