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RFID Targets Gray Market in Europe

Italian clothing designer G&P Net uses RFID to track its garment inventory, helping it identify and eliminate the source of gray market sales.
By Claire Swedberg
According to Azzali, the system was first piloted at one distribution center to prove the technology worked properly. The company had a very short time frame for deploying the system, he says, because it wanted the deployment to be in place before it began shipping its fall fashions. The firm tested the technology for one month, at the end of 2007, using several RFID tags and readers available in Europe, determining which tags and tag placements made the reads most reliable.

G&P Net's CIO, Luca Isidori
Because Alien tags were not being sold in Europe at that time, Azzali says, Aton initially chose another tag manufacturer, until the Alien tags became available. "We had tried several tags with poor results," he says, "but the Alien 2-inch tags were not yet available, so the first 10,000 tags we used were provided by another manufacturer."

After the pilot, Aton spent approximately two months deploying the system in the four DCs, as well as providing tags to all manufacturing sites. The system utilizes Aton's onID middleware, which routes data from the readers to the back-end system. "They needed everything done very quickly," Azzali notes. "The company is growing at a rate of 30 to 35 percent each year, and the need for speed was incredible." To have garments available in the stores for the fall season, he explains, the products needed to begin shipping by mid 2008. The system was fully operational by March of last year.

Otello Azzali, Aton's vice president
The only challenges when deploying the system, Azzali says, involved limiting the interrogators' range to ensure they do not read the incorrect tags, and training the distribution center's staff. He adds that Aton helped "educate the users in a correct utilization of the new system—not to leave clothes in the vicinity of a reading gate, and so on. These are normal tunings of an RFID process; the application of them in the G&P instance didn't create any peculiar issues."

Now, the RFID system can not only assist with reducing gray market crime, but also help the company track its own shipping cycles and collect updated information regarding which products have been shipped, to whom and when.

The system has been working well since its installation, says G&P Net's CIO, Luca Isidori. "We are very satisfied," he states. "We observe a great time-saving in inventory management, as well as in logistics operations, and we have adequate control of our distribution channels."

The protection from gray-market sales and the improved inventory and logistics management have already paid for the technology, Isidori indicates. "The return on investment happened already," he says. "From now on, the system evolution will produce more and more profits."

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