The Internet Of Things. The last time I remember hearing that phrase, Mariah Carey had the best-selling CD. Heck, people were still buying CD’s. It was all part of the demand-driven supply chain. The idea was that every pallet, case and individual can of Coke would be tagged with an RFID chip that could be tracked in real time as the units moved through the supply chain. That information could be posted to a database accessible over the Internet. Each time you or I bought a can of soda from a vending machine, a demand signal would go back to the bottler to create a replenishment order.
We all know how that worked out. Or do we? Over the last couple of weeks, I’ve had conversations with Phil Gerskovich, a senior vice president of new growth platforms at Zebra Technologies and Bill Connell, senior vice president for logistics and operations at Macy’s. It seems that the Internet Of Things is back in vogue, even if Mariah Carey, or CD’s, are not.
First Macy’s. I’m writing a feature article about the department store retailer’s RFID project for our June issue, but here’s a preview. While the focus of retail initiatives a decade ago was on reading cases and pallets as they passed through an RFID portal at the receiving dock, Macy’s has brought the technology into the retail store. It is tagging its perennial inventory – the items that are always kept in stock and are regularly replenished, like shoe samples, denim, men’s basics and women’s intimate apparel. RFID allows store personnel to take inventory on a regular basis and to make certain the right stock and right sizes are represented on the store shelves. Since launching the program, inventory accuracy of tagged items has improved from the mid-60’s% to about 95% or better. The benefit is in top-line sales. “What I can say is that the deployment has met our expectations and in some instances exceeded them,” is the way Connell put it.
Gerskovich is seeing similar strategies among Zebra’s customers, and not just retail customers. Note: to the best of my knowledge, Zebra is not involved in Macy’s initiative. “The original term was coined in the context of having objects that could communicate information using passive RFID,” Gerskovich told me. “Today, the phrase is used in a much broader sense. We’re seeing all kinds of smart devices that can interact in the Internet. Yes, retailers are tagging individual items in their stores. But we’re also talking about smart appliances, smart thermostats and even smart cars. In addition to RFID tags, we are talking about sensors, real-time locating systems and GPS that are all capable of connecting to the Internet and communicating with the broader world. We believe they’ll create smarter end-to-end supply chains.”
The Internet Of Things is still not quite a reality. Macy’s isn’t trying to tag every item it sells. Nor, at this point, has it extended the initiative to warehouse processes. But having learned the lessons of the original retail initiatives of a decade ago, it seems the Internet Of Things is far closer today than ever.
