Deployment / Rollout: Rolling out to the network. It is envisioned that rollout should be as fast as possible in order to realize a quicker Return on Investment. A critical preoccupation is also to avoid the coexistence of several processes and to drop legacy processes as soon as possible.
Building the business case: Network size is the multiplier
A quasi consensus emerges in the Fashion Apparel & Textile Industry: With tag prices at about 10 cents per unit, and reading accuracy at 98-99%, RFID applications in the store offer a compelling business case.
Better inventory management and better re-stocking generates additional revenues, reduced % of missed sales, and lower shrinkage.
Cost savings are mainly generated in the Warehouses / Distribution Centers.
Initiative related costs include: Investment in hardware facilities, middleware, integration, RFID tags, and roll out costs (training, implementation, etc)
Obviously, the larger the network the higher the return. Proactive companies are considering rolling out to their whole network as quickly as possible.
Other potential benefits not covered in the analysis are: Better staff time allocation in the stores, reduction of transportation costs, and specific processes automation at the DC level (such as increased automatic picking).
Taking the RFID issue from the boardroom to reality
Moving from market observation to development of a business case is typically a Management Team initiative.
Typically, the role of the CEO is to initiate the business case, to assess the results with the Management Team in terms of competitive advantage and created value, and to decide whether or not to launch a pilot.
Senior Executives involved are most often the Chief Operating Officer, the Logistics Manager, the CTO or IT Manager, and the CFO. In the case where a Network Manager is in the organizational matrix (the person who manages the stores network) this individual is also involved.
Most often, Fashion Apparel and Textile industries have built lean organizations, based on an intimate knowledge and control of their processes and metrics. They therefore tend to develop their business cases internally, with limited or no help from external parties such as consultants.
Conclusions: RFID at the turning point
The Fashion Apparel / Textile Industry is at a crossroad in terms of RFID applications.
Obviously, in the short term, store-level applications are seen as the most promising ones mainly because of their direct impact on customer satisfaction and revenues.
RFID represents a new opportunity for delivering value to both customers and shareholders. They try to maximize value by adopting an end-to-end approach to RFID adoption.
