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American Apparel Finds the Right Fit with Motorola RFID

Posted May 25, 2010

Company overview

American Apparel is a manufacturer, distributor, and retailer of branded fashion apparel based in Los Angeles. The company started in 1989 as a wholesaler of t-shirts and opened its first retail outlets in 2003. As of mid 2008, American Apparel operates over 200 retail stores in 18 countries and the chain is still growing rapidly.

All of American Apparel’s products are manufactured in the United States; its wholesale business supplies its cotton-based casual wear to distributors and screen printers. The company is a vertically integrated operation and conducts its own knitting, dying, cutting and sewing, and design out of its headquarters in downtown Los Angeles. American Apparel’s young, metropolitan customers are very loyal to the brand.

The challenge: improve business processes and reduce lost sales attributable to out-of-stocks

American Apparel retail stores operate boutique-style, stocking only one item of each style, color and size on the floor at any time. Inventory turnover is quick and traffic between the stock room and the sales floor is high, particularly during busy hours. With more than 26,000 SKU items to manage, maintaining accurate inventory counts and a 100% stock mix on the floor consumed significant time and labor. However, both were considered critical to the chain’s success, since inventory errors and stocking delays translated directly into lost sales.

The potential benefits of reducing labor and increasing sales from deploying an item-level RFID operation at American Apparel were clear. And given the control it has over its manufacturing, distribution and retail operations, American Apparel’s plan was not only to reap the benefits of RFID on the retail floor, but throughout its closed loop supply chain. The company was eager to test the current capabilities of RFID for accuracy, performance and adaptability to American Apparel’s business processes, with four clear goals for process improvements:

  • Increased stock visibility
  • Improved accuracy/reliability of inventory counts
  • Decreased labor costs and human errors associated with inventory
  • Sales floor stock levels maintained at virtually 100%

Planning the pilot: the right location and the right partners to test the potential of item-level RFID

American Apparel gave careful consideration to its choice of store for the pilot. They were looking for a store that had average sales and a dedicated staff that would embrace the technology and a new process for inventory management. In addition, they wanted a location with good traffic flow that was centrally located to other area stores, to facilitate a regional roll-out if the single store pilot proved successful. Ultimately, the store chosen was the Columbia University area store in New York City, which also serves as the returns center for all the American Apparel New York City stores.

Equal consideration was given to the technology partners who would support the pilot. To give item level RFID a legitimate test in a real-world retail environment, American Apparel wanted to start with proven and universally-deployed hardware and software. Based on their market leadership and technology innovation, American Apparel chose Motorola MC9090-G RFID handheld readers for product commissioning and cycle counting. Motorola XR440 fixed readers with AN400 antennas were deployed to track stock moving from the backroom to the sales floor, and also at the point of sale to indicate a sale, decrement inventory, and trigger a product replenish. The retailer also used tags from Avery Dennison’s Retail Information Services combined with Vue Technologies’ TrueVUE Platform.

The TrueVUE platform offers retailers a streamlined, scalable platform that offers increased visibility into inventory levels, location and authenticity. The initial deployment of American Apparel’s pilot system placed RFID tags on each item of clothing and merchandise within American Apparel’s Columbia University area store in New York City.

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RFID: Track and Trace

Posted June 25, 2009

Outsourcing continues to remain a dominant force throughout the pharmaceutical industry, as more companies than ever move to the “virtual world” of contract manufacturing. By incorporating outsourcing — a cost-effective, flexible approach to resource allocation and investment — into a company’s overall business strategy, pharmaceutical companies gain new opportunities to sustain long-term growth and competitive advantage. But the increasing globalization of the contract manufacturing market can lead to a rush to expand practices in low-cost countries, straining brand owners’ ability to manage and control their manufacturing, packaging and supply chain operations.

Despite outsourcing growth and the availability of Web-based tools, few manufacturing companies have successfully automated communications and operations to collaborate with suppliers, distributors and contract manufacturers. Instead, they still continue to rely on outdated processes that contribute to delays, errors and excessive inventory and costs.

To succeed with pharmaceutical outsourcing, a company must collaborate closely with partners. In order to succeed with collaboration, a company must have in place technologies and processes that improve control, visibility and velocity across the outsourced network — namely barcoding, radio-frequency identification (RFID) and track and trace capabilities.

Coca-Cola Testing RFID on Coke Machines

Posted June 22, 2009

RFID and Coke

Coca-Cola has begun beta-testing an RFID-enabled drink dispenser that the company claims will transform the soft drink dispensing industry, by providing more than 100 drink options from a single machine. The machine, known as Freestyle, utilizes RFID technology to identify 30 or more cartridges, determine the quantity of flavoring inside each, and transmit data back to Coca-Cola indicating which drinks are being consumed, and when.

