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Underneath the glitz of a Wills Lifestyle store were tricky challenges like shrinking product lifecycles, unpredictable demand, and a long and inflexible supply chain. IT helped tame these monsters using RFID.

T agged!
By KaniKa Goswami
Reader ROI:

The far reaching benefits of RFID How RFID can produce greater efficiencies

n the fashion retail business, speed is what separates the chumps from the Valentinos. How fast an organization can respond to new customer demand is key. And when creatives and seamstresses are all driven to turn around ideas quickly, frittering the time gained makes a mockery of the system. But like a fast moving stream entering a broad plateau, garments destined for Wills Lifestyle Retail slowed down when they got to warehouses. It was like the warehouses were thumbing their noses at the system. And it wasnt funny. Everyday that a box of clothing stayed shelved in the warehouse, was a day less on display and 12 hours worth less of opportunities to make a sale. That, however, was a fact at the Rs 300-crore fashion house that belongs to the ITC Group. As truckloads of boxes waited outside warehouses, workmen couldnt inventory them fast enough. The challenge was to deal with large volumes because people have been doing it manually, says O.P. Bansal, CIO, ITC Lifestyle Retailing. A lean supply-chain could help. But with traditional and manual practices, there was only so much that the company could crunch its time-to-market cycles. Looking to streamline their operations, ITC Lifestyle Retailing, conducted a detailed study to assess their overall supply chain process. After their huddle, they returned a solution they had probably guessed before the study: RFID was the solution that could best increase the companys responsiveness. A business case was put forth to implement RFID at an item level. The aim was to speed up existing processes, reduce time-to-market, handle material efficiently, and bring more accuracy of books versus physical stock, says Bansal. But the company knew they were shopping in the unknown. Few companies have invested in RFID, shying away from the technology because of its price and inaccuracy. Fewer still have attempted in Indias retail scene. So, the core team decided to start with a pilot, and follow it up with phased implementations. The first phase would last a year starting from September 2006.

season and host of other parameters. The warehouses run on a warehouse management system that are tied into MOVEX, a fashion ERP. They have separate bays that receive, scan, store (in metallic bins), segregate and dispatch products. The IT team looked at this workflow picture and decided two things: any garment carrying the Wills Lifestyle brand needed to be RFID tagged at a ITC Lifestyle Retailing factory (before they got to the warehouse) or at an outsourced manufacturer. Second, they needed to create two RFID tunnels at each warehouse: one for incoming goods and another for those leaving the warehouse. Like other RFID implementations, the IT team at ITC Lifestyle Retailing bumped into challenges of read accuracy, read speed and tag orientation. Thats when they turned to solutions such as PLC-based RFID tunnels for the warehouse and smart, customized point-of-sale software (POS) for the stores. During the pilot, we tested a variety of RFID tags and RFID readers and antennas. Various systems the RFID tunnel was one of them were conceptualized and fabricated to achieve our goals, recalls Bansal. Meanwhile, at the stores, the RFID program was meeting its own challenges. Since each store has two counters for customer billing, store managers decided to

IllUStrat Ion by anIl t

MakIng IT STIck
ITC Lifestyle Retailing has two gigantic warehouses, which swallow up everything their factories produce and carefully distribute clothing based on location,

Saving time means a garment gets more time at the store. That makes more business sense to me than saving labor costs.
O.P. Bansal
CIO, ITC Lifestyle Retailing

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Photo by SrIVatSa ShandIlya

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use a similar approach to that at the factory: Rs 15 lakh will get the bean counters they placed RFID antennas in drawers behind whistling, but Bansal is focused on another, the counters. more important benefit. I am not looking But for all its potential, RFID is still far at this as a labor saving activity. If we can SNAPSHOT from a plug-and-play solution and possesses save time in the warehouse that means every technological challenges when its being garment is getting about seven days earlier ITC Wills deployed in a live environment. ITC Lifestyle to the store. And that makes more business Lifestyle Retailing had to take on radical changes in sense to me, says Bansal. Retail processes, face problems with integrating the Since the implementation, the extra time REvENuE: rs 300 crore technology with existing systems and deal every garment spends in the store is affecting with an unavailability of a standard program the companys bottomline positively. With IT STAff: 40 interface for RFID hardware. some garments getting as much as extra 10 The high price of RFID tags, too, has to 15-day window, ITC Lifestyle Retailing has CIO: o.P. bansal traditionally been a stumbling block for the seen a 1 to 2 percent uptick in sales. technology, and Bansal couldnt get away Another advantage is a huge reduction from it. Earlier, we used tags that were worth Rs 6 or Rs in the return of non-saleable goods from the showroom. 7. Thats almost 1 percent of my product cost and that is As a direct result of mishandling in the warehouse, an significant, he says. astonishing 20 percent of garments were returned from the To mitigate the high costs of the tags, other organizations stores. Now that boxes dont have to be opened, the fewer normally reuse them. But that solution would not cut ice at number of non-saleable goods is saving the company about ITC Lifestyle Retailing . Bansal says that it was not feasible Rs 15 lakh a year. Also, the percentage of manual errors has to reuse the tags since the logistics of retrieving the tags been reduced greatly because each tag has a unique identity and reprinting information on them on repetitive basis and reconciliation is more accurate. Assuming a 0.1 percent was a sizeable task. error rate across three lakh products every month, Bansal However, there was good news. Over a single season, estimates saving worth Rs 60 lakh a year. the company saw the prices of the tags fall by over 30 Like a stone in a pond, the benefits of the RFID percent. But given that ITC Lifestyle Retailing is currently implementation are sending ripples that will be felt years tagging 1.6 million garments a year, price is still a challenge, from today. Because the company can ship inventory says Bansal. in and out of its warehouses faster, it can make do with But what really worries Bansal is the changing nature of less warehouse space, creating savings in real estate. the technology. Every investment the company makes today Bansal estimates that over a period of three years the could be outdated tomorrow or worse worthless. We implementation will save the company about Rs 10 lakh are still experimenting. Whatever we may have done so far in real estate costs. may become obsolete. That is one of our biggest challenges, Sanjeev Khanna, who is in charge of logistics, says, The says Bansal. operational benefits that were deriving post the RFID implementation can be summed-up in two important words: efficiency and accuracy. And at the store, the RFID implementation has created In the cutthroat retail business, higher efficiencies are time for service executives. Time-consuming jobs like not a luxury, they are a must. RFID has brought that taking physical stock counts and back room management advantage to ITC Lifestyle Retailing. Under their old are now non-existent. This gives a stores staff more time to barcode system, each carton had to be manually opened, converse with customers about products and promotions, every piece scanned and entries made. And that was only which in turn increase customer satisfaction, says Bansal. when it entered the warehouse. The process had to be Plus it has opened the door for future-looking applications repeated when garments left the warehouse. like trial room experience, smart shelves, contact-less With the RFID tags, entire cartons can be scanned. payment, etcetera. Gone are the days, when boxes had to be opened by legions The project has already been rolled out across two major of workers, today, boxes are simply pushed through the warehouses in Delhi and Bangalore and across all Wills RFID tunnel. It now takes 20-30 seconds to inventory Lifestyle Retail stores in the National Capital Region. In its 30-35 garments (about one boxes worth) from between second phase, RFID will taken to other stores across the five and eight minutes. Currently, on any given day, each country. RFID could be coming to a store near you. CIO worker can handle between 2,000 and 3,000 garments from by 300 to 400 an incredible efficiency jump, Kanika Goswami is assistant editor. send feedback on this feature to which translates to savings of about Rs 15 lakh a year. kanika_g@cio.in

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