Case Studies of RFID Application
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1 ICCP Foresight Forum Case Studies of RFID Application - RFID applied in Retail & Publishing Industry in Japan - 5 th October 25 Masakazu FUJITA Research Director Next Generation Electronic Commerce Promotion Council of Japan ( ECOM ) 1
2 Contents Field Trial Projects on RFID Applications in Various Industries sponsored by METI ( Ministry of Economy, Trade and Industry ) Case Study of RFID Application in Retail Industry Case Study of RFID Application in Publishing Industry Appendix: Field Trial Projects on RFID Applications sponsored by METI 2
3 Field Trial Projects on RFID Applications in Various Industries sponsored by METI FY23 FY24 FY25 Objective Utilize RFID in Four Industries Utilize RFID on Supply Chain Management Utilize RFID on Innovation of Industry Structure / Inter- Industry cooperation / International Operations POC Application Industries Note: POC= Proof of concept Appliance Industry Apparel Industry Publishing Industry Food Distribution Industry Construction Machineries Industry Publishing Industry Appliance and Electronic Equipment Industry Medical and Pharmaceutical Industry Department Store and Apparel Industry Freight Industry Audio & Video CD/DVD Retail & Rental Stores Electronic Equipment Industry Medical & Pharmaceutical Industry The Self-Defense Forces Logistics Autonomous Type Service Robot Store Complex of Media Contents Future Store type Services International Project by Automobile Parts Industry (Japan-China-Korea) International Project by Business Machines Industry (Japan-ASEAN) 3
4 Case Study of RFID Application in Retail Industry Field Trial Project of RFID Application at Mitsukoshi Overview of Mitsukoshi Characteristics of Japanese Department Store Issues Facing Ladies Shoes Retailers Information sharing among Makers/Wholesalers/Retailers in real time Process flow of Ladies Shoes Summary of the RFID Trial Project at Mitsukoshi 4
5 Field Trial Project of RFID Application at Mitsukoshi Overview of Mitsukoshi Established: Year 1673 Incorporated: 6 th December 194 Capital: \37.4B ( 273M Euro) Sales Revenue: \888B ( 6.6B Euro in FY24 Consolidated) Selling floor space: 533, m2 Number of Employees: 7,94(11,425 Consolidated Y24) Source: Mitsukoshi 5
6 Characteristics of Japanese Department Store - Comparison of Sales Efficiency among Department Stores in Europe, USA and Japan (%) Gross Gross Margin Margin Ratio Ratio Europe USA Japan Europe USA Japan Inventory Inventory Turnover Turnover Ratio Ratio (Times/year) 3.5 times that of USA Europe Europe USA USA Japan Japan USA USA (\K) Sales Sales per per square square meter meter 7.5 times that of USA Japan Europe Japan USA Japan Europe USA Japan Strengths of Japanese Department Store 1. Attentive customer care 2. A rich variety of merchandise 3. Short life cycle of merchandise Source: Mitsukoshi 6
7 Issues Facing Ladies Shoes Retailers < Characteristics of Goods > Wide Variations in size ( 6 sizes on average ) Requiring inventory space Not distinguishable, as seen from the outside of box Short life cycle according to seasonality or trend in fashion < Store characteristics > Need of going to backyard for checking availability of sizes Need of enough trial fitting Sales opportunity loss due to unavailable sizes < Industry Characteristics > Heavy workload on inventory checking Huge distributor s s inventory due to the large number of items Difficulty in control of inventory due to seasonal function in shipping/receiving Decided to try RFID PoC test in ladies shoes because issues are clear and quick return on investment is expected 7
8 Information Sharing among Makers/Wholesalers/Retailers in real time Internet Maker Wholesaler Department Store Taking Stock Receiving Inventory Check Shipping Source: Mitsukoshi 8
