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Walking the Talk

Early adopters of EPC technology are showing there are benefits to be gained by both manufacturers and retailers.
By Mike Meranda
Oct 01, 2005—Albert Camus, the French philosopher and author, once said, "You cannot create experience. You must undergo it." The notion that experience is gained by action has been embraced by the EPCglobal US community. Since the inception of EPCglobal in 2003, companies have been driving change in the supply chain and business processes by implementing Electronic Product Code technologies. Through pilots and launches, the vanguard of the EPC movement has been creating the experiences and knowledge necessary to deploy the technology successfully and chart a path toward enhanced business value.

Early adopters have stood steadfast in their belief that EPC will deliver a return on their investment. They've also stood relatively quiet, focusing on their implementations and refining their pilots instead of publicizing their results. But that's beginning to change.

Gillette, for example, has deployed EPC systems that have not only captured and communicated a wealth of supply chain information but also identified specific ways that the technology will deliver an ROI. The company is now sharing the intelligence it gained by getting on board early.

In one pilot, Gillette tagged cases of razors for a store promotion and tracked them through the entire supply chain-from its pack center to several retail distribution centers and dozens of stores participating in the promotion. Gillette could see how long it took for the razors to be delivered to the stores, and how long they remained in storage before being moved to the sales floor.

The company discovered that while some of the razors were moved quickly from the back of the store to the sales floor, others just sat in back while the four-week promotional period came and went. In fact, one-third of the stores participating in the pilot didn't capitalize on the promotion.

Gillette then dug deeper. When the company compared the EPC data with the retailer's point-of-sale data, it found that razor sales in stores that didn't put out the promotional merchandise lagged those in the complying stores by 19 percent.

The results are surprising and open the door for significant sales opportunities. According to conventional wisdom, the manufacturer is hit with the work and cost of applying EPC tags and only the retailer sees benefits. But Gillette found that 90 percent of the benefits gained by deploying EPC and changing processes will be captured by both the manufacturer and its retail partners.

This is just one of many EPC pilot programs that are providing manufacturers with valuable information to help them streamline processes, improve efficiencies and reduce costs. Companies are documenting their successes—and failures—in the form of white papers, case studies and other materials that will be collected into a searchable knowledge base of what works and what doesn't for dozens of applications. These tools, available to any EPCglobal US member, will show the industry how to walk the talk and deploy EPC technology in a way that will deliver real benefits to the entire supply chain.

Mike Meranda is president of EPCglobal US.
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