Marks & Spencer (M&S) (www.marksandspencerlondon.com/ca) is an iconic British retailer, selling clothing, housewares, and prepared food items. In the past, M&S tracked its inventory with optical scanners and bar codes. But the system was too slow and error prone. As a result, M&S decided to implement RFID technology back in 2001. The company has since become a pioneer in RFID use.

To see how well the technology worked, M&S started its RFID experiment by using reusable RFID tags to track shipments of fresh food between its suppliers and distribution centres. M&S suppliers place information on the tags indicating the food trays' content and expiration dates. When the trays arrive at the M&S receiving depots, workers use RFID readers to scan the tags. Fresh items with short shelf lives are then shipped quickly to M&S stores. After being distributed to stores, the trays are returned to suppliers to be washed, refilled, and recoded. How did the RFID experiment go? The system was rolled out across the entire M&S network, one of the biggest in the United Kingdom. M&S now tracks about 10 million RFID-tagged trays containing food or fresh flowers and plants, as they move along its supply chain.

Soon after the successful launch of RFID tags for its food items, in 2004 M&S launched an RFID trial to tag and track 10,000 items of men's suits, shirts, and ties. This effort increased inventory accuracy so impressively that M&S rolled out the RFID tagging to all types of men's and women's clothing, from casual to dressy.

M&S identified the clothing items with RFID tags from Avery Dennison Corporation (www.averydennison.com), which had supplied M&S with 1 billion tags as of early 2015. Avery Dennison is a global manufacturer of pressure-sensitive adhesive materials, apparel labels and tags, and RFID tags.

Initially, M&S used fixed RFID readers that were built into carts equipped with lead acid batteries as a power source. In 2006 and 2007, the company replaced these readers with two-piece readers that consisted of a reader linked to a handheld scanner via Bluetooth. The readers are stored in the back office and are deployed on the sales floor either in the early morning or in the evening.

Sales assistants select a store department from a drop-down menu on the handheld device and then read each item located on the sales floor and within the store's stockroom. The RFID system enables M&S to accurately read merchandise at a rate of up to 15,000 items per hour. It also removes duplicate reads. After the scanning is completed, the mobile device transmits the data to a central RFID database via the store's wireless network. The company then uses this information to automatically update the store's database.

The item-level tagging of clothing provided M&S with a number of benefits. Perhaps most importantly, the retailer knows the exact amount of each particular item at each of its stores. Thanks to the new technology, M&S can ensure that the right products are shipped to the right stores at the right time. Inventory turnover has increased by 50 percent, and stockouts have been reduced by 40 percent.

Essentially, RFID creates a "single version of the truth" for the inventory levels in a particular store. These inventory levels are then used by all other M&S systems to calculate the correct allocation of stock for each store. Missing items in each store are replenished by the distribution system as part of the normal daily store deliveries. Also, the company's ability to keep the right number of clothes for each clothing size in its stores has improved customer satisfaction.

Another benefit of the RFID system is the time savings generated by the reduced number of calls that individual stores make to the head office or distribution centre to order missing stock. The stores are confident that if stock is available, it will be sent to them. This process has enabled store teams to focus on customer service rather than on stock inventories and adjustments.

In 2012, M&S upgraded to Generation 2 RFID technology on household items such as bedding and kitchenware. This technology enables users to manage multiple RFID readers and multiple RFID applications in close proximity. That is, it can manage interference between RFID readers. Generation 2 technology is also faster and more accurate than Generation 1.

M&S will use some tags for various apparel goods, others for beauty products, and still others for items containing metal. M&S is also working with Avery Dennison to develop a tag for liquid products. Metals and thick liquids can interfere with RFID signals, so they typically require more powerful RFID tags.

RFID also enables M&S to offer its customers more complete product descriptions, including size, colour, style, manufacturer, destination, and many other features. Further, it provides M&S with greater visibility into its supply chain in addition to more accurate item-level inventory. The retailer has reduced the costs associated with taking inventory annually, with excessive markdowns, and with theft and fraud. RFID also offers M&S the opportunity to implement an entire range of customer information services that help to seamlessly integrate the multiple channels through which customers interact with the retailer.

In 2014, M&S achieved a landmark when it became the first retailer to have 100 percent of its items tagged with RFID technology.

Why did Marks & Spencer initially deploy RFID technology on a limited basis? In your opinion, was this the correct strategy? Why or why not? Be specific.