9 Process flow of Ladies Shoes Maker Wholesaler Shipping Receiving Inspection Inventory Mgt. Attaching Tags Linking Shipping Inspection Retail Search via PDA Inventory Receiving Inspection Source: Mitsukoshi Customer Self Service Sales Registration Detaching Tags (Reuse) Ledger I N6 N1 A I1 I2 I3 I4 9
10 Summary of the Mitsukoshi Trial Project [ Summary ] Trial period: 12 October 24 2 December 24 ( previous data ) Query from terminal : 28 / person / day (1/person/day Note: out of inventory) Round trip to backyard : 15 / person / day ( reduced from 2 / person / day ) Service time per customer: 6 minutes / customer / (13 minutes / customer ) Number of merchandise introduced : 3.1 / customer (1.7 / customer ) Sales : 1% growth from the previous year [ Feedback from sales clerk ] Benefits - Ease of use compared to bar-code reader ( just hold a reader over tags) - Due to real-time inventory access, alternatives can be offered on the spot Issues - About 1% inaccuracy of data during a two-week week trial led to extra workload - Difficult to identify broken tags Source: Mitsukoshi 1
11 Summary of the Mitsukoshi Trial Project (continued) [Production Status ] 26 April 25-3 July 25 Commenced : 26 April 25 Note: The figure in parentheses indicate previous data Merchandise : 13 brands, 1, faces,, 6,5 pairs Store : Nihonbashi 1 st Floor ladies shoes carrier zone Staff : Total 1 ( Average 7 / Day ) Queries from terminal : 33 queries / person / day ( 15 / person / day due to out of inventory ) Service time per customer : 5 minutes 35 seconds ( 13 minutes ) Sales (Compared with last year) : May +9.9% Source: Mitsukoshi (Styles & colors) June +22.2% July +25.4% 11
12 Summary of the Mitsukoshi Field Trial Project (continued) [ Future Expansion of Ladies Shoes System] More brands in Nihonbashi store 13 brands of one maker 23 brands of 3 makers (in July 25) Launch in Ginza store 3 makers, 26 brands ( in August 25 ) Introduction in Sapporo, Nagoya, Fukuoka Targeted by February 26 [ Future Expansion of Application area other than Shoes System] Better customer care through changing the way of clerks services Trial in apparel Planning in Men s s wear and Jeans to use RFID in many items Future enhancement from customer perspective Customers do not use terminals Inventory management function built in store fixture Source: Mitsukoshi 12
13 Case Study of RFID Application in Publishing Industry Supply Chain of Publishing Industry and their Issues Incentives for adopting RFID Application Area Field Test for attaching RFID Tags to Books Field Test in Shipping & Receiving Process Flow of Test in Shipping & Receiving Process Field Test at Bookstore Summary of the Trial Project in Publishing Industry 13
14 Supply Chain of Publishing Industry and their Issues 74,8 74,8 New New Books/Year 4, Publishing Companies Agents 18,2 Bookstores Customer (Reader) Average ratio of unsold books return: 37% Source: Japan Publishing Organization for Information Infrastructure Development (JPO) Fixed Retail Price Fixed Retail Price 14
15 Incentives for adopting RFID Request of source tagging from bookstores - Adopt RFID Tags in order to prevent shoplifting * Average annual amount of shoplifting damage; \2,12K (15.5K Euro ) / store * Average annual sales revenue; \13M ( 752K Euro ) / store - Attach RFID Tags to books in binding process Establish a RFID study organization in the Industry ( IC Tags Study Committee in JPO : Japan Publishing Organization for Information Infrastructure Development ) JPO conducted the Field Trial Project as a project owner. Source: JPO 15
16 Application Area Detect illegal transactions ( Shoplifting, Unauthorized unsold books return, Breach of official release date ) Realize efficient distribution and traceability Optimize inventories in the industry Stimulate new demands (Strategic Marketing tool ) Utilize RFID in Library 16
17 Field Trial Test for attaching RFID Tags to Books Added RFID Tags attaching & reading process to the current binding process. Objectives: - Verify throughput speed in the process line. - Verify breakage of RFID Tags through the process. ( pressure, high temperature, shock, signature, etc. ) 1. Attaching RFID Tags on a page 2. Arranging all pages in a book. 3. Binding 4. Cutting 5. Finishing Source: JPO 17
