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The Warehouse Partners IBM

The Warehouse Limited partners with IBM to investigate the use of RFID to improve stock availability for customers

The Warehouse Group Limited has selected IBM as its lead partner to undertake a proof of concept to explore how Radio Frequency Identification (RFID) can be used to improve stock availability for customers through enhancing its supply chain processes, particularly in-store stock management. This is believed to be the first significant retailer-led initiative of its kind in Australasia.

Alien Technology Corporation, a leading provider of RFID solutions, is providing RFID readers & tags and initial field applications engineering support. Saito Group will provide RFID printers and RFID labels.

In August 2004 The Warehouse (TWL) established a cross functional RFID team led by the Information Services department. "During late 2004 and early 2005 we built an extensive understanding of RFID theory, RFID in retail, opportunities within TWL and the current capability of the Australasian market to support RFID programmes of work," says The Warehouse Chief Information Officer Owen McCall .

In April 2005, The Warehouse RFID team undertook a 'check and confirm' trip in North America and Europe. The team met with a variety of hardware vendors, service providers and leading global retailers in both the US and Europe.

"We believe RFID in retail is real. Standards and the cost curve are driving the reality closer to wider consumption and the leaders are learning by doing," says Mr McCall. "We have evaluated a number of potential uses for RFID across our organisation and have focused on in-store stock management, which is the application we believe will provide the greatest benefit to our customers at this point in time."

The Warehouse selected IBM as the lead partner for the proof of concept due to IBM's strong global commitment to RFID and a strong local presence. The proof of concept will utilise IBM's expertise in RFID consulting along with IBM software and hardware.

IBM NZ Wireless Practice Leader Brent Menzies believes that The Warehouse's proposed Retail RFID model is the first and most progressive of its kind in Australasia. "We are optimistic that The Warehouse will see a significant return on their investment in RFID through being able to offer improved service to its customers and drive improvements to supply chain efficiency and capability."

Alien Technology Corporation was chosen due to its industry leadership position and ability to support New Zealand standards. Andrew Berger, VP International of Alien Technology commented "we have been working closely with The Warehouse, IBM and Saito to deliver promising results from the proof of concept activity. This has reinforced our belief that RFID can enable significant service improvements for customers of The Warehouse."

If successful, the proof of concept stage will be followed by a pilot in 2006 to further refine how and where RFID can be used by The Warehouse to improve supply chain execution and improve customer service levels.

The Warehouse team was led by Alan Mayo, Group IT Architect, and Caleb Nicolson, Supply Chain Programme Manager.


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