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Walgreens unveils RFID at its DC in Anderson, S.C.

9/15/08 | John R. Johnson | email

Last year the new Walgreens distribution center in Anderson, S.C. was lauded for its policy of hiring disabled workers to staff almost half of the 700,000 square foot facility. Now the Anderson facility is making waves again, revealing that RFID technology plays a major role in enabling many of those disabled workers to do their jobs effectively by automating processes throughout the site.

The giant retailer announced on Tuesday that it has enabled 170,000 totes with RFID, greatly reducing paperwork and barcode scanning during shipment loading, as well as increasing shipping accuracy to its stores. The totes are reused, so the cost of the tags is amortized many times. The RFID strategy is being replicated for a second DC that Walgreens is building in Windsor, Conn.

"Walgreens has a long tradition of pioneering break-through technologies in the industry."
Randy Lewis, Sr VP of distribution and logistics

"What’s notable is that this is RFID functioning in the core of their operations," says John Beans, vice president of marketing at Blue Vector, which provided the RFID infrastructure solutions that power the Walgreens system. "Walgreens depends on the technology to run its operations. There is no backup system."

About 42 percent of the workers at the DC have a physical or cognitive disability, and the company hopes to employ 1,000 disabled workers through its DC network within a couple years. Working with a complex WMS system and an automated conveyor system that loads product onto each tote, Walgreens relies on RFID to scan all products loaded onto every truck in real-time. The system immediately alerts workers to any potential shipping errors.

Blue Vector’s edge intelligence software and infrastructure products are deployed on everything from dock door portals and conveyor stations to asset hospitals and tagging stations, allowing the system to verify correct products, quantities, dock door, and loading sequence before automatically updating the WMS. Each trailer’s shipping manifest is preloaded onto a Blue Vector edge appliance housed within dock door portals to ensure accuracy and rapid error detection. In effect, Walgreens is serializing every product that moves through the DC, without requiring the manufacturers to apply tags to each item.

When it comes time to load trucks, employees can concentrate on that specific task. "The ability to have automation supporting the workers is a great thing," says Beans. "They don’t take on several jobs on the dock, like loading the truck and maintaining paperwork. Their one job is to load the truck. The automation system stays in the background and makes their job easier."

The Anderson rollout represents one of the largest RFID deployments to date, involving 45 shipping doors, dollies, cart exit stations, and RFID tagging hospitals, where totes are re-tagged if they are damaged in the shipping process. The Anderson DC ships approximately 80,000 cases daily to over 700 Walgreens stores across the Southeast.

"Walgreens has a long tradition of pioneering break-through technologies in the industry," Randy Lewis, senior vice president of distribution and logistics for Walgreens, said in a press release. "Today, we’re leading the charge to revolutionize our distribution center systems and processes to drive significantly higher efficiency, accuracy, and ultimately higher margins."

The Walgreens story was just one retail success story presented at RFIDWorld last week. Retailer American Apparel also stole the spotlight, announcing that it is rolling out item level tagging for 99 percent of its products at its full chain of 230 stores by November. American Apparel is unique in that it displays every style of a fashion in every color and size, meaning that its entire stock is on the show room floor. However, tracking which garments were sold was a headache, a problem that RFID has cured.

Now, the retailer scans the entire inventory on its sales floor in two hours, and its entire stock room in 3.5 hours. In the first week of use at its Columbia University store in New York City, American Apparel removed 60 hours of labor from its processes and increased sales by 15 percent.

"RFID has uncovered so many problems we were having with our inventory," says Zander Livingston, RFID project manager at American Apparel.

Aside from faster checkout for customers, Livingston expects to utilize RFID to up-sell customers at virtual kiosks, and to implement loss reporting and loss prevention measures. "That 13 or 14 cent tag is showing its value," he says, noting that tags are removed from garments at the cash register and reused, further extending the ROI on the project.

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