18 Field Trial Test in Shipping & Receiving Processes 1. Shipping/Receiving Inspection 2. Taking Inventory 3. Picking Inspection 4. Issuing Slips 5. Packing Inspection 6. Settlement 7. Returning process (sorting, refinishing) Testing reader accuracy at inspection of each book (line) Source: JPO Testing accuracy in bulk-reading Testing reader accuracy at inspection of each book (hand work) 18
19 Test-flow of Shipping& Receiving Process Dummy Book With RFID Tag Packing Shipping/Receiving Inspection Test Model - Packing Pallet, Corrugated Box, Collapsible Container, Bucket - Contents of package Single/Mixed (Hardback Book, Comic Book, Magazine, Dummy Book, etc.) - Packing Volume 1, 4, 6 - Moving vehicle Table, Forklift Truck, Belt Conveyer, etc. - Inspection Unit Book, Package Dummy Book With RFID Tag Receiving & putting on the shelf [ Receiving Inspection Test ] < New Process with RFID Tags > Hand Inspection with Table RFID Bulk Reading Passed Inspection! Belt Conveyer Forklift Truck < Current Process > Visual Inspection with Receiving Slip RFID Reader Compare the efficiency [ Picking Test ] Shipping slip Picking process Test Model -Shelf Metal Shelf, Wooden Shelf - Packing style Bulk - Setting Flat, Vertical - # of Book Picking and Packing [ Shipping Inspection/Shipping Test ] Antenna Source: JPO 19
20 2 表示条件 18 期間 : 週間 (12 月 12 日 ~12 月 18 日 ) 種別男女別書籍はじめの一歩 12 巻 16 書籍単体 ジャンル総合 書籍単体 販売数 ( 男性 ) 販売数 ( 女性 ) 2 4 ヒット率 ( 男性 ) 3 ヒット率 ( 女性 ) 12 月 12 日 12 月 13 日 12 月 14 日 12 月 15 日 12 月 16 日 12 月 17 日 12 月 18 日 12 月 12 日 12 月 13 日 12 月 14 日 12 月 215 日 12 月 16 日 12 月 17 日 12 月 18 日 12 月 12 日 12 月 13 日 12 月 14 日 12 月 15 日 12 月 16 日 12 月 17 日 12 月 18 日 12 月 12 日 12 月 13 日 12 月 14 日 12 月 15 日 12 月 16 日 12 月 17 日 12 月 18 日 ジャンル総合 月 12 日 12 月 13 日 12 月 14 日 12 月 15 日 12 月 16 日 12 月 17 日 12 月 18 日 月間 閉じる 販売数 ( 男性 ) 販売数 ( 女性 ) ヒット率 ( 男性 ) ヒット率 ( 女性 ) 棚在庫 15倉庫在庫 1 5 月間 閉じる 販売数 (~18 歳 ) 販売数 (19~35 歳 ) 販売数 (36~5 歳 ) 販売数 (51 歳 ~) 伸び率 (~18 歳 ) 伸び率 (19~35 歳 ) 伸び率 (36~5 歳 ) 伸び率 (51 歳 ~) 販売数 (~18 歳 ) 販売数 (19~35 歳 ) 販売数 (36~5 歳 ) 販売数 (51 歳 ~) 伸び率 (~18 歳 ) 伸び率 (19~35 歳 ) 伸び率 (36~5 歳 ) 伸び率 (51 歳 ~) Field Trial Test at Bookstore Total Test including Marketing, Sales Management and Used-bookshop Browse-only Statistics Sales process at cashier Referring Sales information 週間伸び率グラフ ( 年齢層別 ) 表示条件 期間 : 週間 (12 月 12 日 ~12 月 18 日 ) 種別年齢層別書籍はじめの一歩 12 巻 週間在庫推移表示条件 在庫推移 伸び率 (%) 立読み回数 ( 回伸び率 ) (%) 期間 : 週間 (12 月 12 日 ~12 月 18 日 ) 書籍はじめの一歩 12 巻 ヒット率 (%) 販売数 ( 冊 ) 閉じる 週間伸び率グラフ ( 男女別 ) 2 立読み回数 ( 伸び率回 ) (%) 在庫 ( 冊 ) 伸び率 (%) 販売数 ( 冊 ) 12 月 12 日 12 月 13 日 12 月 14 日 12 月 15 日 12 月 16 日 12 月 17 日 12 月 18 日 棚在庫 販売数 ( 冊 ) Books information, Browse-only rating, in Graphical Display Sales process Preventing shoplifting 伸び率 (%) 倉庫在庫 Growth rate, Hit ratio, Inventory, etc 販売数 ( 冊 ) Collect marketing data such as browsing time statistics Source: JPO Refer books information such as location Book order traceability Secondhand Bookstore Check sales flag and detect books posted via illegal channel 2
21 Summary of the Field Trial Project in Publishing Industry Source: JPO Increase Sales Revenue Estimated 111B 111B Yen Yen // Year Year (81M (81M Euro Euro // Year) Year) Profit Profit for for all all parties parties of of the the Industry Reduce Returned Books Process Cost Cost Estimated 83B 83B Yen Yen // Year Year (66M (66M Euro Euro // Year) Year) Optimization of of Volume of of Books in in Supply Chain Saves Inventory Cost Cost Estimated 34B 34B Yen Yen // Year Year (( 2.5B 2.5B Euro Euro // Year Year )) Profit Profit for for Publishers & Agents Agents Profit Profit for for Bookstores Reduce Amount of of Shoplifting Damage Estimated 46B 46B Yen Yen // Year Year (( 336M 336M Euro Euro // Year Year )) 21
22 Thank you for your attention! to: 22
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