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Global Logistics Focus Sept.21, 2015

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12A THE JOURNAL OF COMMERCE SEPTEMBER 21.2015 SPECIAL REPORT GLOBAL LOGISTICS FOCUS 2015 Mart. A wave behind is a group of other retailers that are lagging, but quietly looking at pilot programs. "Some companies are using RFID" to manage their inventories, "but it is nowhere near the critical mass yet," said Joe Andraski, a former vice president of supply chain at Nabisco, and former president and CEO of the supply chain standards organization Voluntary Inter- Industry Commerce Solutions. Rather than embark on RFID initiatives, "many companies are overthinking" their decisions. "You drive yourself nuts," evaluating and re-evaluating what makes sense, he said. Senior management in many com- panies is trying to be careful about undertaking any new risky new tech- nology, Andraski added. "There is no doubt that RFID technology works" and that RFID tags are a lot cheaper than in the past. But many "people are looking for a lot of reasons not to do anything," he said. Rather than succumb to the paral- ysis of doing too much analysis about the positive impact on sales, Andraski suggested companies take a holistic look "to see the fi nancial payback of RFID. If we really knew the impact on lost customer sales that result from a product not being at the right place at the right time, it would turn out to be a very large number." It also would be useful to try to understand "how much time we lost" by not implementing the right con- fi guration of RFID to suit the needs in any particular case, he said. Those metrics aren't easy to calculate. Nor is it easy for companies to measure the precise impact of today's measures on their ROI down the road. R FID "technolog y is continually evolving," Andraski noted, and no sin- gle confi guration of technology works for every retailer. "The bottom line is that the retailer and (technology) pro- vider have to get together to see what works better" in their particular situ- ation. "You cannot take one brush and cover everything with it. You have to understand what you are dealing with in any particular case." JOC Contact Alan M. Field at alanfi APPAREL AND FOOTWEAR retailers aren't the only companies that have learned to appreciate the potential benefi ts of RFID systems. Take, for example, the case of Interstate Batteries, the lead- ing brand of auto-replacement batteries in North America. Based in Dallas, Interstate sells more than 17 million SLI (starting, lighting and ignition) batteries through its distribution network of 300 wholesale warehouses, which supply, in turn, some 200,000 dealers in the U.S., Canada and elsewhere, Beyond selling auto-replacement batteries, Interstate sells 16,000 other types of batteries for marine, commercial/fl eet, motor- cycle, lawn and garden, and other products. Like apparel retailers, Interstate sells a vast array of products to end-users with all sorts of needs and tastes. Moreover, much like apparel retailers, Interstate's retail brand depends not just on product quality and price, but also on "making sure dealers are well supplied with the products they need," said Bruce Hellen, Interstate's director of business practices. In a landmark pilot project that began in 2013, Interstate Batteries demonstrates how the instal- lation of passive RFID systems can help manage consignment or vendor-managed inventories in remote locations. The challenge was how to replenish the inventories Interstate Batteries consigned to its distributors when those inventories weren't fully visible. Item-level tracking, made possible by RFID at the point of sale, made it possible for Interstate's distributors to know when to reorder their stock of batteries, while tracking which products had expired or become obsolete. The pilot program also enabled Interstate and its dealers to measure lost sales due to stock- outs and the overstock of slow-moving SKUs, while reducing the cost of making unnecessary replenishments, and evaluating the complexity of regulatory and compliance tracking. The pilot program involves the deploy- ment of 2 million RFID-tagged batteries, displayed on 2,200 RFID-enabled storage racks, and delivered to distributors in 29 RFID-enabled trucks. From a technical viewpoint, RFID has come a long way in the decade since Wal-Mart unveiled its supply chain mandate for consumer goods, said Harley Feld- man, founder of Seeonic, the Minnesota-based provider of RFID systems for managing inventory. One of the main challenges was that the batteries are fi lled with lead and liquid, which combine to make a diffi cult environment for reading RFID signals. Seeonic's patented Eye reader antenna (a 4.5-by-5.5-inch antenna designed to be low-cost) overcame these challenges, according to Hellen. "The question of reliability has long since been resolved," Feldman said. "It runs at 99.8 percent reliability." The pilot also has shown a measurable impact on the bottom line of Interstate's distribu- tors. "It's been a tremendous achievement. We've "The question of reliability has long since been resolved. It runs at 99.8 percent reliability." RFID PUTTING A JOLT INTO

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