GS1 México
Levi´s Study Case
EPC / RFID Implementation
Agenda
1. Levi´s
•1.1 Company Profile
2. Business Need
•2.1 Background
•2.2 Issues Identification
3. Scope / Pilot
•3.1 Origin
•3.2 Scope
•3.3 Timeline
4. Solution
•4.1 Implementation of EPC / RFID
•4.2 Benefits
1. Levi´s
1.1 Company Profile
• Multinational manufacturer
known as the inventor of the
first pair of jeans.
• They have 2 sub-brands:
Dockers and Denizen.
• Levi´s employees up to
5,000 employers in over
110 countries.
2. Business Need
2.1 Background
“We manufacture the merchandise within
our 50 distribution centers, which turns
the work difficult, and exhausting to keep
an eye of every single product through the
whole supply chain”.
2.2 Issues Found
I
II
III
IV
• 20% discrepancy between the
physical inventory and the levels
reported in system.
I.
• Lack of detail such as color &
Inventory
sizes.
II.
Lack of
Information
• Inventory supplies in stores of over
4 months.
III.
Supply
• Sales don´t match the
expectations of high inventor
levels.
IV.
Financial
3. Scope/Pilot
3.1 Origin of the Pilot
• On 2005, Levi´s made up its decision to implement
the RFID / EPC technology into one store so they
could pilot it. After 6 months, they found out that the
results exceeded the primal objectives.
2005
Pilot´s Kick
Off
6 Months
40%
reduction in
out of
stocks
items.
2006
Extended
the pilot in
2 more
stores.
3.2 Scope
Financial
Operatives
I. Reduce inventory
levels to, at most, 2
months.
II.Reduce the % of outof-stocks items.
III. Increase sales.
IV. Accurately manage
replenishment
automatically
generated with EPC /
RFID tech.
I.
Fully
integrate
EPC/RFID technology
into the DC operation.
II.
Implement
EPC/RFID technologybased operations in
stores: goods-in, sales,
returns,
exchanges
and
inventory
management.
3.3 Timeline
4 EPC / RFID Implementation
Once it´s known that the benefits are out there,
Levi´s decided to gradually integrate the RFID
solution into the remaining stores.
First, the Distribution Center receives the PO, based on the results brought
automatically by the store, asking just for what they really need to be
stocked.
•
Every single pair of
jeans, has its own
SRFID!
Secondly, in order to validate the shipping; a web portal was previosly created
to verify and scan such things like weight, net content and the Serial
Number.
The POS receives the Advance Shipping Notice before the arrival of the
merchandise. Once the items have arrived, a mobile RFID device validate
the information avoing to open the boxes to check out what´s inside. The
information matches automatically with the POS data and updates the
inventory.
Finally, as a consumer experience and a Marketing strategy; they set up a new
device to help the customers to fully interact with the store. An Intelligent
Mirror allowing them to pick up a garment and see through the reflection
how it would fit in it and how it looks in different colors.
4.1 EPC / RFID Implementation
-Increased by 11%
- Improved availability of
products.
-Enhaced consumer buying
experience .
-Reduced transport costs,
typically qualified as “wait
times”.
-Increased efficiencies in DCs
-Optimised logistics
operations, achieved by
distribution to a higher
number of stores per day.
Sales
Financial
Benefits
Out-OfStock
-Reduced lost sales by 40%
due to reduction in out-ofstocks merchandise.
Store
Inventory
Replenis
hment in
Stores
4.2 Benefits
-Reduced inventory in stores
from 4 to a 2-months supply.
-Improved inventory accuracy
to 99%
-Removal of innactive
products.
-Provided more complete and
detailed inventory view.
-Increased efficiency via fulled
automated replenishment.
-Improved ability to verify the
accuracy of work in warehouse.
-Increased hours of operation
and opportunities for more
sales through the elimination of
store closings for inventory and
replenishment.
“Technology as an enabler, on its own,
doesn’t really do anything. You must
effectively integrate RFID into a store’s
operations for it to be useful”
Abel García, Director of IT, Levi´s Latin America
Thank you