Avery Dennison: American Apparel RFID Case Study



young metropolitan islands in a city with disposable income and under penetrated fashion it's the target market for American economy making high-quality fashionable basic apparel with broad potential appeal the company is now the largest clothing manufacturer in the u.s. made downtown early growth has been explosive from three stores in the u.s. in 2003 there are now more than 300 stores around the world retail sales of 341 million dollars in 2008 a 62 percent increase of 2007 American Apparel is a fashion sensation but the company remains ambitious American Apparel is developing all aspects of its business an expanded product range improved systems and supply chain management and a desire to improve the performance and productivity of the stores at American Apparel we utilize a boutique style model as you will notice there's only one of every size color and style available at one time this means that replenishment and the speed of the replenishment become very critical part of the culture at American Apparel is the ability for our customers to come in and know that their size color and style will be represented on the sales floor American Apparel's practice has allowed the company to offer customers more items per square foot of store space however it did not provide for safety stock on the sales floor and created to two distinct challenges our initial challenge was to find the 10% of stock that was lost in our stock room and not represented on our sales floor the second challenge was to give real-time visibility to our stockroom staff of items that were displaced off our sales floor and needed to be replenished an innovative solution was proposed RFID the solution consisted of RFID inlays printers and tags from avery dennison rfid handheld and portable readers and antennas and in-store inventory tracking software step one called for attaching RFID enabled tags to every item this was accomplished using avery dennison ad triple to tags chosen for their consistency and accuracy step two involved establishing four RFID stations at key in store locations to track inventory the receiving station is the primary place where we bring product into the store so anything that's coming from the factory from another store we're going to bring that down to the receiving station and use that station to move it into back stock the employees are actually using the system to tell the entire system where the product is at that time the fill station is the place in the back stock where the employees inform the RFID system what they're taking to the sales floor it informs them what needs to go to the sales floor and then it gives them an interface to inform the system what they're actually taking to the sales floor the validation point is the place usually somewhere between the back stock and the sales floor where the work that they've done at the fill station is checked and validated so it will inform the employee if they haven't brought up the correct amount of items if they brought up items that they didn't inform the system that they were taking up for us the validation point make sure that what they intend to bring up is actually going up and informs the employees that they're doing their job correctly the final RFID station is the point of sale at the point of sale we're able to read the RFID tags instead of having to barcode scan each individual tag which speeds up the process for the customer as well as driving the replenishment for the RFID system this is where we inform the RFID system that those items are now no longer on the sales floor and we need to replenish it from the back stock so the sales floor inventory and the stockroom inventory are separate accurate and instantly updated at the item level this ensures that 100% of the items in the store are available on the sales floor giving the customer the best choice and maximizing sales but the system has many unexpected benefits the old system of replenishing the sales floor required the sales staff to show up early and come in and manually count all the items on the sales floor this would take five to six employees five to six hours with the new system of the RFID system we're able to count the entire sales floor in under two hours and validate and replenish gives you a lot more time to work with the customers since you don't worry about the merchandise stocking so much the efficiency is just as high on a very busy day as a day that's just a normal level of customer activity if something gets sold and it's no longer on our floor it's usually no more than 30 seconds to a minute before it's back upstairs the most important benefit we have found and the easiest to measure is the 14% sales look we've seen it the RFID stores compared to the non RFID stores this is due to the fact that we have more items on display for the customers and we have improved customer service at the RFID stores oh no I don't want to go back to the old system ever this the RFID system works amazingly and everyone should have it American Apparel has no doubt about the use of RFID technology it is a technology that can benefit all retailers and the avery dennison is uniquely suited to support businesses wanting to explore or implement RFID initiatives avery dennison is currently supplying over 90% of the tags used for apparel rfid worldwide these are used by some of the industry's largest retailers and Brandon's you

Leave a Reply

(*) Required, Your email will not be published