Though it wasn't cited as one of Wal-Mart's Top 100, Victory Land Group, Inc. (VLG), a Schaumburg, IL, furniture manufacturer and importer, became one of only 37 suppliers to volunteer for early inclusion in the radio-frequency identification (RFID)-tagging program with Wal-Mart, in an advanced initiative with electronic product code (EPC) technology.
VLG had until 2006 or 2007 to begin shipping Wal-Mart EPC-tagged merchandise, because it wasn't part of the first wave of 100 suppliers required by the big retailer to do so by Jan. 1, 2005. But its plan for RFID compliance was to start early and work fast. It also had plans to construct a new distribution center. Even though it had no experience with RFID, VLG saw that building a new production facility could be an opportunity to establish RFID capabilities from the ground up. So in August 2004, VLG committed to shipping RFID-labeled merchandise to Wal-Mart beginning in 2005.
Knowing that it would have to begin labeling its furniture shipments with RFID smart labels soon anyway, VLG figured that it might be wise to get a head start. But it still faced an uncertain path to becoming EPC-compliant. Like many suppliers and packagers facing an RFID mandate, the company wasn't sure how it was going to meet its RFID needs.
Working with Zebra Technologies (www.rfid.zebra.com) and R4 Global Solutions (www.r4gs.com), the latter an RFID systems integrator that has developed more than a dozen RFID-compliance tagging programs for Wal-Mart suppliers, VLG implemented an initial RFID solution immediately and affordably, giving it confidence and know-how with the technology even before it began to build its new DC facility.
"We learned there is a misconception about RFID," says Hudson Magloire, operations analyst at VLG. "You hear so much about the obstacles and difficulties in getting good read rates, having to make big changes to your business and spending a lot to put in [such] a system. That perception changed the farther we went along in our project. When you start doing it, it's a lot easier than it seems."
Many of the furniture items VLG supplies to Wal-Mart Stores Inc. are shipped to VLG's distribution center in Schaumburg first for final assembly. The company decided to begin the project by tagging one bar-stool model, which it figured would minimize the impact on warehouse operations, and could be implemented quickly and inexpensively. The initial bar-stool tagging task would also provide a sufficient starting point to gain RFID experience as it considered additional applications. For the bar-stool project, VLG loaded pallets with shipping cases containing one bar stool each. Both the pallets and the cases were tagged, per Wal-Mart's requirements.
"We wanted to take advantage of RFID technology internally," Magloire says. "We thought we could learn about RFID and gain experience while tagging [the bar stools] for Wal-Mart and build a competitive edge..."
VLG asked R4 Global Solutions to provide expertise in system design, label placement, software integration and technology selection and VLG added specific equipment guidance. The bar stool's item and order numbers were pulled from VLG's Macola enterprise-resource-planning (ERP) system, based on Exact Software N.V. (www.exactsoftware.com), and put into a Zebra R4M-Plus RFID label printer/encoder, according to Magloire. It took R4 Global about three months to design and install the system. The R4M-plus RFID label printer/encoder for EPC Class 1 tags combines on-demand smart-label encoding and verification capabilities with thermal/thermal-transfer printing to help comply with emerging supply-chain requirements like those of VLG. Able to support ultra-high-frequency (UHF) Class 1 transponders from Alien Technology (www.alientechnology.com), the system offers both "read-and-write" and "read-only" options. UHF transponders are suitable for tagging pallets and shipping cases throughout the supply chain because their long read ranges allow for unattended batch reading, according to Zebra. Built of die-cast metal, the compact unit has a print resolution of 203 dpi and prints labels up to 4.09 in. wide and up to 165 in. long at 10 in. or 245 mm/sec.
The R4M-plus printer/encoder also uses smart label stock supplied on rolls by Zebra with RFID squiggle-tag inlays from Alien that were integrated into the label stock by Zebra. To design the bar-coded shipping labels, Zebra used BarTender software from Seagull Scientific Systems (www.seagullscientific.com), a Zebra partner. The software was upgraded to a newer version in order to prepare the EPC-enabled, Wal-Mart-compliant formats. According to R4 Global, custom EPC middleware pulls data from the host ERP system and sends it to the label printer software and printer to generate the printed, coded labels.
"VLG told us they wanted to use Zebra printers because they were already familiar with them for bar-code shipping labels and were satisfied," says R4 Global's Sean McNunn. "VLG went to see if Zebra could help them meet their new RFID labeling needs, and Zebra came through with flying colors."
The label printer/encoder and the BarTender software were newly commercialized at the time, so representatives from Zebra, its partners and value-added resellers (VARs) and R4 Global worked together to ensure that the printer drivers and encoding features performed in sync and as required. The printer comes standard to automatically validate each smart-label inlay before and after it is encoded.
