retail information services proprietary and confidential presented by: philip calderbank director...

Retail Information Services

Proprietary and Confidential

Presented by:

Philip CalderbankDirector Global Marketing RFID/SecurityRetail Information Services

INFORMATION SYSTEMS COMMITTEESpring 2007 Meetings

ISC Spring 2007 Meetings



Agenda

• Overview AD Retail Information Services (RIS)• Business Drivers Supplier/Retailer• Supplier Benefits • Retail Benefits

– Uses– Case Studies

• Retail Information Services– Ticket Express – We do it for you– Starter Kit – Do it yourself




RFID in RetailRFID in Retail

+ =

•Focused on apparel and footwear industries

•Billions of price tickets, hang tags, woven / care / heat transfer labels every year

•More than 40 Service Bureaus / Ticket Centers worldwide

•Custom RFID item tags specifically developed for apparel applications

Avery Dennison Who are we ?




Avery Production FacilitiesHK – Germany - USA

Converted RFID Label

RFID Inlay

RIS Label Production

RFID Label ManufacturePrint & Convert




RFID a Major Time Saver

RFID avoids the need for line of sight and provides the ability to read multiple tags at the same time

Exit loading dock 5

READER

Track & Trace

Match ShipmentTo

Purchase Order




A Perfect World

Increased Revenues

Reduced Costs

IncreasedProfits

RIGHT PRODUCTRIGHT PLACE

RIGHT AMOUNT

SECURE ENVIRONMENTRIGHT TIME

€€€€




Avery Dennison’s RFID position

Chip Designand

Manufacturing

Label Converting

Inlay Assembly

Pre-programmed RFID tags (Service Bureau) / Printers /

Applicators

Antenna Design and

Manufacturing

Avery Dennison RFID Division

Avery Dennison - Retail Information Services

Other Converting/Printing Partners

Chip Partners

User (Factory / DC)




Business Case Economics

BusinessObjectives

Maximize Economic Value Added(Maximize Operating Income while Minimizing Capital Costs)

IncreaseRevenue

IncreaseRevenue

ReduceOperating Costs

ReduceOperating Costs

OptimizeAssets Employed

OptimizeAssets Employed

• Increased on-shelf availability

• Improved customer service

More responsive production

Reduced order cycle times

Automatic replenishment

Enhanced collaboration

• Eliminate manual physical inventory counts

• Increased shipping and receiving efficiency and accuracy

• Faster picking process in the warehouse

• Reduced number of unsaleable products (spoilage, seasonal & promotional items)

• Improved stock visibility and traceability

• Reduced inventory levels• Improved forecast

accuracy• Improved visibility

• Reduced warehousing requirements

• Improved productivity through JIT delivery and information sharing

RFID Benefits

RFID In Retail

Enhance Safety & Quality Control

Enhance Safety & Quality Control

• Reduced shrinkage• Enhanced responsiveness

to product recalls and food safety concerns

• Reduced exposure to public safety risks (e.g., hazardous materials)

• Better monitoring of cross-border shipments

• Increased visibility into recycling

RFID enabled Retail supply chain-

Right Product – Right Place – Right TimeIncrease Sales/Reduce Costs




Mobile Stock Taking

Permanent Inventory

Taking

Searching of Articles,Product Information

Cashing

RFID Retail




On-shelf availabilityBenefiting Retailer & Supplier

A Recent IGD survey showed that the grocery sector in the UK achieved 90% availability, and a 4% improvement would yield a 1% increase to the bottom line (1)

Reader

StoreReader

Improved on-shelf

Availability

An RFID solution provides accurate information about what’s in

storeaccurate information about back room

versus shelf the ability to improve handling / rotation

of fresh / perishable tighter control over theft / shrinkage




Out-of-stock / revenue opportunity management

• Minimizing out-of-stocks increases revenue potential

• Increasing visibility to sale data and inventory levels helps

– speed accurate on shelf replenishment

– Ensures Right Size – Right Style

• Sharing inventory and consumption data with suppliers for a more efficient supply chain




RFID Store Example

A

Receiving

B

Shelf inventory

C

Stocking

D

POS

EReplenishment

• Identify cartons via RFID handheld• Previously received ASN contains carton contents

• Once a day, store associates take full inventory of products on display

• Compare on-shelf “RFID inventory” to model stock and restock accordingly (see also Case 1)

• RFID reader at POS counter• Automatic generation of sales order / inventory reduction

• Automatic preparation of replenishment orders for OOS items

Sales Floor Back Room




Case studies illustrating these RFID benefits

1. Reduced out-of-stocks in store

2. Faster / better customer service

3. Backroom / in-store efficiencies

Case Studies




Reduce retail out-of-stocks

1. Take “RFID inventory” once a week

2. Compare to “system inventory” / planogram

3. Restock accordingly to ensure on-shelf availability

Benefits both Retailer and Brands

“It’s Retail 101 – if you restock according to your planogram every morning, your sales are going up. That’s why you plan an optimum shelf count in the first place”

