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Pantaloon’s experiment with RFID

Pantaloon’s RFID pilot project is helping the company save time and improve the accuracy of merchandise movement, writes Vinutha V.

Much has been written about Radio Frequency Identification (RFID) and what it can do for manufacturers—improve production operations, asset utilisation, forecasting, inventory accuracy and customer satisfaction by pinpointing the location and status of products as they move through the manufacturing and retail value chain. Taking a cue from this, Pantaloon Retail (India) has piloted an RFID project at one its warehouses in Tarapur using 1,000 RFID tags. The company is starting from where it matters the most by implementing the technology at the warehouse.

Says Chinar Deshpande, CIO of Pantaloon, “We want to use IT as a strategic tool to differentiate ourselves in the market with new initiatives such as the RFID project. While a SAP implementation is currently underway, the RFID initiative was more to do with improving the efficiency of the entire supply chain, and we wanted to be the first to execute it. We want to automate the entire supply chain from suppliers to warehouses and stores, and make it transparent.”

Problems faced

The company began to focus more on IT to bring in more transparency in its customer relationships and to streamline its supply chain. Says Deshpande, “Whenever we procure merchandise, the entire process had to undergo two to three steps before it reached outlets.”

At each step, human intervention was required and barcode readers were installed at merchandising locations. Traceability and visibility of goods in the supply chain, lack of a unique identity at each item level, and human intervention leading to errors were some of the issues faced by the company. Further, these challenges led to a lack of co-ordination with the backend at the stores, hampering the company’s production planning and inventory management.

Simplicity wins the day

We see the use of RFID technology improving collaboration across our supply chain right up to the point of sale Chinar Deshpande CIO Pantaloon

Pantaloon went in for RFID for its simplicity of tagging, efficacy of use, product buffering, ability to keep track of over-produced items, and ability to monitor product-line lead time at the warehouse and fast-moving product-lines. The company selected a few lines of apparel, primarily shirts and trousers, for its RFID pilot. The RFID application developed by Wipro Infotech was tailored to the overall solution in line with Pantaloon’s business processes and IT landscape (from the factory outward to the warehouse inward and from the warehouse outward) in order to capture real-time data. The application is integrated with Oracle database 10g and middleware along with an implementation of the RFID hardware. It integrates with the existing IT infrastructure, the in-house developed Retail Enterprise Manager. The main objective was to smoothen the entire product lifecycle, introduce item-level tagging for identification, and track the entire RFID roadmap with Pantaloon. The piloting was also to do an RFID feasibility study for additional uses.

At the factory outlet, RFID tags were attached to the merchandise and the data written to them. When the RFID-tagged merchandise comes through the inward gate, all related information such as purchase and delivery orders will be fed in the inward terminals in real-time. After correlating the requirements of specific outlets with the merchandise in the warehouse, the items allocated for different outlets will be transported. The tags are removed once the RFID-tagged goods pass through the outward terminal.

Getting to grips

There were a few hiccups related to integrating the RFID application with Pantaloon’s legacy IT infrastructure. Since it was meant to be a pilot project, the limitation was that only 1,000 tags were available. Initially, the application was supposed to be only for home-made product lines. As the tagging offers simplicity in goods tracking, re-allocation of manpower became an issue. The inward numbers of a product had not to exceed 500 finished products on a particular day in the warehouse. The selected product line had to be one that had a constant movement and was not seasonal. Additionally, there were operational challenges. Since RFID is a new concept, making factory workers understand it posed a challenge. Handling of RFID tags was an issue because the tags needed to be attached to items and data written to them. Warehouse workers lacked an understanding of the need to pass material through the RFID reader. Removal and return of RFID tags at the factory was also difficult. Uploading files, and managing applications and devices, were not easy through the new application. The RFID evaluation was done in October 2004, and it took four months to implement the pilot project. The pilot was implemented at a cost of Rs 30 lakh, which included the hardware cost (a writer, 2 tag readers and 1,000 tags) and the cost of system integration.

Efficiency and accuracy

Although with a few hiccups, Pantaloon has enjoyed certain benefits. “Recording of data became smooth at the inward and outward terminals, which helped us save time and gain accuracy. Earlier, the possibility of scanning incorrect goods was much higher,” affirms Deshpande. Before the implementation, each item used to be scanned through the barcode recorder. After the RFID implementation, the time saved on the same is about 80 percent in inward warehouse processing and 12 percent in outward. Real-time visibility of items during all stages of the supply chain improved to 98 percent.

Pantaloon now aims to extend the application to production routing and scheduling, product recall and returns, and real-time data for category managers for effective forecasting. “We expect that the RFID application will further help us to improve the shopping experience, store layout and any inventory situation. Going forward, we see the use of RFID technology to improve collaboration across our supply chain right up to the point of sale,” remarks Deshpande.

vinutha@expresscomputeronline.com