Dec 20, 2005This article was originally published by RFID Update.
December 20, 2005—There have been a slew of announcements related to item-level RFID tagging in the last week, the highlights of which are covered below.
Alliances
Symbol Technologies and startup RFID solutions provider Vue Technology last week announced an agreement by which the two companies will join forces to offer item-level RFID tagging implementation services to manufacturers and retailers. Vue will provide its flagship TrueVUE RFID Platform software, while Symbol will contribute hardware like fixed and handheld readers, tags, and peripheral devices. Vue Technology was acquired by a pair of VC firms from packaging giant MeadWestvaco in September (see our story) and has been carving out a niche for itself in item-level tracking. According to the release, "The joint item-level RFID solutions will expand the reach of RFID from traditional pallet and case-level distribution applications that focus on broad supply chain visibility to in-store applications which focus on achieving enhanced on-shelf availability -- and sales -- for specific product categories."
Selling Best Practices
Also last week, France's RFID systems and tag vendor Tagsys announced a methodology to assist in the deployment of end-to-end item-level RFID implementations. The company claims the methodology can allow an end-user to get from concept to realization in as little as three months. Called "P3: e-Xecute", the methodology is reportedly already being piloted by several large drug manufacturers but has application potential in fields as diverse as retail, fashion, and libraries. It is based on intellectual property and best practices developed by Tagsys.
Studies and Reports
Finally, there were two reports released around item-level tagging which both predicted benefits for constrained, store-level deployments. The first report drew on the results of a four-month study by the Voluntary Interindustry Commerce Standards Committee (VICS) and the American Apparel & Footwear Association (AAFA). It indicated that item-level tagging of apparel and footwear generates most benefits at the retail store level, not further upstream in the supply chain. Those store-level benefits can in fact be significant and quick, according to the findings. "The results of the white paper indicate clear benefits for RFID item-level tagging for the apparel and footwear value chain, especially at the store level," said AAFA's Vice President of Industry Relations Mary Howell in a statement. Furthermore, the store-level yields can serve to fund less profitable RFID deployment elsewhere in the supply chain. "No single upstream process can absorb the tag and infrastructure investment of RFID, but when combined with retail-level benefits, incremental costs can be offset by improvements in operational efficiencies, shipment and billing integrity, and brand margin performance."
The second report came from AMR Research and was the subject of yesterday's top story. AMR found that when targeted only at certain consumer goods categories like DVDs, video games, expensive apparel, cosmetics, and pharmaceuticals, item-level tagging can yield a whopping 50% improvement in stock availability. Furthermore, there can be a 15% to 20% savings win on the labor costs attributed to restocking and replenishment.
The Question
So, does this spurt of item-level tagging activity indicate a trend, or mere coincidence? Probably the former. Many companies deploying RFID have struggled to find business cases for the technology by experimenting with all kinds of applications and process reengineering. At the end of 2005, a year in which many end-users got their hands dirty with RFID, whatever successful practices now emerging from the field are likely earned from the hard work and trial-and-error of these new end-users desperately trying to reap benefits from the costly investment. Future end-users will likely emulate this hard-earned wisdom, and the practices will spread.
