Case Studies of RFID Application - OECD.org - · PDF file · 2016-03-29Case Study...

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Case Studies of RFID Application

Masakazu FUJITA

- RFID applied in Retail & Publishing Industry in Japan -

Research DirectorNext Generation Electronic CommercePromotion Council of Japan ( ECOM )

ICCP Foresight Forum

All Rights Reserved. Copyright © Next Generation Electronic Commerce Promotion Council of Japan (ECOM) 2005

5th October 2005


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Contents

Field Trial Projects on RFID Applications in Various Industries sponsored by METI

( Ministry of Economy, Trade and Industry )

Case Study of RFID Application in Retail Industry

Case Study of RFID Application in Publishing Industry

Appendix: Field Trial Projects on RFID Applications sponsored by METI


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Field Trial Projects on RFID Applicationsin Various Industries sponsored by METI

Electronic EquipmentIndustry

Medical & Pharmaceutical IndustryThe Self-Defense ForcesLogisticsAutonomous Type Service RobotStore Complex of Media ContentsFuture Store type ServicesInternational Project by Automobile Parts Industry(Japan-China-Korea)International Project by Business Machines Industry (Japan-ASEAN)

ConstructionMachineries Industry

Publishing Industry

Appliance and Electronic Equipment IndustryMedical and Pharmaceutical IndustryDepartment Store and Apparel IndustryFreight Industry

Audio & Video CD/DVD Retail & Rental Stores

Appliance Industry

Apparel Industry

Publishing Industry

Food Distribution Industry

POCApplicationIndustries

Note: POC=Proof of concept

Utilize RFID on Innovation of Industry Structure / Inter-Industry cooperation / International Operations

Utilize RFID on Supply Chain Management

Utilize RFID in Four IndustriesObjective

FY2005FY2004FY2003


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Case Study of RFID Application in Retail Industry

Field Trial Project of RFID Application at Mitsukoshi

• Overview of Mitsukoshi• Characteristics of Japanese Department Store• Issues Facing Ladies’ Shoes Retailers• Information sharing among

Makers/Wholesalers/Retailers in real time• Process flow of Ladies’ Shoes• Summary of the RFID Trial Project at Mitsukoshi


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Field Trial Project of RFID Application at Mitsukoshi

Established: Year 1673Incorporated: 6th December 1904Capital: \37.4B ( 273M Euro)Sales Revenue: \888B ( 6.6B Euro in FY2004 Consolidated)　

Selling floor space: 533,000㎡

Number of Employees: 7,904（11,425 Consolidated Y2004）

Overview of Mitsukoshi

Source: Mitsukoshi


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Characteristics of Japanese Department Store

Gross Margin Ratio

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5

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35

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45

Europe USA Japan

Gross Margin Ratio

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35

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45

Europe USA Japan

Inventory Turnover Ratio

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Europe USA Japan

Inventory Turnover Ratio

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Europe USA JapanUSA Japan

Sales per square meter

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Europe USA Japan

USA Japan

Sales per square meter

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Europe USA Japan

3.5 times that of USA 7.5 times

that of USA

1. Attentive customer care2. A rich variety of merchandise3. Short life cycle of merchandise

- Comparison of Sales Efficiency among Department Stores in Europe, USA and Japan -

Strengths of Japanese Department Store

Source: Mitsukoshi

(%)(Times/year) (\K)


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Issues Facing Ladies’ Shoes Retailers

< Characteristics of Goods >< Characteristics of Goods >Wide Variations in size ( 6 sizes on average )Wide Variations in size ( 6 sizes on average )Requiring inventory spaceRequiring inventory spaceNot distinguishable, as seen from the outside of boxNot distinguishable, as seen from the outside of boxShort life cycle according to seasonality or trend in fashionShort life cycle according to seasonality or trend in fashion

< Store characteristics >< Store characteristics >Need of going to backyard for checking availability of sizesNeed of going to backyard for checking availability of sizesNeed of enough trial fitting Need of enough trial fitting Sales opportunity loss due to unavailable sizesSales opportunity loss due to unavailable sizes

　 < Industry Characteristics >< Industry Characteristics >Heavy workload on inventory checkingHeavy workload on inventory checkingHuge distributorHuge distributor’’s inventory due to the large number of itemss inventory due to the large number of itemsDifficulty in control of inventory due to seasonal function inDifficulty in control of inventory due to seasonal function inshipping/receivingshipping/receiving

