How to RFID-Tag Apparel and Benefit Internally

Wal-mart stores and several other major U.S. retailers are moving forward with projects that use radio frequency identification (RFID) to track apparel items in stores. Retailers that manufacture their own goods, such as American Apparel, can apply RFID tags at the point of manufacture and achieve efficiencies throughout the supply chain. But those that sell apparel from different manufacturers have been tagging items either in their distribution centers or when the goods arrive at the stores. The process is slow, labor-intensive and inefficient, so they would like to see their suppliers do the tagging. Wal-Mart Stores, for example, is working with suppliers of men’s jeans and basics (socks, undershirts and underwear) to track items with EPC RFID tags.

At the same time, some forward-looking apparel manufacturers are choosing to adopt RFID in their manufacturing and distribution facilities. Several case studies of apparel suppliers that have tagged merchandise at the point of manufacture—including the Charles Vögele Group, Lemmi Fashion and NP Collection in Europe—show that there are benefits for suppliers, including: better tracking of goods made by third-party manufacturers in Asia, reduced time and labor to receive goods into warehouses, and improved packing and shipping accuracy. (For more information, see “Internal Benefits” on page 14 of the report.)

Momentum is growing for item-level tagging, for a number of reasons. Tags costs have fallen up to 40 percent over the past 18 months, and technological advances have addressed concerns about tag readability. In addition, research pilots, such as the study by the University of Arkansas’ RFID Research Center regarding RFID’s impact on inventory accuracy, are propelling retailer adoption. In November 2010, Voluntary Interindustry Commerce Solutions (VICS) and standards groups GS1 US and GS1 Canada announced the launch of the Item Level RFID Initiative, which brings together apparel manufacturers and retailers—including Conair, Dillard’s, JCPenney, Jockey, Jones Apparel, Levi Straus, Macy’s, VF Corp. and Wal-Mart—to develop a roadmap for the adoption of RFID at the item (see page 66). And in January, a report released by the University of Arkansas’ Information Technology Research Institute (ITRI) identified 60 unique business cases for the use of item-level RFID in the supply chain, as determined by apparel suppliers (see page 63).

A recent survey by the Aberdeen Group found that 57 percent of retailers are using or plan to deploy RFID at the item level. According to its report, “Item-Level RFID Tagging in Retail: Improving Efficiency, Visibility, Loss Prevention, and Profit,” the Aberdeen survey included 125 executives, managers and other personnel working for retailers in North America, Europe and Asia; these firms represented retailers of apparel, furniture, jewelry and pharmaceutical products, as well as operators of big-box stores.

Whether you decide to RFID-tag items to improve your own internal efficiencies and/or to better serve your customers—retailers would like suppliers to tag voluntarily—item-level tagging is on the road to becoming an established practice in the apparel industry. RFID Journal’s “A Guide for Apparel Manufacturers: How to RFID-Tag Apparel and How to Benefit Internally” is designed to help you save time and money as you deploy RFID technology in your manufacturing and distribution facilities.

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