The cost factor
Kaufhof's RFID project manager Quiede told ZDNet Asia that since implementing RFID, the company has seen process efficiencies improve by 12 to 17 percent, out-of-stock situations have reduced by 9 to 14 percent, and shoplifting incidences have lessened by 11 to 18 percent.
He expects to see payback on the RFID investment in less than two years from now. However, the system is still not ideal, yet.
Kaufhof currently uses reusable RFID tags, because single-use tags are too expensive, said Quiede. Each tag that comes with a theft-protection feature costs about 40 euro cents (US$0.50).
Although it is cheaper to recycle tags, single-use tags are a more viable option as the process of collecting tags for re-use by suppliers around the world is quite troublesome, he explained. "When the tag price comes down to (around 10 euro cents), we will consider switching from reusable tags to single-use tags."
As to whether Kaufhof would expand the scope of the project to other departments, Quiede said: "Our current focus is Germany and for garments only. We will consider using RFID for the rest of our merchandise when the tag becomes cheaper and technical barriers have been resolved."
Revving up for Asia
Siemens in Germany is keen to port its RFID know-how to Asia, where interest in the technology is growing. The company in July consolidated its RFID services across various business units in order to cater to different industries. It is now able to provide RFID consulting and integration through Siemens Business Services, hardware through Siemens Automation and Drives; and middleware through Siemens Logistics and Assembly Systems.
Jeff Loo, systems integration manager of solutions business at Siemens Business Services Singapore, observed: "There's a lot of interest around Asia in RFID technology. Compared to the European market, the RFID market in Asia is just booming and a lot of companies are only just starting to seriously look into RFID as a process enabler and how it can be integrated into their existing processes.
"The project implementation in Kaufhof provides important validation that the benefits of RFID can be exploited and that RFID is not just another industry buzzword," he added.
Loo is keen to extend what they've learnt from the Kaufhof project, such as the potential pitfalls that could plague an RFID deployment. "By sharing our experience in Europe, we can minimize the risk exposure of our Asia-Pacific customers," he noted.
Siemens Business Services is now offering its consulting and integration services to companies ranging from public sector organizations to private enterprises in industries such as manufacturing, healthcare and hospitality. He hopes "to help them understand how RFID can be incorporated into their processes".
Island slings into RFID
Singapore has been championing RFID for many years now, starting in 1998 when the National Libary Board (NLB) used RFID to manage its libraries and the Land Transport Authority (LTA) introduced the electronic road pricing system. Last year, the Infocomm Development Authority of Singapore (IDA)
injected S$10 million (US$5.9 million) to promote the adoption of the technology.
The months of June and July 2005 witnessed a spate of RFID activities in the island state, including a collaboration between Sun Microsystems and transportation company Neptune Orient Lines, and the unveiling of a new RFID tag with read/write data storage capabilities by the country's lead research institute.
Between September 2004 and June 2005, five key users from logistics company YCH, together with nine consultants from Y3 Technologies and Oracle, implemented the RFID IHF frequency band 923-925MHz into its operations and subsequently integrated the system to its warehousing and inventory management system. Y3 is an affiliate company of YCH.
The system consists of RFID fixed readers with four antennae and hand-held RFID readers that are used during inbound, storage and outbound activities to capture information about the cargo goods faster and more efficiently, so as to improve turnaround time. With the system, YCH is now able to better control tasks such as inventory stocking and tracking, handling, packaging and labeling of high value and controlled inventory like wines and spirits within its bonded warehouse.
"The implementation also covers the area of cycle counting and ensures that the stock-taking process is done quickly and that any variance can be resolved efficiently," said James Loo, Y3's chief operating officer.
A bonded warehouse is an area approved by customs authorities to store controlled items, such as cigarettes or alcohol, for re-export or for local consumption.
Play video
There are currently no comments for this post.