After successfully deploying radio frequency identification at its Memove retail chain, in Brazil, Valdac Global Brands (VGB) Group plans to begin implementing RFID at its two other clothing chains: Siberian and Crawford. The company expects to install the technology at approximately 120 stores throughout Brazil, starting at the end of this year.
The first Memove store was launched in October 2011. From the moment Memove opened its doors, VGB has been using RFID to track each of the retailer’s approximately 40,000 products, from the point of manufacture through the distribution center, to the store, onto the shelf and, finally, at the point of sale (see New Brazilian Fashion Chain Launches With RFID).
During Memove’s first months of operation, VGB Group measured a 50 percent drop in operating costs, thanks to the use of RFID. As goods are shipped, for example, the technology allows the store’s staff to verify the receipt of 3,000 to 4,000 items almost instantaneously—a task that would take hours (in some cases, days) to complete without the use of RFID.
The positive results that VGB achieved during its initial experience with RFID at its Memove stores led the firm to begin conducting studies to extend its use of the technology at its Siberian and Crawford chains. Planning is expected to take place throughout 2012, in order to enable the company to launch the first deployments by the end of this year.
VGB Group expects that the task of implementing RFID across its Siberian and Crawford chains will be more complicated than the Memove implementation. This is because the company’s network of Memove shops did not yet exist when the RFID project was conceived, so as VGB formulated Memove’s various business processes, it was a relatively simple task to incorporate the technology.
Therefore, according to Emerson Santangelo, VGB’s CIO, the company intends to initially conduct a thorough study of the processes in place at each store within Siberian’s and Crawford’s chains, and to deploy RFID at each new shop as it opens. Only after implementing the technology at its new stores, and gaining experience inherent in such a task, does VGB plan to gradually begin deploying the technology at its Siberian and Crawford sites already in operation.
“We work with a team of business analysts to adapt processes to new technology,” Santangelo says. “As for the new process, we are very confident, because I can see improvements. The first goal is to have this new process adopted by our manufacturers and distribution centers.”
The clothes sold by Valdac Global Brands are manufactured by companies selected for the fashion-design projects undertaken by their designers. “The manufacturers add all of the trims—labels and buttons, for example—and can also embed RFID tags on items of clothing,” Santangelo explains. “Practically nothing will change in the manufacture process.”
The biggest challenge for VGB Group has been adopting the RFID tags for pieces of jewelry, because the presence of metal can affect the ability to read those tags. “We are investigating other tags to solve the problem,” Santangelo states. VGB utilizes RFID tags made with Impinj‘s Monza 4 or 5 chips for clothes and jewelry. “We partnered with Haco for the production of labels.”
According to Santangelo, all tags are controlled by VGB Group, which sends the exact quantity of labels to each clothing supplier, based on the quantity of garments ordered. “As a contingency, we print labels with bar codes as well,” he says. Santangelo cites the importance of his company’s relationship with GS1Brasil in developing the Memove RFID project, as well as for future deployments.
Due to the progressive use of information technology within its stores, including new processes with RFID, VGB is strengthening its technology infrastructure as a whole, Santangelo says, including within its back office. “Due to the strong expansion of chain stores, with new units, we are upgrading our entire data center,” he reports.
“VGB Group believes that technology brings business benefits,” Santangelo states. “So the project was born with a vision that RFID technology should be planned to bring gains to the business. We have carried several analyses about what we can still improve with RFID—such as security, for example.”
Not every phase of the RFID implementation can be completed at the speed or cost that businesses expect, Santangelo notes, adding that enabling a project to proceed more quickly, for example, can drive up costs. “RFID, for Memove, has been a business differentiator,” he says. “This differentiator has given it an advantage over the competition.”
“We have a group of IT business analysts who work with ERP [enterprise resource planning],” Santangelo says. “When our ERP does not have a tool that we need, our people will develop and integrate it.”