ITC Wills Lifestyle : RFID

Tuesday, June 03, 2008

A wireless technology is changing the face of supply chain and customer delight at stores of Wills Lifestyle. After 9 months of speculation, ITC Lifestyle cracked the physics of RFID (Radio Frequency Identification) at item level, which markedly improved inventory velocity at the supply-chain and also customer service.

To its blend of style and fashion, Wills Lifestyle has now added a technology enabler, the RFID. Deployed across 7 retail showrooms and 2 warehouses, the project is reaping benefits to internal business users as well as external customers (consumers). RFID proved its mettle in terms of speeding up of existing processes, reducing the time-to-market, efficient material handling, and accuracy of books vs. physical stock.The impact of RFID can be chalked out at the frontend (showrooms) and backend (warehouse).

The Inception
The RFID journey began in Dec 2006 at the Mandoli warehouse of LRBD (Lifestyle Retail Business Division). During pilot, variety of RFID tags and RFID readers and antennae were tested to achieve the stated objectives of pilot. Various systems such as RFID tunnels were conceptualized and got fabricated during the pilot to arrive on the final project components. Two RFID tunnel systems were placed in each warehouse, which were geared up to be used for both receive and dispatch, as per requirement and load factor. Each tunnel enabled the reading of about 15000 pcs using three workers.

Before and Now
During the bar-code era, each piece of garment was individually scanned and lots of manpower was involved, also at the end of the day accuracy of stocks received/dispatched at the warehouse was a key concern. With RFID in place the time taken to receive 1 carton (about 30--35 garments) was reduced from about 5--8 min to about 20--30 sec. With the usage of RFID tunnels, the output per person increased from 300--400 pcs per day to about 2000--3000 pcs per day. Reduced scanning time enabled faster receiving and dispatch of merchandize, thereby reducing the time to market. Thus an extra 10--15 day window is available during the year, leading to increased contribution to the business by 1--2%.

OP Bansal, Divisional CIO B.E. (Computer Science & Engineering), M.S. (Software Systems) from BITS Pilini, is currently CIO of Lifestyle Retailing Business Division (LRBD) of ITC in India. He has 17 years of experience in the field of 'Information Technology' in various Roles and Capacities in various organizations. His large stints have been with ITC, DCM Group, and ASIL Q What were the challenges and business problems that led to implementing this project? Apparel industry is characterized by short product life cycles, tremendous variety, volatile and unpredictable demand. These characteristics, a complex supply chain and wide availability of data, make the industry a suitable avenue for efficient supply-chain mgmt practices. With traditional practices, companies cannot crunch the timelines beyond a certain extent. Responsiveness to the trends of customer demand is the key driver in the lifestyle retailing business, which comes from speed of operations and velocity with which inventory moves. Q What were the key benefits gained after having deployed this project? With one of the first PoS app put to use for daily store operations and first in India to crack the physics of RFID at item level, ITC Lifestyle has been able to witness tremendous benefits in the areas of supply chain and customer delight. Some of the these are mentioned below: (1) Reduced time to market  (2)Increased warehouse efficiency  (3)Reduced material handling  (4)Reduced manual errors  (5)Reduced billing time leading to faster check outs at showrooms

Owing to increased inventory velocity in the supply chain, the merchandize now sits for a lesser time in the warehouse, thereby eliminating the need for additional warehouse space over the next 3 years, than the need now. More so, about 20% of the non-saleable returns from the stores were attributed to the reason of mishandling at the warehouse. With the project in action, since the physical handling at the warehouse is reduced, the percentage of non-saleable garments have reduced considerably. With unique identity of each tag, and faster reconciliation, the magnitude of manual errors was greatly reduced. (Assuming a 0.1% error rate on overall movement of goods of 3 lacs pcs per month).

At the frontend too RFID palyed a significant role: the scanning time at PoS has been reduced from about 3--4 sec per garment, to 2 sec for any number of garments in the basket. This helped in faster billing, reduced queues at the store especially during EOSS, and greater customer satisfaction. The consumers see benefit in terms of quicker check outs and no more standing in the queues for billing.

Project Architecture

The potential for RFID to deliver tangible benefits in terms of improved retail productivity, reduced out-of-stock, improved inventory management, reduced shrinkage and theft, reduced supply chain errors, etc, gave ITC WillsLifestyle the magical answer.

In years to come
RFID is an innovative technology which is going to stay for years to come, as it brings in lots of benefits to traditional supply chain and customer facing apps. The very nature of the technology opens up avenues for many more apps and its widesp read usage.

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