Speed to Market

RFID at Liz ClaiborneSolving an Internal Distribution Issue

Brian O’Donnell7/22/04

Driving RFID Driving RFID

Compliance Return on Investment Solve an internal

requirement / issue

ComplianceCompliance

Compliance mandates are driving the majority of all RFID implementations– To meet this challenge, corporations are

utilizing RFID in the last steps in the distribution process.

• Potential save/return for the originating corporation is limited.

• Many are not reaping any benefit in the implementation

ROIROI

Cost of chips still in the $.30 - $.45 range– To be financially attractive

• Cost per tag / unit must be in the $.015 - $.02

– Need ability to drive down cost of usage• Reuse tags• Increase the quantity per tag

Additional cost must also be factored in

Additional Costs Additional Costs

Reader - $1,000 - $10,000 Software

– Middleware– Modifications to current platform to

accommodate data Conversion Cost

– Attaching tag to item– Associating a tag with a number

Integration Costs– Modifying current systems to handle large amounts of

data Ongoing Maintenance

Reuse tagsReuse tags

Tags can be applied to reusable items– Pallets– Totes– Trolleys

Solve Current Material Handling Solve Current Material Handling ProblemProblem

Identify an area within the supply chain that would benefit from the technology– Traditional methods are not meeting

requirements• Barcodes• Automation• Manual operation

RFID vs. BarcodesRFID vs. Barcodes

BARCODE Read one barcode at a

time

Requires line of site

Information fairly limited – do not track sku’s uniquely

Can’t update information on a label

RFID Read multiple ID’s

simultaneous 1000’s per second

Does not require line of site

Store more information

Ability to write/update information on a tag

Problems with RFIDProblems with RFID

Tags are still very expensive– Chip based tags: $.30 - $.45

Standardization of EPC not finalPrivacy ConcernsPaybacks are still risky

Solving an Internal IssueSolving an Internal Issue

Conventional GOH TrolleysConventional GOH Trolleys

Trolleys are utilized to transport garment on hanger goods through out the distribution center

Diverting is controlled by a switch manually set on a trolley

Divert mechanisms are preset for

Conventional Trolley SystemConventional Trolley System

Problems with Conventional TrolleysProblems with Conventional Trolleys

Pins are constantly breaking– Ongoing maintenance

Bent trolley cause misdivertsDivert mechanism are constantly out

of alignmentDestinations are limited

– 50 distinct locationMulti pin trolleys are expensive

Solve Issue with Barcodes?Solve Issue with Barcodes?

Cost of implementation is high– Scanner at each divert point

Barcodes consistently are damaged

Misreads are high Requires additional interfaces

with WMS

Utilized SmartTrak. SmartTrak is an RFID

based routing system using Read-Write tags embedded in the trolley.

First Distribution center in the US to utilize RFID to route trolleys

Each trolley knows its destination, and at each switching point, tells the switch to open or not.

Issue solved with RFIDIssue solved with RFID

Programming the TrolleyProgramming the Trolley Targeting the trolley.

– Hand Held version.• The operator sets the destination with a portable

programming unit by simply keying the desired location and pressing the enter button on the programmer while pointing the unit at the trolley.

– Touch Screen version.• The operator presses the destination on a display

and each trolley is programmed for the selected destination.

– The trolley is now programmed with the desired location. The trolley now may be inducted onto the overhead garment conveyor randomly.

DivertingDiverting

Diverting. When the trolley comes into the range of the antenna, the destination is read from the programmable computer chip.

– If the Destination code contained in the chip matches the destination code for the antenna, the switch is opened for the trolley.

Liz Claiborne - CincinnatiLiz Claiborne - Cincinnati

Cincinnati FacilityCincinnati Facility Located in West Chester, OH 900,000 Sq. Ft. Opened August 2002 Product Mix - Accessories and Apparel Design Capacity - 32.5 mm Units GOH Storage Capacity – 1.5mm Units Technology Deployed

– Cross Belt Sortation– GOH Sortation– High Speed Carton Sortation– SmartTrak

Smarttrac SystemSmarttrac System

The TagThe Tag

Read/Write incased in glass.

Operates on the 134.2 kHZ Frequency

Dimensions ~ ¼ ” x 1 ¾”.

Range +/- 3” when used in a trolley.

Live cycle >100,000 writes.

Cost about $3.50 each.

Tag, not to scale.

Tag embedded in trolley.

ReceivingWrite Station

3 Level MezzanineTransfer Station

Divert Points

Empty TrolleyWrite Station

Write Station/Divert Point

AdvantagesAdvantages

No moving mechanical parts to jamb or break in the reader.– Durable transponder is

embedded in the trolley.Distributed switching

application highly robust as encoders and tracking PLCs are not required.

Advantages con’tAdvantages con’t

Virtually unlimited number of destinations possible

The system works with a lighter duty, less expensive trolley than those required with conventional pin readers

Less expensive and more reliable than a barcode based application

ConclusionConclusion

RFID as a technology by itself will not be the end all solution.

Companies must redefine their operation and make smart decisions of where this technology is applicable.