Levi´s Study Case: EPC / RFID Implementation
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Transcript of Levi´s Study Case: EPC / RFID Implementation
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GS1 MéxicoLevi´s Study CaseEPC / RFID Implementation
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Agenda
• 1.1 Company Profile
1. Levi´s
• 2.1 Background• 2.2 Issues Identification
2. Business Need
• 3.1 Origin• 3.2 Scope• 3.3 Timeline
3. Scope / Pilot
• 4.1 Implementation of EPC / RFID • 4.2 Benefits
4. Solution
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1. Levi´s
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1.1 Company Profile• Multinational
manufacturer known as the inventor of the first pair of jeans.
• They have 2 sub-brands: Dockers and Denizen.
• Levi´s employees up to 5,000 employers in over 110 countries.
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2. Business Need
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2.1 Background
“We manufacture the merchandise within our 50 distribution centers, which turns the work difficult, and exhausting to keep an eye of every single product through
the whole supply chain”.
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2.2 Issues Found
I.
Inventory
II. Lack of
Information
III. Supply
IV. Financia
lI
•20% discrepancy between the physical inventory and the levels reported in system.
II •Lack of detail such as color & sizes.
III •Inventory supplies in stores of over 4 months.
IV •Sales don´t match the expectations of high inventor levels.
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3. Scope/Pilot
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3.1 Origin of the Pilot• On 2005, Levi´s made up its decision to
implement the RFID / EPC technology into one store so they could pilot it. After 6 months, they found out that the results exceeded the primal objectives.
2005 Pilot´s
Kick Off
6 Months40%
reduction in out
of stocks items.
2006Extende
d the pilot in 2
more stores.
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3.2 Scope
I. Reduce inventory levels to, at most, 2 months.II.Reduce the % of out-of-stocks items.
III. Increase sales. IV. Accurately manage replenishment automatically generated with EPC / RFID tech.
Financial
I. Fully integrate EPC/RFID technology into the DC operation.
II. Implement EPC/RFID technology-based operations in stores: goods-in, sales, returns, exchanges and inventory management.
Operatives
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3.3 Timeline
2005- Pilot Start
2006- Pilot extension to 10 additional stores.
2007-2009- Implementation in remaining stores.
2010- 100% of stores use EPC/RFID technology.
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4 EPC / RFID Implementation
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Once it´s known that the benefits are out there, Levi´s decided to
gradually integrate the RFID solution into the remaining
stores.
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First, the Distribution Center receives the PO, based on the results brought automatically by the store, asking just for what they really need to be stocked.
•
Every single pair of jeans, has its
own SRFID!
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Secondly, in order to validate the shipping; a web portal was previosly created to verify and scan such things like weight, net content and the Serial Number.
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The POS receives the Advance Shipping Notice before the arrival of the merchandise. Once the items have arrived, a mobile RFID device validate the information avoing to open the boxes to check out what´s inside. The information matches automatically with the POS data and updates the inventory.
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Finally, as a consumer experience and a Marketing strategy; they set up a new device to help the customers to fully interact with the store. An Intelligent Mirror allowing them to pick up a garment and see through the reflection how it would fit in it and how it looks in different colors.
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4.1 EPC / RFID Implementation
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4.2 Benefits
Benefits
Sales
Store Invent
ory
Replenishment in
Stores
Out-Of-
Stock
Financial
- Increased by 11%- Improved availability
of products.- Enhaced consumer
buying experience .
-Increased efficiency via fulled automated replenishment.
- Improved ability to verify the accuracy of work in warehouse.
- Increased hours of operation and
opportunities for more sales through the
elimination of store closings for inventory and replenishment.
-Reduced lost sales by 40% due to reduction
in out-of-stocks merchandise.
- Reduced inventory in stores from 4 to a 2-
months supply. - Improved inventory
accuracy to 99% - Removal of innactive
products.- Provided more
complete and detailed inventory view.
- Reduced transport costs, typically
qualified as “wait times”.
- Increased efficiencies in DCs
- Optimised logistics operations, achieved by distribution to a higher number of
stores per day.
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“Technology as an enabler, on its own, doesn’t really do
anything. You must effectively integrate RFID into a store’s
operations for it to be useful”Abel García, Director of IT, Levi´s Latin America
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Thank you