RFID Pilot Project: Tagging High-Value Consumer Electronics

As part of GS1 Italy’s i.Trace initiative, Mediamarket, a leading European electronics retailer, in partnership with DHL, Sony, and Samsung, recently completed a successful pilot of EPC-enabled RFID technology for high-value consumer electronics.

The project aimed to study the benefits of tagging a wide range of valuable consumer electronic products—some of which were small and particularly susceptible to theft and loss.

At the start of the pilot, 55 SKUs from Sony and 34 SKUs from Samsung were selected.  In total, over 10,000 units were tagged, including notebooks, digital cameras, video games, and mobile phones. Linda Vezzani, EPC Specialist for GS1 Italy, noted how these products are more difficult to process from an RFID perspective. “They are small and contain a higher quantity of metal parts,” says Vezzani. “All of this makes the traceability of these products particularly complicated all the way through the chain.”

The operation begins with Mediamarket’s logistics provider, DHL, receiving products from Samsung and Sony at two high-value warehouse locations. Upon receipt, products are inspected, wrapped, and put away into storage.

For this pilot, products bound for Mediamarket’s Saturn store in the Le Due Torri di Stezzano shopping mall are tagged at the warehouse. In a process known as “thermo-retraction,” the tag is activated, read, and associated with a product’s serial number.

Multiple smaller units are associated with the EPC code attached to a larger carton, and reading the tag on that carton will automatically identify the SKUs and units inside it. Cartons bound for the same store are put on a pallet that also has its own tag that identifies the cartons on that pallet.

A lift truck driver transports completed pallets through a dock door portal equipped with an RFID reader. By moving through the portal, the system automatically reads the tags and records the quantities and serial numbers of each SKU that is being loaded into the truck.

At the store’s receiving dock, inbound pallets are again transported through another gateway portal and are automatically received. A second gateway portal between the store’s backroom and the sales floor automatically traces and records the individual serial numbers that are being moved to the store floor.

In the warehouse, this RFID pilot resulted in a 30 percent reduction in the time it took to process store shipments. Shipping accuracy improved while enhancing the security of the supply chain leading to fewer losses, while inventory managers now have better visibility to potential “stock-out” events. In addition, the shorter cycle time to stores meant that products make it to the store’s shelves quicker.

At the Saturn store, receiving operations are automatic and much more efficient. Inventory visibility into backroom stock and the stock on store shelves is also improved, and store employees who used to scan and manually count inventory are now focused on making sales. Considering the effects not only in terms of efficiency, but also effectiveness, the payback period for the RFID investment could be achieved within a few months.