RFID technology is paying large dividends to companies in all industries. Airbus, one of the leaders in adopting RFID in the manufacturing sector, has seen total savings reach nine digits, or more than $100 million, since deployment efforts began in 2007.
“Our CFO is very happy,” says Carlo Nizam, head of the value chain visibility program at Airbus. Each A350 XWB produced now carries 2,000 tags, and represents “the first aircraft in commercial avaition history to come pre-delivered with RFID tags on the parts,” says Nizam.
Macy’s, the leader in RFID in retail, just received funding from its board for three more years of RFID deployment, which will support the next level of its RFID journey through 2017. Macy’s has seen sales gains ranging from the high single digits to double digit growth, depending on the category.
“RFID has been so successful that we just received our next round of capital,” says Pam Sweeney, senior vice president of logistics systems at Macy’s. “For those vendors selling to Macy’s who are not on source tagging yet, we are anxiously awaiting your commitments.”
UK-based retailer John Lewis is earlier in its RFID campaign than Macy’s, but the chain has been able to reduce out-of-stocks by up to 20 percent, while increasing sales by as much as 15 percent in tagged categories.
Stacy Shulman, vice president of brand, wholesale and retail technology at Levi’s, provided an update on RFID within the iconic jeans maker. Levi’s is tagging more than 60 million units that it delivers to wholesale outlets. Although it has RFID enabled 67 of its own stores, deployment within its own chain has not been a major focus. That is about to change, as Levi’s begins to pilot fixed reader infrastructure.
“We have reinvigorated interest in RFID at our retail stores,” says Shulman. “We’ll be doing fixed infrastructure testing and piloting and modifying our processes and taking a methodological approach to implementing RFID through our retail stores.”
Marks & Spencer continues to get closer to 100 percent deployment. The retailer is deployed in 380 stores and is now tagging 500 million items a year.
Richard Jenkins, head of RFID strategic development at M&S, says that the decision to tag all goods was made even though it is not cost effective in all categories.
“In 15 percent of store categories the cost of doing RFID outweighed the benefit, but for the greater good, having that completeness leads to so many things you cannot do if you only have 80 or 90 percent of items tagged,” he says. “In addition, having two different processes — one for RFID and another for non-RFID departments — adds cost and complexity to the operations.”
Marks & Spencer is now tagging 100 percent of its clothing items and half of homeware goods, such as bedding and towels. Plans are to complete the homewares section next spring. That will add another 25 million tags to the mix, and means that Marks & Spencer will have completed RFID in all but four of its 68 product categories. Today, 94 percent of Marks & Spencer sales comes from categories that are tagged with RFID.
In the future, both Macy’s and Marks & Spencer plan to research non-retail use cases. Macy’s for example, is taking advantage of cycle counting in its stores to acquire a better understanding of the boxes and bags that are consumed with purchases.
Marks & Spencer plans to tag typical retail assets like roll cages and display racks in order to better locate them as assets move around the store.
“We have a huge amount of equipment, and every year we spend tens of millions to buy more equipment because we don’t know where it is,” says Jenkins. “We keep buying more and more because we’re terrified of running out. In a world where we use RFID to cycle count, if we knew what we had we wouldn’t have to be spending all this money on equipment.”