We thought there would be some fairly big changes to our business processes, but there weren't. It has been pretty seamless for the warehouse staff.
"When a print job is sent to the printer, the printer can handle RFID programming of the tags with a couple of commands," explains Matt Ream, Zebra's senior manager of RFID systems. "On a standard Zebra bar-code label format, it's a matter of one or two extra commands that specify the RFID data be programmed to the tag. The first thing the printer does is process the RFID information. The printer's built-in RFID reading and writing module spot-checks the tags to ensure they're 'good.' The tag is then programmed, the programmed data is verified and the human-readable and bar-coded information is printed. This is all seamless to the end user. So if any of those steps fail, or if we find a 'bad' tag or if, for some reason, there is misinformation in the tag, the system will print a void message over the entire face of the label. The system then advances to the next tag and the same process is repeated."
This helps prevent unreadable smart labels from being applied, Ream says, and is a key safeguard for label quality and compliance. Since the initial testing and setup, VLG has reported excellent performance and read rates.
"VLG decided to print the labels in its office instead of on-demand in the warehouse, so that office workers would have the responsibility of managing the smart labels," McNunn points out. "This put the probability of error in the front office."
R4 Global says it configured the system so that the ERP software, which manages incoming orders, flagged the Wal-Mart orders for smart-label tagging by citing the specific stockkeeping unit on an administration screen and by noting a specific shipping location as being "RFID-enabled."
VLG's office staff produced the labels and transferred them to the warehouse for use as pick lists to fulfill the orders. The warehouse staff then applied the RFID smart labels manually to the shipping cases as the cases were picked to fill the orders. Once an order was complete and the products were cased, the cases were tagged and palletized for shipping, and an RFID pallet label was manually applied to the pallet load.
"There was really nothing new for the warehouse workers to learn," explains Magloire. "We thought there would be some fairly big changes to our business processes, but there weren't. It has been pretty seamless for the warehouse staff."
According to VLG, there is a lot of open space inside the bar-stool shippers and the wooden bar stools were friendly to radio-frequency signals, so it was easy to find places on the shipping cases on which to apply the RFID-tagged labels to achieve excellent read rates.
The products and packaging were "RF-friendly enough" that the tags could be placed almost anywhere on the cases, R4 Global discovered. The tags are currently applied so as not to obscure any printing or graphics on the outside of the cases. The pallet tags were applied on an outer shrink wrap that unitized the pallets, PD is told.
The 4x6-in. smart labels were checked prior to shipment using a portal-mounted reader designed by R4 Global that features a single Alien reader and four antennas. The portal reader ensured that the labels were readable. When the cased products were moved by forklift from VLG's shipping doors onto trucks, the tags on the pallet and on the shipping cases were identified by the reader supported by the antennas. A traffic-light device sits by the dock door. The lights in green, yellow and red would indicate if the information from the tags was received by the reader. An illuminated green light, for example, verified that information from the tags was recognized and communicated back to the ERP system. By transmitting data-shipment information back to the ERP system, VLG says it was better able to forecast product demand, which improved the bottom line.
The tagging program at VLG went live in December 2004, weeks before the Wal-Mart deadline and less than four months from when VLG first talked to R4 Global Solutions and Zebra about the project. R4 Global says it brought methodologies that broke down VLG's requirements into simple steps, based on VLG's requirements.
Once the printer was installed and running, we could see that the project was a lot easier than we first thought it would be.
VLG is now able to log onto Wal-Mart's Retail Link supplier website to track the progress of its tagged merchandise and is beginning to use the information it receives for its own planning. The company is still considering ways to use RFID technology internally, and expects to accommodate RFID operations when it begins building its new DC.
But Magloire says that his firm has discovered you don't have to overhaul everything to put in an RFID system. "Some parts of the project took a little longer than we expected, but once the printer was installed and running, [we could see that the project] was a lot easier than we first thought it would be," he adds. "Our changes were at the software level, not in the warehouse."
VLG's next step will likely be to begin tagging additional products as Wal-Mart expands its program, says Magloire. PD learns that RFID is so far installed in 104 Wal-Mart stores, 36 Sam's Clubs and, after June 1, 2005, six distribution centers. Wal-Mart plans to have RFID in up to 600 stores and 12 DCs by year's end.
VLG soon plans to break ground on the larger distribution facility in nearby Bartlett, IL, and says it expects to eventually ship all of its products equipped with RFID tags. Plans are in the works for the company to ask materials suppliers to begin shipping their products with the tags too.
"When the time comes to tag one-hundred-percent of our merchandise, that will be no problem for us," Magloire sums up. "RFID is new to us. There were several things we just weren't sure about. However, we knew we wanted to go with Zebra printers. We already use them to make our bar-code shipping labels. We were familiar and comfortable with Zebra. They always did a good job for us, so that was one less thing to worry about for the RFID project."