The Brazilian subsidiary of the Levi's American brand of jeans, shirts, belts, caps and footwear has become the latest adopter of radio frequency identification technology for tracking and inventory control. The successful deployment, carried out by iTag Tecnologia, is already bringing positive results in the first months since deployment during the second half of 2017.
Levi's Brazil decided to test the RFID solution at its own stores, which encompass a total of 78 points of sale throughout the country, primarily because they use the same enterprise resource planning (ERP) system. As such, the implantation has become less complex compared to the other 62 stores, which utilize 12 different ERPs. The first test of the solution occurred this year on Black Friday, when the company accounted for a 56 percent increase in sales compared to last year, thanks to several factors. However, the firm was unable to accurately determine how much of this was due to RFID, says Rui Araújo Silva, the general director of Levi's Brazil.
"One thing is certain: the ability to easily and quickly replace parts on the shelves was one of the determining factors in this success in our store sales growth," Silva says. "We just do not know how much it was thanks to RFID specifically, because we are running a series of improvements in store processes and collection decisions this year, and are also being impacted by a significant improvement in the country's economic scenario." Silva predicts a Christmas season marked by good business this year.
According to Silva, all signs indicate that with RFID, it was possible to more efficiently meet the needs of in-store customers this year than last year. Most likely, he says, had the company not successfully deployed the technology, its sales might have been hampered by an inability to supply points of sale regularly and accurately. This view is shared by Jefferson de Paulo, the director of logistics and distribution at Levi's Brazil, who manages the placement of iTag's EM 4124 tags on all merchandise sold in Brazil—20 percent of which is locally produced, with the rest imported from outside the country. The company currently consumes 50,000 RFID tags per month.
Levi's is using RFID to track products from when they are received at the company's distribution center (DC). This involves the finalization of purchase orders, transfers, shipment to stores and inventory counts upon receipt. The technology is also being used in sales and inventory processes, in addition to an anti-theft solution.
At the DC, where the labels are printed, the test will enable the company to receive goods and finalize purchase orders. Sales invoicing for the multi-brand franchises will also take place at the DC, before goods are transferred to its own stores. The sealed packages are then checked, in order to compare the items within with the invoice of goods. Having RFID tags inserted in all products, the company explains, makes it easier to control inventory and the location of goods.
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