))) TI's RFID Smart Labels track leading brand sportswear through Production, Shipping, and Distribution - and reduce Shrinkage and 'Grey' Importing

))) DALLAS, TX (March 20, 2001)

Last spring, Goldwin Sportswear Europe, the European branch of one of the largest branded sportswear companies in Japan, began testing Texas Instruments' Tag-It™ RFID smart labels as part of a major programme to streamline their production, shipping and distribution processes. It also allowed them to tackle the growing problem of product diversion — i.e. 'grey' importing into unauthorised geographical areas.

The initial trial focused on ski-wear shipped from Goldwin's factory in Beijing, China to the company's main European distribution centre in Milan for distribution to retailers throughout Europe. In essence, TI's Tag-it™ smart inlays are sewn into each item of ski-wear allowing all products to be uniquely identified and tracked throughout the entire production, shipping and distribution process.

Grey market detection

Another benefit of the RFID system to this major brand owner was easy identification of the first case of 'grey importing' — i.e. selling branded products outside the authorised area. The suspect products were simply scanned by the RFID system and the unique coded data from the transponders allowed the shipping details and the 'guilty' reseller to be quickly identified and action taken to prevent it in future.

The same system is also ideal for detecting counterfeit products! Since it is practically impossible to forge or copy RFID Smart Labels, it is a simple matter to detect counterfeit products simply by scanning with either a portable or fixed reader.

Goldwin's three primary objectives for applying RFID (radio frequency identification) were to:
 ))) Reduce picking times to speed up customer's shipments
 ))) Track and monitor products during shipping and detect 'shrinkage'
 ))) Prevent unauthorised sales ('grey' imports) by distributors outside their agreed geographical areas

The solution

Italian systems integrator Euro Link SRL were asked to carry out a thorough study of Goldwin's entire shipping process from the production centre in China to the European distribution centre, through to retailers in each country. Their solution involved inserting and stitching tiny RFID smart label inlays between the lining and the normal label during production. TI's Tag-it™ smart inlays are tiny electronic 'chips' embedded in flexible labels that can be easily applied to products or packaging, making them ideal for use on clothing, fashion and other branded goods including drinks, music CDs, software etc. The tags incorporate sophisticated encryption and protection making them virtually impossible to copy or counterfeit, without enormous expense.

After the RFID label is applied during production, each item is scanned by a programming station where the operator stores specific data such as a unique product code, batch number, colour, size, and even distribution and customer details etc into the tag. This data is encrypted and can be read back at any time by an authorised reader unit.

The special read/write capability of the RFID tags allows key product and production information to be 'locked' to prevent it from being changed, while other data such as production status etc can be updated at any stage in the lifecycle of the product.

After production, the products are boxed and shipped to the main logistics centre of Nippon Express in China (the shipping carrier from China to Milan) where they pass through a special RFID tunnel reader that scans and uniquely identifies each shipment and adds it to the stock list. Knowing the stock list and the customers' orders, the system automatically generates a picking list for each customer using the labels on each item for identification. Once the final customer shipment is assembled, the combined shipment is scanned again by the tunnel reader to verify that the shipment is correct before being sent to Italy. The RFID system can read and identify multiple products simultaneously even when in their final shipping boxes, making scanning and verification very quick and easy.

When they arrive in Italy, the shipments are scanned again by a conveyor equipped with an RFID tunnel reader and the contents automatically identified and checked against what was shipped from China. If correct, the shipments can be delivered direct to customers in various countries. Any missing products or 'shrinkage' are immediately identified.

With the RFID scanning system, checking work that previously took several days of manual effort could be completed in less than an hour.

The system has certainly proved its usefulness with substantial time and efficiency improvements both in China, resulting from the automatic generation of picking lists and automatic checking of shipments before despatch, and at the distribution centre in Italy. As a result, plans are under way to expand the system to cover other areas of Goldwin's production, shipping and distribution processes.