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Levi's Manages Stock at Nearly 100 Percent Accuracy

Store inventory counts, which were accomplished annually and took 12 hours to complete with 10 employees, can now be carried out using RFID tags once a month, requiring only three hours for two workers.
By Edson Perin
Jun 30, 2019

The use of radio frequency identification by the Brazilian subsidiary of Levi's, an American brand of jeans, shirts, belts, caps and footwear, has already become an international success story. Thanks to RFID, Levi's Brazil controls the inventory of products at its own stores, with practically 100 percent accuracy. The project, which has achieved positive results from the beginning of the operation via smart tags, was launched during the second half of 2017.

When an order is separated at the company's distribution center, each pallet is moved to the area responsible for RFID tagging. The boxes pass through a reader portal to confirm 100 percent accuracy, and when they arrive at the store, the retailer reads all of the items via an RFID reader. In the store, the receipt of 2,000 items takes an average of only four minutes. "We had in-store stock inventory at approximately 67 percent [before RFID]," said Rui Araújo Silva, the general director of Levi's in Brazil. "After 18 months of RFID use, that number rose to 99.78 percent."

Levi's Brazil decided to test the RFID solution initially at 16 of its own stores, out of a total of 78 outlets throughout the country. The decision was made due to the same enterprise resource planning (ERP) solution being used at these establishments, since the other 62 stores that sell the company's products utilize 12 different ERP systems. The store inventory count, which was previously performed once annually, requiring 12 hours for 10 employees, could now be carried out with RFID tags once a month, by only two workers within around three hours.

The RFID implementation at Levi's Brazil follows GS1's passive EPC UHF standard, generated from the UPC code standardized by Levi's International, which is used both in Brazilian branches and by foreign partners. "The advantage is that by reading the code, doing the reverse conversion, any branch of the company can understand that it is the global UPC, with which they are already accustomed to working," says Sérgio Gambim, the CEO of iTag, the company responsible for the RFID implementation at the multinational company.

The first test of the solution occurred during the Black Friday weekend of 2017, when the company achieved a 56 percent increase in sales compared to the year prior. This result was due to several factors, Silva says, including the use of RFID. "We cannot say that the good result was all thanks to RFID," he admits, "but we know that technology was very important in achieving this first positive performance after its implementation."

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