“We consider Freestyle nothing short of a revolution in the fountain dispenser business,” says Ray Crockett, Coca-Cola’s director of communications. The system not only offers consumers a vast choice of Coca-Cola beverages, he notes—from sodas to flavored waters—it also provides the company with real-time insight into what is happening in restaurants across the United States.

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RFID Has Role Protecting Human Health

Posted June 20, 2009

Coupled with collaborative technology, RFID can help manage efficient responses such as the recall of suspected food products and notifying affected parties. For example, a calf can now be tracked from birth to the slaughterhouse as it is in Australia, where the National Livestock Identification System legislation mandated, in 2005, RFID tagging for cattle stock.

There are even pilots where, combined with global positioning system (GPS) and “shock” technology, farmers can manage RFID-tagged cattle within certain geographical boundaries.

Let’s envision how RFID and collaborative technology can work together to help assure the quality of pork humans consume.

Filed under: RFID

Cost Still a Hurdle for RFID

Posted June 19, 2009

According to a survey conducted by Australia-based University of Wollongong’s Centre for Business Services Science, one reason companies adopt radio-frequency identification technologies is to gain an advantage over their rivals, and another is improved data accuracy. Companies that have not adopted RFID, however, cite the technology’s cost as one of the most important factors influencing their decision.

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Dairy Queen Tests RFID Mobile Marketing Solution

Posted June 18, 2009

Tetherball, an industry leader in mobile loyalty and rewards solutions, has unveiled its breakthrough RFID-based mobile marketing platform and a test with International Dairy Queen.

According to CBS News, the test is being conducted at a single Dairy Queen store in Rochester, Ind. The solution tracks customers’ purchases and makes are make customized coupon recommendations upon their entering the store.

“We are a big believer in the future of mobile marketing,” said Jamie Guse, Web site manager for International Dairy Queen Inc. “Through (Tetherball’s) innovative RFID-based Mobile Loyalty Program, we are able to provide great offers to our customers in a fun and easy way while precisely measuring the effectiveness of our Dairy Queen Mobile Rewards Program.”

International Dairy Queen Franchisee Dave Reasner has been working with Tetherball for nearly two years to refine the mobile loyalty program for his stores. The program now averages more than 900 members per store, with continued solid growth in membership and redemption rates. The solution is “making a measurable difference in our year-over-year traffic and revenue,” he said.

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Will RFID Lead to Near-field Communications (NFC)?

Posted June 18, 2009

rfid-tag[1]Mobile banking and payments is considered a promising area, in which near-field communications (NFC) is widely viewed as the pinnacle. NFC promises to turn the mobile phone into a secure credit card by enabling the exchange of data between devices over about four inches of distance. While companies work out the kinks to make it attractive for all members of the ecosystem, including carriers, radio frequency identification (RFID) tags that can be affixed to the mobile phone are cropping up as a temporary solution – one that Aite Group senior analyst Nick Holland says is extremely flawed.

“This is seen by the people who put the stickers out as some interim technology that will magically get us to NFC, whereas what is really required is a solid business case for NFC and a level of merchant penetration for contactless payments that makes NFC viable,” Holland said. “This, as far as I’m concerned, is a step in the wrong direction. This is not something that will accelerate NFC. If anything, it’s going to be a distraction.”

Companies including Blaze Mobile, MasterCard, First Data and, as of today, Alcatel-Lucent and Tetherball, are among those using RFID stickers to bridge the gap to NFC. Alcatel-Lucent (NYSE: ALU) announced today its touchatag venture will work with Belgacom mobile and micro payments company PingPing, to create an open model of application development for contactless cards and mobile payments. Through the partnership, Belgian consumers can use one contactless card or sticker to launch mobile payments or other mobile applications.

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Debunking Reports of RFID’s Death

Posted May 6, 2009

rfid-tag[1]Given some of the negative news this year related to the use of radio frequency identification, as well as the decline in capital spending by most businesses, some had predicted the industry might have suffered a devastating blow from which it could not recover. I doubt anyone who attended last week’s RFID Journal LIVE! event in Orlando, Fla., would reach that conclusion today.

Our seventh annual conference and exhibition attracted 2,400 people, which was down a bit from last year’s total of a little more than 3,000. But many people, including exhibitors, feared attendance would be a lot lower, given that many trade shows have been down 50 percent or more due to the challenging economic conditions. They were pleased to see the aisles filled, but they were absolutely thrilled as they engaged in conversations with attendees. Most end users at the event were focused on specific projects with budgets and timelines. They are investing in RFID technology.