Decided to try RFID PoC test in ladiesDecided to try RFID PoC test in ladies’’ shoes shoes because issues are clear and quick return on investment is expecbecause issues are clear and quick return on investment is expectedted


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　 Information Sharing among Information Sharing among Makers/Wholesalers/Retailers in real timeMakers/Wholesalers/Retailers in real time

Maker

InternetInternet

Wholesaler

Receiving

Shipping

Department Store Taking Stock

Inventory Check

Source: Mitsukoshi


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Process flow of Ladies’ Shoes

Retail

Receiving Inspection

Sales RegistrationDetaching Tags (Reuse)

Search via PDA

Inventory

Ledger

Maker Wholesaler

Shipping InspectionShipping Linking Attaching

TagsInventory

Mgt.Receiving Inspection

　Ｉ　　　Ｎ６　　　Ｎ１　　　Ａ　

Ｉ１　　　Ｉ２　　　Ｉ３　　　Ｉ４

Customer Self Service

Source: Mitsukoshi


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[ Summary ] Trial period: 12 October 2004 – 20 December 2004 ( previous data )

• Query from terminal : 28 / person / day (10/person/day Note: out of inventory)

• Round trip to backyard : 15 / person / day ( reduced from 20 / person / day )

• Service time per customer: 6 minutes / customer / (13 minutes / customer )

• Number of merchandise introduced : 3.1 / customer (1.7 / customer )

• Sales : 10% growth from the previous year

[ Summary ] Trial period: 12 October 2004 – 20 December 2004 ( previous data )

• Query from terminal : 28 / person / day (10/person/day 28 / person / day (10/person/day Note: out of inventoryNote: out of inventory)

• Round trip to backyard : 15 / person / day ( reduced from 20 / person / day )15 / person / day ( reduced from 20 / person / day )

• Service time per customer: 6 minutes / customer / (13 minutes / customer )6 minutes / customer / (13 minutes / customer )

• Number of merchandise introduced : 3.1 / customer (1.7 / customer )3.1 / customer (1.7 / customer )

• Sales : 10% growth from the previous year10% growth from the previous year

[ Feedback from sales clerk ]Benefits-- Ease of use compared to barEase of use compared to bar--code reader ( just hold a reader over tags)code reader ( just hold a reader over tags)-- Due to realDue to real--time inventory access, alternatives can be offered on the spottime inventory access, alternatives can be offered on the spot

Issues-- About 1% inaccuracy of data during a twoAbout 1% inaccuracy of data during a two--week trial led to extra workloadweek trial led to extra workload-- Difficult to identify broken tagsDifficult to identify broken tags

Summary of the Mitsukoshi Trial Project

Source: Mitsukoshi


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Summary of the Mitsukoshi Trial Project (continued)

[Production Status ] 26 April 2005 - 30 July 2005Note: The figure in parentheses indicate previous data

• Commenced : 26 April 2005

• Merchandise : 13 brands, 1,000 faces, 6,500 pairs

• Store : Nihonbashi 1st Floor ladies shoes carrier zone

• Staff : Total 10 ( Average 7 / Day )

• Queries from terminal : 33 queries / person / day( 15 / person / day due to out of inventory )

• Service time per customer : 5 minutes 35 seconds ( 13 minutes )

• Sales (Compared with last year) : May +9.9%

June +22.2%

July +25.4%

[Production Status ] [Production Status ] 26 April 2005 26 April 2005 -- 30 July 200530 July 2005Note: The figure in parentheses indicate previous data

•• CommencedCommenced : : 26 April 200526 April 2005

•• MerchandiseMerchandise : : 13 brands, 1,000 13 brands, 1,000 facesfaces, 6,500 pairs, 6,500 pairs

•• StoreStore : : Nihonbashi 1Nihonbashi 1stst Floor ladies shoes carrier zoneFloor ladies shoes carrier zone

•• StaffStaff : : Total 10 ( Average 7 / Day )Total 10 ( Average 7 / Day )

•• Queries from terminal : Queries from terminal : 33 queries / person / day33 queries / person / day( 15 / person / day due to out of inventory )( 15 / person / day due to out of inventory )

•• Service time per customer : Service time per customer : 5 minutes 35 seconds ( 13 minutes )5 minutes 35 seconds ( 13 minutes )

