- Allowing Eight to 12 Weeks for Testing
- Focusing on the Simplest Applications First
- Eight Key Steps to Piloting Success
Although adoption of a radio frequency identification (RFID) solution has become faster and more straightforward than it was just a decade ago, every deployment comes with its own unique challenges. Cloud-based systems and interoperable RFID hardware have made installations faster than they used to be, while every company still has its own applications and goals that need to be considered before the first reader can be deployed. That means, in most cases, that brands and retailers start by testing the technology out. Some deployments never make it past the pilot, and that can be a statement on the pilot planning process.
Umesh Cooduvalli
RFID adoption rates are growing. Major retailers such as Walmart are already using the technology and are issuing mandates to suppliers to tag their goods at the point of manufacture. Those tags are often being read throughout the supply chain en route to stores, and then from back rooms to sales floors. But pilots are not taking place so much to prove the technology can properly capture data, but for a variety of other reasons, according to Umesh Cooduvalli, Detego‘s VP of sales.
Detego provides RFID inventory-management software for sports and fashion brands using its RFID Factory, DC-Warehouse, and Store solutions. The role of a pilot is to help customize the best approach for each user. Pilots lay the foundation for a proper rollout of a solution for an entire enterprise, Cooduvalli explains, and companies can learn which use cases will be beneficial, which may not be, what will bring the earliest return on investment, and thus where and how to launch first.
Allowing Eight to 12 Weeks for Testing
A pilot also provides an opportunity to create RFID champions within a company early on, Cooduvalli says—people who can help roll out the solution. Such champions can focus on the key areas needed to make RFID technology use work. For instance, they can create best-practice change management and enable application programming interface integrations to the existing system. They can also help to design proper workflows for cycle counting, replenishments, warehouse RFID use cases and the enabling of source tagging,
Detego recommends scheduling two to three months for a pilot to be carried out. Within the first few weeks of a pilot, retailers can often learn what kinds of gaps they have in inventory accuracy when real inventory counts are compared to their enterprise resource planning (ERP) systems. That means, in most cases, that retailers first focus a pilot on stock accuracy to close gaps in stock shortages, as well as reduce the need for surpluses and eliminate out-of-stocks.
In most cases, Cooduvalli says, once stock accuracy is accomplished during a pilot, RFID can typically provide more than 98 percent item-level inventory accuracy, resulting in a sales lift fairly quickly. “Retailers see anywhere from 5 percent to 15 percent sales uplift after the rollout,” he reports, “and overall inventory reduction of nearly 10 percent.” During most pilots, not only can sales be lifted at the site being tested, but sales numbers can be compared against other stores not using RFID for reference.
Focusing on the Simplest Applications First
Keeping it simple will make it easier to move to a permanent deployment. It may be advisable to undertake a cloud-based, software-as-a-service system to avoid customization of software, and ultimately to speed up an implementation. An early adoption focus might be on eliminating manual cycle counts for audit purposes, which typically results in significant cost savings for a company.
The savings on ending this yearly process can be as much as $10,000 per store location, Cooduvalli predicts. “With RFID, we typically see 26 times more efficiency than manual counting,” he says. “Retailers also learn how often to do the cycle counts for their business,” once a day or two to three times a week. With RFID, Cooduvalli adds, cycle counting can usually be completed within 20 minutes for 40,000 items in a store, using only two mobile devices.
During a typical two- to three-month pilot, a company can expect to improve its stock accuracy, comparing RFID-scanned results to what the ERP system shows for each location, once the tags are attached to merchandise and are being interrogated by employees. Companies should watch for differences in shortages and surpluses, as well as monitor out-of-stocks and confirm that they can replenish the sales floor for planogram compliance faster and more efficiently. “These are the key measurements compared to previous results [without RFID],” Cooduvalli states.
Eight Key Steps to Piloting Success
Cooduvalli cites eight steps that typically help businesses achieve such results during a pilot:
- Step 1: Establish a steering committee within the company, with a cross-functional team that could work with a technology solution provider to share insights related to the needs and goals of each team member.
- Step 2: Project managers should then establish the software solution provider as the key project manager to determine milestones and provide support throughout the piloting process.
- Step 3: Consider the IT infrastructure. This means product master files and target files must be provided in proper formats, with network access and proper mobile device management, so that data is easily accessible.
- Step 4: Focus on store operations and decide where the pilot will take place, who the store managers and champions will be, and who will conduct day-to-day pilot functions. Training the entire team who will participate in go-live at the first store with the tagging process is important. This should be done at least a week before the pilot launches.
- Step 5: Carry out warehouse operations, with team members ensuring that the staff are replenishing the pilot stores with tagged goods, based on the requirements of the piloted RFID system. The goal is to establish compliance so that any items shipping to pilot stores are already RFID-tagged from the distribution center, or in a store’s back room.
- Step 6: Once the pilot details have been decided, a team must select the most appropriate RFID tags and plan for the actual tagging, or work with suppliers to tag the products at source. This step assumes that a retailer does not already receive its good with RFID tags applied.
- Step 7: Assign a hardware team who will prepare for the use of handheld RFID devices for the tagging process. Typically, more than 10 employees are required at a single site, Cooduvalli says. Additionally, having the right number of handheld devices is crucial. “I recommend 10 devices with 20 people to tag up a store with 30,000 items,” he adds. Having extra batteries available to swap out in the event that a reader loses power is a good idea.
- Step 8: Put the system to use. Managers should plan to regularly meet with the cross-functional team to discuss each value stream, and monitor progress, or identify problems and be ready to work with the solution provider to modify.
If things go wrong, Cooduvalli says, or if the technology fails to meet expectations, it is often the result of partners and stakeholders not participating from the beginning of the project. That, he adds, is why “Clear roles and responsibilities should be laid out in supplying RFID tags, hardware and software,” and why Detego typically brings all parties together from the beginning of a project to ensure success.
It’s vital that sufficient RFID tag quantities be available for the pilot period at the store locations, Cooduvalli notes. Getting IT involved for mobile device management, as well as staging the handheld devices with proper apps and testing, will help to prevent errors. Companies should provide secure file-transfer protocol credentials to the IT team for product data, while testing automatic transfers is also important. Piloting will continue to be the first phase of rollout for most RFID solutions, he says—not to prove the technology works, but to plan how it can provide the best benefits for a company.