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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
All Rights Reserved. Copyright © Next Generation Electronic Commerce Promotion Council of Japan (ECOM) 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
0
5
10
15
20
25
30
35
40
45
Europe USA Japan
Gross Margin Ratio
0
5
10
15
20
25
30
35
40
45
Europe USA Japan
Inventory Turnover Ratio
0
5
10
15
20
25
Europe USA Japan
Inventory Turnover Ratio
0
5
10
15
20
25
Europe USA JapanUSA Japan
Sales per square meter
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Europe USA Japan
USA Japan
Sales per square meter
0
200
400
600
800
1000
1200
1400
1600
1800
2000
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(
%)
0
20
40
60
80
100
120
140
160
180
200
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
0
10
20
30
40
50
60
70
80
販売数(男性)
販売数(女性)
ヒット率(男性)
ヒット率(女性)
伸び
率(
%)
販売
数(
冊)
0
20
40
60
80
100
120
140
160
180
200
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
0
100
200
300
400
500
600
700
800
販売数(男性)
販売数(女性)
ヒット率(男性)
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
0
2
4
6
8
10
12
14
16
18
20
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
(%
)
0
20
40
60
80
100
120
140
160
180
200
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
0
5
10
15
20
25
30
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
)
0
20
40
60
80
100
120
140
160
180
200
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
0
50
100
150
200
250
300
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
Estimated111B Yen / Year
(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
Estimated46B Yen / Year
( 336M Euro / Year )
Reduce Amountof Shoplifting Damage
Estimated46B Yen / Year
( 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]