VP IT, Retailer

CaseStudy 1

Marks & Spencer




Hardware

Cart-based RFID reader

RFID hang tags on garments

CaseStudy 1




Pilot Results …

Reduce retail out-of-stocks

CaseStudy 1CaseStudy 1CaseStudy 1




Case Study 2

Faster/better customerservice




Faster customer service

1. Back room and supplier DC inventory tagged with RFID

2. Store associates have handhelds that show inventory by size / style (in back room and DC)

3. RFID enables faster customer service – immediate response to inquiries and less time spent in back room

Footwear retail example (Japan)CaseStudy 2




Faster customer service

CaseStudy 2




RFID in Footwear Retail - Results

Without RFID With RFID• 1.8 pairs shown every 12

minutes• 3 pairs shown every 12 minutes

• Customers doubt accuracy of paper inventory book

• Customers more trusting when shown on computer

• Status quo; no sales lift • 10% lift during busy Oct-Dec holiday season

Source: Kurt Salmon Associates




Case Study 3

Backroom andIn-store efficiencies




Increased efficiencies at retail

1.Every single garment is tagged with RFID at DC

2.RFID read points in store e.g. at receiving, POS

3.Associates use handheld RFID readers

How can RFID save cost in a retail store?CaseStudy 3




Increased efficiencies at retail

How can RFID save cost in a retail store?

RESULTS• Speed up goods receiving – processing 650 items in

30min compared to 2 hours• Taking full store inventory in 45 minutes (one employee)

instead of two days (four employees)• Inventory accuracy: 80%99%

“Everybody claims that their inventory is accurate, but only with RFID do we really find out where we stand”

Retailer

CaseStudy 3




Item tagging Benefits

Supplier Benefits

2. RFID in Logistics = Reduced Cost of Logistics

• Checking product shipments against PO / less charge backs

• Real time visibility & order accuracy / less safety stocks• Less safety stocks /less warehousing/less handling• Identify Choke Points/speed up delivery

1. RFID in Store = Order Uplift

• Real time visibility = Improved Order Accuracy• Accurate Stock Counts = Correct Stock Replenishment• Right Product – Right Place – Right Time = Sales Increase

Sales




Service Bureau / Ticket Express™

US “Master” Customer

Factory /Contract

Manufacturer

Purchase Order

Ticket Center

Pre-printed tags /

tickets / carton labels

Via EDI/…• Ship to• UPC• Vendor• Barcode …




Changing Vendors

US “Master” Customer

Contract Manufacturer

1

Ticket Center

Via EDI/…• Ship to• UPC• Vendor• Barcode …

Contract Manufacturer

2

Purchase Order

Purchase Order




Two Implementation Models for RFID

Description

Implications

• Pre-programmed RFID labels ordered from 3rd party

• Labels pre-programmed, shipped to facility, held in inventory until applied to case/pallet

• Lower investment / technology risk (still requires reader and software investment)

• SKUs, labels must be pre-defined in advance, must stock SKU specific labels

• Facility invests in RFID programming equipment

• RFID labels programmed in the customer facility (plant or DC) either in batch or real-time

• Must invest in RFID programming equipment / have data management capabilities

• Only hold non-SKU specific label inventory

RFID Service Bureau In-house Programming




RFID Source Tagging - Overseas

RFID Service Bureau

/Ticket

Express*

RFID Supply Chain

Software

(In-house programmi

ng)*

(*) Simplified

USVendor

Service Bureau

Data incl. EPC

Asian Factory

RFID Labels

Vendor DC (US)

Retailer DC (US)

Cases/pallets

Retailer DC (US)

Vendor DC (US)

Cases/pallets

Asian Factory

USVendor

RFID Labels

RFID Supply Chain Software

• Label format• EPC generation• P/O management• ASN generation• …




Summary

RFID Source Tagging has a number of benefits for vendors• Improved supply chain visibility• Cost reduction• In order to implement RFID Source Tagging, vendors

need to consider …• Factories’ data management capabilities• Logistic process restrictions Pre-printed tags vs. in-house programming overseas

Start analyzing your processes and involve suppliers soon!




RFID Product Offering

RFID Ticket Express® (Pre-Printed/Pre-Programmed

RFID Labels)

“We can do it for you …” “We can enable you to do it yourself …”

RFID Starter Kit(RFID Printer + Blank RFID Labels)(1)

(1) Plus external reader (optional), software and installation support

Two easy RFID solutions from Avery Dennison RIS

retail information services proprietary and confidential presented by: philip calderbank director...

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