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Colombian Retailer Crystal Vestimundo Plans Second Item-Level RFID Pilot

Results of its first three-month pilot showed a significant reduction in labor associated with the shipping, receiving and inventorying of tagged apparel items; now, the company is preparing to run a more ambitious in-store trial.

By Mark Roberti

Nov. 15, 2011—Crystal Vestimundo, a leading producer and retailer of apparel in Colombia, has concluded a three-month pilot of radio frequency identification technology, in which the firm tagged 5,000 items, comprising 50 different apparel products, and tracked their movements from distribution center to store. The pilot results were positive, the company reports, so it now plans to launch a second, more ambitious pilot in February 2012, which could lead to a full-scale rollout.

The first trial, conducted in conjunction with LOGyCA, a Bogotá-based consulting and services company, ran from June 20 to Oct. 30, 2011. Apparel items manufactured by Crystal Vestimundo were tagged with UPM RFID Belt and Sirit RSI-674 tags, both based on the ultrahigh-frequency (UHF) EPC Gen 2 RFID standard. The tags were applied to the garments at Crystal Vestimundo's DC in Medellin and were sent to two stores in the same city. The items were then received into inventory at the store using a Motorola Solutions MC9090 handheld reader. The goal was to determine if RFID could reduce labor costs, while also increasing shipping and inventory accuracy.

latest company news about Colombian Retailer Crystal Vestimundo Plans Second Item-Level RFID Pilot   0
Laura Leal Londono, Crystal Vestimundo's logistics manager
At the recent RFID Textil y Confeccion (Textile and Clothing) conference, hosted in Medellin on Nov. 9, 2011, by RFID Journal and LOGyCA, Laura Leal Londono, Crystal Vestimundo's logistics manager and the head of the RFID team, told the audience that it typically takes a worker 24 minutes to receive a box containing 150 clothing items. RFID, she reported, reduced the process to less than four minutes.

Without RFID, Leal said, it currently takes approximately 15 workers eight hours to inventory the store's stock of 20,000 items, and the inventory must be counted at night, in order to avoid disrupting operations. Only 50 stock-keeping units (SKUs) within the store were tagged with RFID, Leal noted, but it was clear that the technology could greatly reduce the amount of time required to perform inventory counts. "We could take inventory every day, not just once a year," she stated.

The pilot required staff members to perform additional processes, because the RFID system was not integrated with the store's back end. Employees thus had to receive goods the standard way, as well as scan items with RFID tags. Sometimes, goods that were supposed to be tagged were not read via RFID because they were missing a tag. Eventually, Crystal Vestimundo assigned a worker to ensure that every item intended to have an RFID tag did, in fact, have one. The company ultimately achieved 100 percent read accuracy at the back of the store, Leal said.

Crystal Vestimundo operates 76 stores throughout Colombia, under the Gef and Punto Blanco brands, as well as 14 locations in Venezuela and two in Costa Rica. Retails sales account for approximately 35 percent of the company's total revenue. The remainder comes from selling the goods that it produces to other retailers, including Exito, in Colombia, and Liverpool, in Mexico.

The company began looking into RFID in 2004, around the same time that Walmart planned to require suppliers to tag pallets and cases. The firm purchased a few readers and tags to experiment, but ultimately did not pursue the initiative at that time.

In 2010, representatives of Crystal Vestimundo attended RFID Journal LIVE! Latin America. After that conference, the company began pursuing the technology more aggressively. After representatives attended this year's RFID Journal LIVE! event in the United States, the firm's VP of operations appointed Laura Leal Londono to head a small RFID team, which developed the pilot.

"We were looking to confirm that we could achieve the benefits that we heard about at the RFID Journal events," Leal said. "We've been using the RFID Journal Fashion ROI Calculator, and we believe that if we can improve sales by 1 percent using RFID, it will be worth installing the technology in all our stores to track all our items."

In addition, Crystal Vestimundo also launched an initiative last year to switch from replenishment based on forecasting to one based on actual sales. The initiative was separate from the RFID project, but during the course of the pilot, the two teams realized they could work together to use RFID to achieve the improved replenishment goals

Currently, Crystal Vestimundo's store associates spend about two hours a day performing a cycle count of a limited number of SKUs. Ultimately, the company's goal is to use RFID to carry out an inventory of all items within the store.

For the next pilot, expected to commence in February 2012, all items bound for one store will be tagged with RFID transponders embedded in hangtags. The transponders will be read as the garments leave the distribution center, in order to confirm that the proper items are being shipped. They will then be received at the store via a handheld RFID reader.

Now, during replenishment, items are placed on racks and rolled onto the sales floor. For the new pilot, a computer display in the back of the store will inform employees which items need to be replenished. A reader will be placed at the impact door, and as an employee rolls a rack of garments within range of that device, the computer display will confirm that the correct items are being replenished. Staff members will be able to take inventory daily by means of a handheld reader, and thereby update inventory data.

An RFID interrogator will also be installed at each of the store's three point-of-sale terminals. When items are sold, that information will be captured using the RFID tags, and the back-end system will note that the items associated with the serial numbers encoded onto those tags have been purchased. Readers located at the store's exit will test the ability of using RFID for electronic article surveillance, so unsold items removed from the store will sound an alarm.

According to Leal, the pilot will run for three months. If the results are positive, she said, the readers will be left in place and the system will be rolled out to other stores in Colombia. "During this second pilot, RFID will not be an alternative process," she stated. "Instead, we will make RFID part of the normal process. It's a huge project."
Pub Time : 2011-11-16 11:35:18 >> News list
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