RFID tags overtake barcodes in M&S food business supply chain

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.

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.

This was last published in March 2006

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