Staples Business Depot deploys Gen2 tags in RFID pilot

Staples Business Depot will be among the first large Canadian retailers to pilot radio frequency identification technology that meets the recently passed Gen2 standard in its logistics and store level operations.The company is working in partnership with several suppliers, including Bell Canada and PricewaterhouseCoopers, to implement RFID tags on cases, pallets and store items at one of its distribution centres and one store. The pilot is scheduled to take place over a 45-day period, at which point Staples will determine whether it is worth extending its use of RFID.
RFID is a wireless data collection technology that uses small tags to store information. Though experts see its potential in a range of industries, its largest champion to date has been Wal-Mart, which mandated all its suppliers to incorporate the tags.
Joe Soares, Staples Business Depot’s director of retail process, said RFID tags have sometimes been difficult to use on packages that come in contact with water or which are physically dense, such as paper. Though Wal-Mart has already provided some validation for the use of RFID, he said Staples wants to conduct its own tests.
“There’s always talk of ‘Either you’re in it or you’re not.’ We wanted to be in it,” he said. “It’s not a huge investment, apart from time in that we’re dedicating some of our efforts to (testing it in) stores. We’re still doing it in conjunction with our everyday processes.”
The Gen2 standard, which was approved by the EPCGlobal standards body in December, is intended to improve the speed and accuracy of RFID tags and the systems that read them. The Staples project will put those benefits to the test, said Alan Rowe Bell’s VP of enterprise marketing. “The other element which is a little harder to measure but is an important part of the solution is the notion of productivity. It’s something that needs to be measured. Customer satisfaction is directly linked to whether the right inventory’s on the shelf when they need it. The  employee ends up doing higher-value work than running around the warehouse finding things on skids.”
Bell is acting as a systems integrator on the project in an effort to develop expertise that it can apply to other clients, Rowe said. The company and its partners are part of a consortium, called the Supply Chain Network Project, which was launched by consulting firm PricewaterhouseCoopers’s Canadian office.
Jeff Ashcroft, VP of logistics at PwC, said Staples is unusual in that it is applying the technology at three levels of its supply chain, which is a step beyond some of the deployments that have happened in the grocery industry, for example.
“It increases the number of RFID units involved, so there’s a cost factor. Pallets are reusable, but labels aren’t,” he said. “Some of the issues that most people are pointing to (as a barrier to adoption) is the cost of tags. In a reusable environment you don’t have those issues.”
Soares said the real proof will be when more of its business partners come on board with RFID.