When you think of radio frequency identification (RFID) technology in the food retailing industry, the company that usually comes to mind is Wal-Mart Stores. That's understandable, given the retail giant's pioneering RFID program in the Dallas market, which it officially launched last month in concert with 94 of its suppliers.
Yet on a global basis, the retailer that may fairly be described as having gone further with RFID technology than anyone else is London-based Marks & Spencer, the venerable purveyor of food and clothing.
This year, Marks & Spencer is about to roll out a massive supply chain program across its six major fresh-food distribution centers. The program incorporates 4 million RFID-tagged reusable trays that carry fresh products from manufacturers to the DCs and on to about 400 food stores in the United Kingdom. The company has also embarked on a test of RFID as an inventory tracking tool in nine men's clothing stores.
As a food retailer, Marks & Spencer follows an unusual marketing strategy, offering only about 4,000 stockkeeping units of made-to-order, private-label products, 70% of which consist of chilled, fresh food like meat, produce and prepared meals. Its RFID program, focused exclusively on perishable products, is intended to improve the "speed, accuracy and visibility" of the "very fast" distribution process for what is the retailer's most important food offering, noted Ian Mumby, head of logistics, supply chain and IT-foods.
Marks & Spencer has also taken the somewhat daring step of not waiting for RFID technology based on standards being developed by EPCglobal — as Wal-Mart, Tesco, Metro Group and others have chosen to do — but using already existing RFID systems suitable for its particular supply chain. It reserves the option of switching to EPCglobal standards.
Even apart from the RFID project, Marks & Spencer had a reputation as being in the "vanguard of retailers who are deeply concerned about the importance of maintaining a cool chain for their perishable products from origin to shelf," said Raul Villavicencio, general manager, Hellmann Perishable Logistics USA, Miami.
Marks & Spencer has also been active in developing in-store technology for its food stores, including a sophisticated space management system it co-developed with Marketmax, since acquired by SAS Institute, Cary, N.C. The retailer has been a leader in the adoption of self-checkout lanes in the United Kingdom, including the development of a "virtual self-checkout assistant," designed to facilitate use of the systems.
For its bold and pioneering application of RFID to its supply chain, as well as its leadership in fresh-food distribution and development of in-store processes, Marks & Spencer has been selected as the winner of SN's 2005 Technology Excellence Award in the international retailer category.
ROLLOUT UNDER WAY
Marks & Spencer began testing RFID readers at one fresh-foods depot in Barnsley, U.K., in 2002 and over the next few months will be installing the technology in its other five facilities. The devices will be initially used to read tagged trays in the receiving process, in lieu of bar-code scanning, said Mumby. Thus far, he noted, "we're very comfortable with the benefits in speed, accuracy and visibility. It's been a good investment for us."
The next phase of the project, starting in the second half, will include reading the tags at the point of dispatch to stores, which is currently not being done via bar-code scanning. Virtually all fresh food is cross docked between the receiving and dispatching areas without remaining in the DC. There are no plans now to use readers at stores.
Unlike the trials being conducted by Wal-Mart and others, in Marks & Spencer's program it supplies the tags, from Texas Instruments, Dallas, rather than the manufacturer, which only invests in technology to write information to the tags and read that information. Unlike their counterparts in the United States, the manufacturers have been reporting a return on investment. Marks & Spencer and its suppliers are using 13.56 MHZ readers, from U.K.-based Intellident.
Thus far, said Mumby, about 60 suppliers "have the capability to write to the tags." Of those, the majority are shipping products on tagged trays to the Barnsley DC, while about 20 will also ship tagged trays to the other five DCs. The number of suppliers investing in the technology "grows week by week, month by month," he said.
In terms of efficiency, the RFID readers allow Marks & Spencer DC employees to read a dolly of about 25 trays in five seconds, compared to the 30 seconds it takes to scan the same number of bar-coded trays. Currently, the tags contain the same information that would be on a bar code, though Mumby said in the future additional information could be added, such as destination store or DC.
By starting with bar-code information only, "it has made getting this up-and-running straightforward because we are providing our systems with the same information as before," explained Mumby.