case file

I
n the fashion retail business, speed is what
separates the chumps from the Valentinos.
Underneath the glitz of a Wills How fast an organization can respond to new
customer demand is key. And when creatives
Lifestyle store were tricky challenges and seamstresses are all driven to turn around
season and host of other parameters.
The warehouses run on a warehouse
management system that are tied into
MOVEX, a fashion ERP. They have separate
bays that receive, scan, store (in metallic bins), segregate

like shrinking product lifecycles,

ideas quickly, frittering the time gained makes a and dispatch products.
mockery of the system. The IT team looked at this workflow picture and decided

unpredictable demand, and a long

But like a fast moving stream entering a broad plateau, two things: any garment carrying the Wills Lifestyle brand
garments destined for Wills Lifestyle Retail slowed down needed to be RFID tagged at a ITC Lifestyle Retailing factory

and inflexible supply chain. IT helped when they got to warehouses. It was like the warehouses
were thumbing their noses at the system. And it wasn’t
(before they got to the warehouse) or at an outsourced
manufacturer. Second, they needed to create two RFID

tame these monsters using RFID. funny. Everyday that a box of clothing stayed shelved in the
warehouse, was a day less on display and 12 hours worth
tunnels at each warehouse: one for incoming goods and
another for those leaving the warehouse.
less of opportunities to make a sale. Like other RFID implementations, the IT team at

Tagged!
By Kanika Goswami
That, however, was a fact at the Rs 300-crore fashion
house that belongs to the ITC Group. As truckloads of boxes
waited outside warehouses, workmen couldn’t inventory
them fast enough. “The challenge was to deal with large
volumes because people have been doing it manually,” says
ITC Lifestyle Retailing bumped into challenges of read
accuracy, read speed and tag orientation. That’s when they
turned to solutions such as PLC-based RFID tunnels for the
warehouse and smart, customized point-of-sale software
(POS) for the stores.

Photo by Srivatsa Shandilya

O.P. Bansal, CIO, ITC Lifestyle Retailing. “During the pilot, we tested a variety of RFID tags
A lean supply-chain could help. But with traditional and and RFID readers and antennas. Various systems — the
manual practices, there was only so much that the company RFID tunnel was one of them — were conceptualized and
could crunch its time-to-market cycles. fabricated to achieve our goals,” recalls Bansal.   
Looking to streamline their operations, ITC Lifestyle Meanwhile, at the stores, the RFID program was
Retailing, conducted a detailed study to assess their overall meeting its own challenges. Since each store has two
supply chain process. After their huddle, they returned counters for customer billing, store managers decided to
Reader ROI: a solution they had probably guessed
The far reaching before the study: RFID was the solution
benefits of RFID that could best increase the company’s
How RFID can responsiveness. “A business case was put
produce greater forth to implement RFID at an item level.
efficiencies
The aim was to speed up existing processes,
reduce time-to-market, handle material
efficiently, and bring more accuracy of
books versus physical stock,” says Bansal.
But the company knew they were
shopping in the unknown. Few companies
have invested in RFID, shying away from
the technology because of its price and
inaccuracy. Fewer still have attempted
in India’s retail scene. So, the core team
decided to start with a pilot, and follow “Saving time means
it up with phased implementations. The a garment gets more
first phase would last a year starting from time at the store. That
September 2006. makes more business
sense to me than
Illustrat ion by ANIL T
Making It Stick saving labor costs.”
ITC Lifestyle Retailing has two gigantic — O.P. Bansal
warehouses, which swallow up everything CIO, ITC Lifestyle Retailing
their factories produce and carefully
distribute clothing based on location,

