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Telstra, an Australian telecommunications company, has completed an RFID pilot project-if the project is officially launched in its 130 retail stores, it can save labor and product wastage costs of US$3.2 million per year. During the three-month test-one of Australia’s largest item-level test projects-Telstra labelled the boxes of 128,000 mobile phones and tracked them from the Sydney distribution center to 6 retail stores across the country.
After adopting the RFID system, Telstra claims that the visibility of the supply chain has increased from 65% to 99%, improving inventory accuracy. The company’s time to receive goods has also been reduced by 75%, inventory counting time has been reduced by 50%, and lost goods search time has been reduced by 50%. With the reduction of product wastage and labor costs, the company is expected to save US$4 million per year.
Telstra labeled the boxes of 128,000 mobile phones and tracked them from the Sydney distribution center to 6 retail stores nationwide
Telstra Enterprise & Government, a sub-division of Telstra’s network solutions and services, developed this system, and the company will officially launch this system in Telstra retail stores as soon as next year.
According to Telstra project manager Julien Marchand, the test-the company first proposed in 2006-was carried out between October 2008 and February 2009. Brightstar, a Miami supply chain management company that manages Telstra’s distribution center, urged Telstra’s retail department to test RFID to improve supply chain visibility. “Their main reason is to reduce the loss caused by the loss of mobile phones in the supply chain and the loss of products in Telstra retail stores.” Marchand said.
RFID readers installed in distribution centers and retail stores
In 2007, the total value of losses in the Australian retail chain was US$2.26 billion, and the average wastage rate accounted for 1.39% of sales. Since telephones are high-value products, Telstra sells mobile phones at a price of between US$121 and US$805, which improves the visibility of the supply chain. Can reduce losses.
“So we have prepared a business application case, but the release of RFID applications soon can bring other benefits,” Marchand said, including short-term benefits, such as increasing productivity by reducing the time employees spend receiving or looking up calls in the warehouse. But we also see long-term potential benefits, such as improving the accuracy of inventory levels, eliminating stock-outs and minimizing the inventory of goods.
Before launching the test, Marchand developed a set of important metrics, such as the time it takes to receive goods in the warehouse, take inventory, and find lost mobile phones. Telstra Enterprise & Government and NEC have jointly developed a system that uses RFID passive UHF smart tags on 12,800 mobile phone packaging boxes, and the operating frequency is 920-926MHz.
Next, the staff installed RFID readers in the distribution center and six retail stores. Telstra has experienced multiple installation solutions to determine which solution provides the best read rate, including installing the reader on the ceiling of the store’s warehouse door and entrance, warehouse door and entrance gate, warehouse door and cash register. “From the perspective of reading rate and aesthetics, the IT system that installs the reader on the library door and entrance ceiling and integrates it into the cash register is the best solution.
Telstra tested multiple installation scenarios
All readers are connected to a central server, and information is transmitted through Telstra’s local area network and next-generation G network. Employees can view information through the web-based adjustable asset management software (AAM), which allows Telstra to know the inventory level, lost goods in transit, and transit time in real time. If there is a delay or out of stock, the system triggers an alarm.
This immediate benefit is very substantial. Marchand said that the automatic reading of goods after more than the reading point increases the visibility of all goods transportation, store reception and moving goods to 99%.
“Because workers no longer need to read the identification codes of individual mobile phones and unpack the boxes one by one, the time for receiving goods is reduced by 75%. With RFID, we only need to move the boxes through the reader, and the goods inside are recorded one by one. Inventory The inventory time has been reduced by 55%, and the shortage, loss and wastage have been reduced by 75%. After the implementation of the entire system, the company can save 300,000 US dollars each year.
Similarly, RFID also saves the time spent investigating wear and tear. Usually, employees have to find the warehouse, watch CCTV images for a few days, and judge when and where the mobile phone is lost. Using RFID, employees can accurately determine the last time they saw the mobile phone in the store, and then call up to check the correct CCTV.
According to Marchand, combined with the reduction in non-customer service time and wastage in 130 stores, Telstra can save $3.3 million a year and recover the return on investment of the system within 18 months. “We also look forward to long-term returns, such as reducing stock-out time and increasing sales. But we need more time to understand these advantages and adjust the application process accordingly,” Telstra said.
At present, all Telstra retail stores are in the IT system update period, so the company must wait until the update is over before making relevant application plans. Telstra plans to use RFID systems in all retail stores.
In the future, Telstra Enterprise & Government hopes to provide other retailers with a complete RFID system. Marchand hopes that more retailers will announce the results of their item-level tests and improve the application of RFID in an all-round way. “We hope to see the test results of other companies. Only when app vendors start to share information and experience can RFID really play a role. Our next step is to encourage mobile phone manufacturers to label mobile phones, and other successful cases will spur them even more. Initiative.” Marchand said.
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