•• Sales (Compared with last year) : Sales (Compared with last year) : May +9.9%May +9.9%

June +22.2%June +22.2%

July +25.4%July +25.4%

Source: Mitsukoshi

(Styles & colors)


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Summary of the Mitsukoshi Field Trial Project(continued)

[ Future Expansion of Ladies’ Shoes System]

• More brands in Nihonbashi store13 brands of one maker 23 brands of 3 makers (in July 2005)

• Launch in Ginza store3 makers, 26 brands ( in August 2005 )

• Introduction in Sapporo, Nagoya, FukuokaTargeted by February 2006

[ Future Expansion of Ladies[ Future Expansion of Ladies’’ Shoes System]Shoes System]

• More brands in Nihonbashi store13 brands of one maker 13 brands of one maker 23 brands of 3 makers (in July 2005)23 brands of 3 makers (in July 2005)

• Launch in Ginza store3 makers, 26 brands ( in August 2005 )3 makers, 26 brands ( in August 2005 )

• Introduction in Sapporo, Nagoya, FukuokaTargeted by February 2006Targeted by February 2006

[ Future Expansion of Application area other than Shoes System][ Future Expansion of Application area other than Shoes System]• Better customer care through changing the way of clerksBetter customer care through changing the way of clerks’’ servicesservices• Trial in apparel

Planning in MenPlanning in Men’’s wear and Jeans s wear and Jeans to use RFID in many itemsto use RFID in many items• Future enhancement from customer perspective

Customers do not use terminals Customers do not use terminals Inventory management function Inventory management function built in store fixturebuilt in store fixture

Source: Mitsukoshi


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Case Study of RFID Application in Publishing Industry

• Supply Chain of Publishing Industry and their Issues

• Incentives for adopting RFID

• Application Area

• Field Test for attaching RFID Tags to Books

• Field Test in Shipping & Receiving Process

• Flow of Test in Shipping & Receiving Process

• Field Test at Bookstore

• Summary of the Trial Project in Publishing Industry


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Supply Chain of Publishing Industryand their Issues

4,000 PublishingCompanies

Average ratio of unsold books return: 37%

74,800New Books/Year

74,800New Books/Year

Source: Japan Publishing Organization for Information Infrastructure Development (JPO)

Agents 18,200Bookstores

Customer(Reader)

Fixed Retail PriceFixed Retail Price


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Incentives for adopting RFID

Request of source tagging from bookstores- Adopt RFID Tags in order to prevent shoplifting

* Average annual amount of shoplifting damage;\2,120K (15.5K Euro ) / store

* Average annual sales revenue;\103M ( 752K Euro ) / store

- Attach RFID Tags to books in binding process

Establish a RFID study organization in the Industry( IC Tags Study Committee in JPO : Japan Publishing Organization for

Information Infrastructure Development )

JPO conducted the Field Trial Project as a project owner.

Source: JPO


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Application Area

Detect illegal transactions ( Shoplifting, Unauthorized unsold books return, Breach of official release date )

Realize efficient distribution and traceability

Optimize inventories in the industry

Stimulate new demands (Strategic Marketing tool )

Utilize RFID in Library


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1. Attaching RFID Tags on a page

2. Arranging all pages in a book.

3. Binding 4. Cutting 5. Finishing

Field Trial Test for attaching RFID Tags to Books

Objectives:- Verify throughput speed in the process line.- Verify breakage of RFID Tags through the process.

( pressure, high temperature, shock, signature, etc. )

Added RFID Tags attaching & reading process to the current binding process.

Source: JPO


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1. Shipping/Receiving Inspection2. Taking Inventory 3. Picking Inspection4. Issuing Slips5. Packing Inspection6. Settlement7. Returning process (sorting,

refinishing)

Testing accuracy in bulk-reading Testing reader accuracy at inspection of each book (hand work)

Testing reader accuracy at inspection of each book (line)

Field Trial Test in Shipping & Receiving Processes

Source: JPO


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Test-flow of Shipping& Receiving Process

Dummy BookWith RFID Tag

[ Receiving Inspection Test ]< New Process with RFID Tags >< New Process with RFID Tags >TableBelt ConveyerForklift Truck

Shipping/Receiving Inspection Test Model- PackingPallet, Corrugated Box, Collapsible Container, Bucket