166 s e p t e m b e r 1 5 , 2 0 0 8 | REAL CIO WORLD Vol/3 | ISSUE/21 Vol/3 | ISSUE/21 REAL CIO WORLD | s e p t e m b e r 1 5 , 2 0 0 8 167
 case file
use a similar approach to that at the factory:
they placed RFID antennas in drawers behind
the counters.
But for all its potential, RFID is still far SNAPSHOT
from a plug-and-play solution and possesses
technological challenges when it’s being ITC Wills
deployed in a live environment. ITC Lifestyle Lifestyle
Retailing had to take on radical changes in Retail
processes, face problems with integrating the Revenue:
technology with existing systems and deal Rs 300 crore
with an unavailability of a standard program IT Staff:
interface for RFID hardware. 40
The high price of RFID tags, too, has CIO:
traditionally been a stumbling block for the O.P. Bansal
technology, and Bansal couldn’t get away
from it. “Earlier, we used tags that were worth Rs 6 or Rs
7. That’s almost 1 percent of my product cost and that is
significant,” he says.
To mitigate the high costs of the tags, other organizations
normally reuse them. But that solution would not cut ice at
ITC Lifestyle Retailing . Bansal says that it was not feasible
to reuse the tags since the logistics of retrieving the tags
and reprinting information on them — on repetitive basis
— was a sizeable task.
However, there was good news. Over a single season,
the company saw the prices of the tags fall by over 30
percent. But given that ITC Lifestyle Retailing is currently
tagging 1.6 million garments a year, price is still a challenge,
says Bansal.
But what really worries Bansal is the changing nature of
the technology. Every investment the company makes today
could be outdated tomorrow — or worse worthless. “We
are still experimenting. Whatever we may have done so far
may become obsolete. That is one of our biggest challenges,”
says Bansal.
Ka-Ching!
In the cutthroat retail business, higher efficiencies are
not a luxury, they are a must. RFID has brought that
advantage to ITC Lifestyle Retailing. Under their old
barcode system, each carton had to be manually opened,
every piece scanned and entries made. And that was only
when it entered the warehouse. The process had to be
repeated when garments left the warehouse.
With the RFID tags, entire cartons can be scanned.
Gone are the days, when boxes had to be opened by legions
of workers, today, boxes are simply pushed through the
RFID tunnel. It now takes 20-30 seconds to inventory
30-35 garments (about one boxes worth) — from between
five and eight minutes. Currently, on any given day, each
worker can handle between 2,000 and 3,000 garments
— from by 300 to 400 — an incredible efficiency jump,
which translates to savings of about Rs 15 lakh a year.
168 s e p t e m b e r 1 5 , 2 0 0 8 | REAL CIO WORLD
Rs 15 lakh will get the bean counters
whistling, but Bansal is focused on another,
more important benefit. “I am not looking
at this as a labor saving activity. If we can
save time in the warehouse that means every
garment is getting about seven days earlier
to the store. And that makes more business
sense to me,” says Bansal.
Since the implementation, the extra time
every garment spends in the store is affecting
the company’s bottomline positively. With
some garments getting as much as extra 10
to 15-day window, ITC Lifestyle Retailing has
seen a 1 to 2 percent uptick in sales.
Another advantage is a huge reduction
in the return of non-saleable goods from the showroom.
As a direct result of mishandling in the warehouse, an
astonishing 20 percent of garments were returned from the
stores. Now that boxes don’t have to be opened, the fewer
number of non-saleable goods is saving the company about
Rs 15 lakh a year. Also, the percentage of manual errors has
been reduced greatly because each tag has a unique identity
and reconciliation is more accurate. Assuming a 0.1 percent
error rate across three lakh products every month, Bansal
estimates saving worth Rs 60 lakh a year.
Like a stone in a pond, the benefits of the RFID
implementation are sending ripples that will be felt years
from today. Because the company can ship inventory
in and out of its warehouses faster, it can make do with
less warehouse space, creating savings in real estate.
Bansal estimates that over a period of three years the
implementation will save the company about Rs 10 lakh
in real estate costs.
Sanjeev Khanna, who is in charge of logistics, says, “The
operational benefits that we’re deriving post the RFID
implementation can be summed-up in two important
words: efficiency and accuracy.”
And at the store, the RFID implementation has created
time for service executives. Time-consuming jobs like
taking physical stock counts and back room management
are now non-existent. “This gives a store’s staff more time to
converse with customers about products and promotions,
which in turn increase customer satisfaction,” says Bansal.
“Plus it has opened the door for future-looking applications
like trial room experience, smart shelves, contact-less
payment, etcetera.”
The project has already been rolled out across two major
warehouses in Delhi and Bangalore and across all Wills
Lifestyle Retail stores in the National Capital Region. In its
second phase, RFID will taken to other stores across the
country. RFID could be coming to a store near you. CIO
Kanika Goswami is assistant editor. Send feedback on this feature to
kanika_g@cio.in
Vol/3 | ISSUE/21 Vol/3 | ISSUE/21 REAL CIO WORLD | s e p t e m b e r 1 5 , 2 0 0 8 169