May 13, 2013I asked Roger Blazek, Bloomingdale's VP of shortage control, to deliver the opening keynote at RFID Journal LIVE! 2013, because I believed our audience would benefit from hearing about the retailer's journey. Blazek and Pam Sweeney, the senior VP of logistics systems at parent company Macy's, understood early on the potential benefits of radio frequency identification. They took a measured, business-oriented approach to testing the technology, quantifying the potential benefits and planning a rollout.
During his keynote, Blazek said he first had to convince himself that the technology worked. Testing conducted at the University of Arkansas' RFID Research Center proved the tags could be read, but that was within a controlled environment. He told Bill Hardgrave, then the head of the facility, that he wasn't sure it would work within Bloomingdale's store environment. "I want to know if I pull the trigger, will it scan?" he asked. "And if it scans, will it pick up everything it's supposed to pick up?"
Bloomingdale's conducted six months' testing at its stores, because Blazek wanted to be sure the technology would support store processes before selling it to senior management. "I can tell you," he said, "there were many times when you went home thinking 'This is not going to work out. It is too much time and too much effort.'" But he also realized if they could make it work, the benefits would be enormous. Eventually, he became a believer, and senior management became more confident in the technology.
Bloomingdale's carried out its first pilot at its Soho, New York, store, in fall 2008. The pilot suggested that RFID could improve inventory accuracy by 27.2 percent and reduce cycle counting time by 96 percent. The results were documented by the RFID Research Center.
Blazek talked about the importance of change management. During that first pilot, store managers believed all the styles, colors and sizes of items being tracked were represented on the sales floor. The RFID data showed that while all the styles were on the floor, some of the colors and sizes were in the back room but not on the floor. "It took nine weeks, almost 10, to convince the store management [in Soho] that they needed to change," he said. This was no knock on the seasoned professionals there. It is the reality in retail today, and every retailer that deploys RFID will go through this process.
Blazek took the audience all the way through the Bloomingdale's journey and explained the steps that led Macy's and Bloomingdale's to decide to use RFID enterprise-wide. It's a fabulous presentation, and I encourage you to view it in our video library, even if you are not in retail (see Bloomingdale's Journey from RFID Concept to Rollout, Part 1, Part 2 and Part 3). But I think the important message he delivered was that early adopters did all the testing and worked with technology providers to improve the technology where it needed to be improved, and RFID is now ready for widespread use in retail.
Balaji Suresh, Carrier's materials manager for climate, controls and security, had a similar message, though the two companies are very different. Carrier is a major manufacturer of air conditioning and ventilation equipment. It deployed RFID within a high-speed factory environment that produces one unit every five seconds.
The company began investigating RFID in 2007, as a way to improve efficiencies at a 900,000-square-foot factory that was already highly efficient. Carrier also sought a solution that would improve processes. The company evaluated how mature the technology was, explored which solutions were available and examined the economics. In all three areas, Suresh and his team had concerns and decided the time was not right for RFID.
Two years later, Carrier revisited the RFID question. The first thing Suresh did was explore whether the original vision for using the technology to improve efficiencies was still valid. The answer was yes. As he researched RFID online, he grew more confident that the technology was maturing, and subsequent testing conducted within Carrier's facilities showed that tags could be read consistently and reliably. "We came out of that with an idea that, yes, we have seen enough to try to move this forward to the next phase," he stated.
The company launched a pilot in 2009, proving that 100 percent of the tags could be read, and that the RFID data could match the information in its enterprise applications. The next phase was to determine whether RFID could improve safety and efficiency in shipping, make some processes mistake-proof, streamline some assembly processes and build an infrastructure for future improvements.
The project was a success, and the next step was to determine the value of adding RFID to the production line and sell the vision to senior leadership. Suresh led the audience through the process of moving from pilot to rollout. I would encourage you, again, to watch the presentation (see How Carrier Made Excellent Manufacturing Even Better With RFID, Part 1, Part 2 and Part 3). The bottom line: Carrier invested hundreds of thousands of dollars in an RFID system, and will see a payback in less than two years. Productivity improved by 33 percent. Safety improved, and there was an 80 percent to 90 percent reduction in errors.
It is important to understand the rigorous processes that companies like Bloomingdale's and Carrier went through prior to deploying RFID in a significant way. Thanks to the extensive testing conducted by early adopters between 2007 and 2010, businesses deploying now do not need to determine whether RFID will work. Instead, they can focus on which system is best for them, which technology providers are the right ones and what the likely business benefits will be from using RFID. This makes it much easier for companies to invest in RFID, because they don't need to spend a lot of time and money answering the question: "Will it work?"
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.