One of the earliest pioneers of RFID has claimed that the technology has not yet produced any improvement in availability or sales - two of the main perceived benefits - but it's had an unexpected impact on waste.
Speaking at last week's CIES It & Supply Chain conference in Geneva, Ian Mumby, Marks and Spencer's head of supply chain, logistics and IT - foods, said when M&S first introduced RFID in 2001, it thought there would be benefits to: the accuracy of supplier outloading, stockfile administration, productivity, stockfile accuracy and availability.
There have been improvements in some of these areas, says Mumby. "But it's not really affected availability or sales yet. Where it is having a markedly beneficial effect is on waste. That's what we've learned so far," he says.
"We scan before loading the product on to the truck and compare that with what the system said we should be sending. Once we've identified any error, we can update the stockfile with accurate information. Because the stockfile is accurate, we believe we get reduction in waste."
The discovery followed the ten-week first phase of an outloading trial that finished last month at its Thatcham depot near Reading.
The main errors were caused by suppliers pre-writing tags to trays before they were filled with product. Trays were also going through the system quicker than expected - in less than 48 hours - so old tag information was retained. Both issues have been resolved, says Mumby.
The trial also provided vital information on pick accuracy. While the depots had thought the error rate was up to one in 1,000 and stores reckoned it was as low as one in 100, the trial showed it was closer to one in 350. "Now we've got more accurate information and that's feeding the stockfile."
M&S has now entered phase two of the trial, broadening its scope from one depot and six stores to three depots and 15 stores.
Mumby remains confident there will be improvements in availability and sales, though he admits the waste benefit is not likely to be earth-shattering. "There's probably an element of The Hawthorne Effect due to the extra focus on these stores in the trial. I don't expect it to continue to be as good, but I do expect it to continue to be a major benefit."
So far, seven M&S depots and 100 supplier sites have been RFID-enabled; five million trays and 500,000 dollies tagged; and 1.8 million tags written and read per week. Compliance stands at 98.5% for tags and 90% for pallets. Suppliers too are benefiting from RFID (see boxout), says Mumby, adding that the technology is no longer the issue it was in the early days: "It's always an excuse that the tags don't work - but that's not an issue. They work whether you freeze them or heat them. Readers too have progressed and the cost has come down."
It's key to work closely with suppliers, he says. "You have to communicate how the technology works. More importantly, you have to communicate that you and they don't understand internal processes enough - these are usually the problem."
M&S's next step is to extend the outloading trial. It will also introduce fines for non-compliance. "Since 2001 there have been challenges. Last year we were talking about compliance. Now the foundation is solid we can look at exploiting it," says Mumby.
There will be broader benefits in the long term, he adds. "Trust the technology: it's robust. Challenge the processes in your business and the broader supply chain. The value of RFID is there: maybe not where first thought, but keep looking."benefits of rfid
Significant benefits have been generated using RFID on intake - when the retailer receives the product from the supplier:
dispatch control and order fulfilment
elimination of date life rejection
day and destination accountability
automatic feeds to ERP systems and trace equipment systems
pre-delivery information to hauliers and depots and electronic proof of delivery
accurate planning information
faster intake and improved productivity
accurate dispatch to stores
visibility of information