- Contents of packageSingle/Mixed (Hardback Book, Comic Book, Magazine, Dummy Ｂｏｏｋ, etc.)- Packing Volume10, 40, 60

- Moving vehicle　 Table, Forklift Truck, Belt Conveyer, etc.- Inspection Unit

Book, Package

Packing

< Current Process >< Current Process >Visual Inspection with Visual Inspection with Receiving SlipReceiving Slip

Compare the efficiency

[ Picking Test ]

Receiving & putting on the shelf

Picking process Test Model- Shelf

Metal Shelf, Wooden Shelf- Packing style

Bulk- Setting　Flat, Vertical- # of Book- 50 - 100

[ Shipping Inspection/Shipping Test ]Picking and Packing

Antenna

Dummy BookWith RFID Tag

Passed Inspection!Hand Inspection withRFID Bulk Reading

RFID Reader

Shipping slip

Source: JPO


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Field Trial Test at Bookstore

期間：週間（12月12日～12月18日）種別男女別書籍はじめの一歩12巻

表示条件

週間伸び率グラフ（男女別）

立読

み回

数（

回）

書籍単体

伸び

率（

％）

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販売数（女性）

ヒット率(男性)

ヒット率（女性）

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率（

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販売

数（

冊）

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12月12日 12月13日 12月14日 12月15日 12月16日 12月17日 12月18日

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販売数（男性）

販売数（女性）

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ヒット率（女性）

伸び

率（

％）販

売数

（冊

）

ジャンル総合

閉じる月間

期間：週間（12月12日～12月18日）書籍はじめの一歩12巻

12月12日 12月13日 12月14日 12月15日 12月16日 12月17日 12月18日

棚在庫 15 14 14 13 12 10 8

倉庫在庫 18 18 18 18 18 18 18

表示条件

週間在庫推移

在庫推移

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12月12日 12月13日 12月14日 12月15日 12月16日 12月17日 12月18日

棚在庫

倉庫在庫在庫

（冊

）

閉じる

期間：週間（12月12日～12月18日）種別年齢層別書籍はじめの一歩12巻

表示条件

週間伸び率グラフ（年齢層別）

立読

み回

数（

回）

書籍単体

伸び

率（

％）

ヒッ

ト率

（％

）

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販売数（～18歳）

販売数（19～35歳）

販売数（36～50歳）

販売数（51歳～）

伸び率（～18歳）

伸び率（19～35歳）

伸び率（36～50歳）

伸び率（51歳～）

伸び

率（

％）販

売数

（冊

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販売数（～18歳）

販売数（19～35歳）

販売数（36～50歳）

販売数（51歳～）

伸び率（～18歳）

伸び率（19～35歳）

伸び率（36～50歳）

伸び率（51歳～）

販売

数（

冊）

伸び

率（

％）

ジャンル総合

閉じる月間

Books’ information, Browse-only rating, in Graphical Display

Sales processPreventing shoplifting

Growth rate, Hit ratio, Inventory, etc

Browse-only StatisticsSales process at cashier Referring Sales

information

Refer books information such as location

Collect marketing data such as browsing time statistics Secondhand Bookstore

Check sales flagand detect

books posted via illegal channel

Total Test including Marketing, Sales Management and Used-bookshop

Book order traceability

Source: JPO


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Summary of the Field Trial Projectin Publishing Industry

Increase Sales Revenue

Estimated111B Yen / Year

(810M Euro / Year)

Increase Sales Revenue


(810M Euro / Year)

Reduce Returned Books

Process CostEstimated

83B Yen / Year(606M Euro / Year)

Reduce Returned Books

Process CostEstimated

83B Yen / Year(606M Euro / Year)

Profit for BookstoresProfit for Bookstores

Source: JPO

Profit for Publishers & AgentsProfit for Publishers & AgentsProfit for all parties of the IndustryProfit for all parties of the Industry

Reduce Amountof Shoplifting Damage


( 336M Euro / Year )

Reduce Amountof Shoplifting Damage


( 336M Euro / Year )

Optimization of Volume of Books in Supply Chain

Saves Inventory CostEstimated

340B Yen / Year( 2.5B Euro / Year )

Optimization of Volume of Books in Supply Chain

Saves Inventory CostEstimated

340B Yen / Year( 2.5B Euro / Year )


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Thank you for your attention !

E-mail to: [email protected]

Case Studies of RFID Application - OECD.org - · PDF file · 2016-03-29Case Study...

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