Last week, I said I thought RFID had crossed the chasm (see RFID Crosses the Chasm), and LIVE! 2009 confirmed that to be true. Those who attended this year were not visionaries dreaming about how RFID would one day transform the global supply chain. They were businesspeople from a wide range of industries and countries, seeking solutions to common business problems—lost and misplaced assets, inventory inaccuracy, shipping and receiving problems, and so forth.

I spoke to several end users during the free consultations we offered at the event. All had a solid understanding of RFID, and knew it could help them. They sought insights regarding which solution would be best, and wanted to know which vendors they should talk to.

Most applications being considered by attendees were closed-loop. That’s not surprising. Many companies have issues stretching across the supply chain, but it makes sense to tackle issues within their own control. They also seek solutions that can deliver a fast return on investment. Still, these early deployments will lead to additional projects down the road. At a private lunch hosted by ADT, one gentleman told me, “I got all the information I need to move ahead with my project, but I got five or six other ideas of how RFID could really help us.”

The attendees with whom I spoke impressed with the quality of the RFID products being exhibited. Hardware and software products are getting less expensive and easier to deploy. Motorola’s new reader is a case in point—it’s half the size and cost of its predecessor, but also has some great new features, such as built-in indicator lights and power-over-Ethernet, so you don’t have to run power cables to every location in which you want to place a reader.

ODIN Technologies, winner of our second Best in Show award at this year’s RFID Journal Awards ceremony (see Voegele, Vail, FOCUS and ODIN Technologies Win RFID Journal Awards), introduced a very cool self-contained, mobile RFID portal that can be installed in any ISO-standard shipping container in less than a minute. The unit comes with magnets enabling it to be popped into place, and also offers Wi-Fi, cellular and satellite communications capabilities to transmit the RFID data it captures.

In some ways, I think this event was critical to the RFID industry’s continued growth. The business that exhibitors get from attendees will enable them to continue investing in new products and services; without that continued innovation, the industry would stagnate. Next year, I predict that we’ll see even more attendees ready to invest, and I’m sure we’ll also see exhibitors with new, innovative products.

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RFID in Healthcare Industry 2008-2012

Posted May 5, 2009

healthcare1[1]Radio Frequency Identification, which is better known as RFID, can be translated as the use of radio frequencies to read and transmit information through the use of small devices called tags. These are currently being used by healthcare organizations in order to tackle new challenges.

Such challenges are “operational efficiency, patient safety, and improvement of the business processes”, declares one of the TechNavio experts. In fact, healthcare providers and payers, including patients, “are transforming the usage of RFID from technology that is used to reduce costs to facilitating, automating, and streamlining identification processes.”

Healthcare organizations, including hospitals, nursing homes, home healthcare facilities, health maintenance organizations, laboratories, clinics, physician offices, and pharmacies situated within hospitals, form the cumulative healthcare industry in the report, which has recently been published by TechNavio Insights.

According to the report “RFID in Healthcare industry 2008-2012, by 2012”, “the market for RFID tags in healthcare industry is expected to reach $153.2 million driven by the development of lower cost tags and installed infrastructure, which will enable high volumes of articles to be tagged.”

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Dallas Cowboys Stadium Goes High-Tech

Posted May 3, 2009

dallas_stadium[1]When the new Dallas Cowboys football stadium opens in June, it may not only be the largest sports stadium in the world, but also the one with the most technological innovations.

Three million square feet is a lot of stadium, and 1.1 billion dollars is a lot of money, but part of what will make this new stadium shine is the technology that has been built into it. Jerry Jones, the owner of the team, is high on technology. Pete Walsh, head of technology for the Cowboys, says “I was given a blank sheet of paper and told to go create the future.”

Walsh took that directive literally and has created a tech marvel in the heart of Texas. When fans attend a game at the new stadium, they will be able to e-mail photos to friends, find lost children, cash in wireless coupons and watch customized content on the thousands of televisions, according to a Dallas News story. That’s a far cry from the limited technology that was available at the Cowboy’s previous, 37-year-old facility.

Walsh says, “Texas Stadium doesn’t have a whole lot of technology in it. Basically, you flip on the lights and roll out the football. In the new stadium, almost everything is tied to technology and to a computer.” Here are some of the innovations in the new stadium:

* The stadium will sport two 60 yard video monitors above the field.
* They will be among the 2800 monitors installed in the stadium, every one of which will have its own IP address.
* Stadium personnel can put any available video stream on any monitor at any time, via computer control.
* When complete, parents and stadium security will be able to track children via RFID.
* That same RFID system could help keep track of team property, and keep it from being removed from the stadium.
* Thirty antennae are spread throughout the stadium to insure good telephone and WiFi inside the facility.

Even if the team does not perform, the stadium will. Although most of us do not often think about it, there is a lot of technology packed into almost everything that is being built these days. There is no reason that stadiums should be any different. This new facility will give other team owners another way in which they need to keep up with the Jones’.

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