Hitting the Halfway Mark

The August 2004 issue of Consumer Goods Technology reported on the strides that the North American supplier of quality bicycles, Pacific Cycle, was making to tackle retailer RFID mandates head-on with a roll-out designed not only to comply, but to improve internal efficiency. Now, four months after meeting Wal-Mart's mandate, Pacific Cycle is settling down with the right RFID technology partners to help provide visibility into its entire supply chain. "We anticipate that RFID will not only enable us to monitor our bikes in real time as they move from manufacturing to retail inventory, but will give us an accurate picture of what's out there on the floor at any given moment," says Edwin Matthews, Information Systems director, Pacific Cycle.

Trial and Error

Planning for RFID pilots began in January 2004, immediately after Wal-Mart announced its RFID initiative. PEAK Technologies provided Pacific Cycle with a solution consisting of printer/encoders, UHF portal readers and RFID labels using Class 1 tags.

After testing technology vendors came the installation of printers and readers in the company's southern Illinois distribution center. Initial deployment took about two months, although the youthfulness of RFID technology presented some obstacles. For example, Pacific Cycle struggled to achieve 100 percent pallet reads. During pilot stage, 70 percent of the individual tags in pallet configuration were being read, which was acceptable at that time because Wal-Mart only required that the pallet tag be read. But for Pacific Cycle -- where each bicycle essentially equals one case of product -- greater savings needed to arise from using RFID to tag individual items.

Another important challenge was the task of interfacing RFID technology with the company's SAP R/3 enterprise resource planning software. PEAK offered both standard products and consulting expertise in providing SAP interfaces, making it possible for Pacific Cycle to move forward with the interface portion of the pilot prior to the release of an SAP R/3 RFID Module.

Post Mandate

Despite the aforementioned obstacles, in September 2004, Pacific Cycle achieved its No. 1 goal ahead of schedule, successfully shipping four SKUs to Wal-Mart's Texas distribution center. The initial success of its RFID program helped the company become one of the first to demonstrate its compliance with Wal-Mart.

Today, with the mandate beat and all SKUs now being successfully shipped to Wal-Mart, Pacific Cycle is focused on choosing the right technology partners -- whether pilot participants or not -- that can aid in attaining ROI from RFID once tag and hardware prices drop, says Matthews.

Switching Gears

Realizing that it wasn't getting optimal read rates during pilot tests, Pacific Cycle turned its attention toward alternative RFID hardware providers. In March 2005, an announcement was made at RFID World 2005 that Pacific Cycle successfully deployed Symbol Technologies' RFID mobile computers and tags to track its bicycles as they move from its distribution centers to the backrooms of the nation's leading retailers. Pacific Cycle will use the Symbol MC9000-G with RFID, a mobile computer that combines RFID capabilities, bar code reading, imaging and Wi-Fi connectivity, as well as Symbol's fixed RFID readers (Symbol AR400 series) and EPC Class 0 read/write tags. "The Symbol RFID solution gives us unparalleled visibility for our products throughout the supply chain," says Matthews. "We are experiencing 99 percent read rates at this time with Symbol's RFID readers and tags, far surpassing the results of other equipment we tried."

At the time of this interview, Matthews said Pacific Cycle was also in the process of deploying SAP's Auto-ID infrastructure -- a technology that was previously unavailable to the company during pilot phase. The Auto-ID Infrastructure can be integrated with Auto-ID connectors to Pacific Cycle's SAP R/3 backbone. It adds a layer of intelligence between the reader and the application, and collects, analyzes and manages high volumes of real-time information from tagged items, environmental sensors and real-time locating systems.

Racing toward ROI

With an integrated RFID system in place, Pacific Cycle expects to know exactly where and how long its products sit in one spot. "Knowing the location of every item in our distribution center will make it possible to reduce our inventory levels while reducing backorders," says Matthews. "And the near-perfect accuracy provided by RFID technology should reduce time spent searching for product and chargebacks."

Perhaps one of the larger benefits will surface once Wal-Mart implements RFID at the individual item level. Pacific Cycle will be able to track its products from the back room to the retail floor, so it knows exactly which items are out for retail sale. "We only have one or two bicycles on the floor at any given time, so once they sell a bike, we can make sure the retailer gets a new bike from the backroom," says Matthews. "It's not about just having the information, it's about getting the retailer to take action."