Marks & Spencer is using radio frequency
identification tags on almost two-thirds of the pallets used in its
food business, making it the largest RFID user in the
UK.
The retailer tags 61% of the plastic pallets it uses to move
goods from its suppliers to its stores. The company's food business
accounted for 45.2% (£3.6bn) of total turnover last year.
Marks & Spencer uses RFID tags at all six of the
distribution centres that supply its food business. Some 115
suppliers, many of which only supply Marks & Spencer, attach
the tags at source.
Ian Mumby, head of supply chain logistics and IT for food at
Marks & Spencer, said more than 1.4 million tags are read at
its distribution centres every week.
The retailer began rolling out RFID technology in 2004,
following extensive trials. It was able to set its own standards
and numbering system and deploy RFID tags more quickly than other
retailers because most of its suppliers work with Marks &
Spencer exclusively.
Speaking at a British Retail Consortium conference last week,
Mumby said it had been necessary to tell some suppliers that had
taken part in the RFID trial to move back to barcodes because they
could not meet accuracy targets.
"We took suppliers off the project, but we moved forward with
the supply chain as a whole," he said.
"If suppliers are not good enough in trials, do not compound
problems by using them in a full roll-out. You need to give them
support to improve."
Mumby said RFID readers at distribution centres were achieving
accuracy rates of 99.98%.
"Most people think the benefits of RFID are around cost
reduction and speed," said Mumby, but the main benefit is control.
"Sending the right product in the right quantity to the right depot
at the right time is far more important," he said.
The Marks & Spencer supply chain chief said the roll-out
produced the results he had expected, but he would not quantify the
financial benefits.