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From legacy to RFID

Madura McCormack | Dec. 21, 2012
Traditional Chinese medicine retailer adopts RFID in hopes of modernising business space

Based in densely populated Hong Kong, traditional Chinese medicine retailer Yue Hwa Chinese Products emporium faced the problem of rising real estate costs.

Additionally, a 2010 internal review revealed the IT environment of the company was made up of legacy systems.

"We were aware that our environment was made up of legacy systems [...] the question which came up was, why change a stable solution?" said Jacob Yu senior manager, Head of Information Technology, at Yue Hwa.

With every bit of retail space becoming more valuable and the need to rethink and start implementing new technologies to replace the legacy ones, the organisation needed to find a solution that would shorten stock taking time, address human errors, optimise use of warehouse space, and enhance workforce productivity.

Implementing RFID

"Yue Hwa is a traditional retailer specialising in Chinese cultural experiences. Our unique environment requires a specialised workforce and as time passes, it has been increasingly difficult to hire in this sector," said Yu.

According to Yue Hwa, the ageing workforce was one factor behind which solution to implement. The organisation had to take into consideration the ease of use and the special skilled employees' affinity for manual based processes that were prone to errors.

When asked why the company chose RFID, Yu explained that he believes the technology has 'future readiness'.

"Barcodes need a clear line-of-sight to scan, making it difficult and slow to work with in certain situations. They are good for a certain type or class of goods, rather than individual items. In comparison, RFID identifies and locates every single item to track, from trucks and forklifts, to returnable transit items (RTIs) as well as containers and their contents," Yu said.

Yue Hwa engaged ID-Tech (Hong Kong) Limited, a partner of Motorola Solutions, to deploy the chosen RFID technology. The retailer purchased 30 RFID handheld terminals for employee use and two RFID fixed readers for instalment along the loading bay pathway.

Benefits and plans ahead

It took 12 months between assessment and implementation of the technology, according to Yue Hwa, and the organisation benefited immediately from the decrease in risk of human error when it came to stock taking.

"Our previous manual, paper-based routine was prone to errors. It was difficult to keep track of missing orders and stock and in most instances, such losses went unnoticed and will only be reflected in our finances later on," Yu revealed.

With the reduction in annual stock take duration from 30 days to five days, Yue Hwa says it has been able to make it easier for employees as well as save on man hours.

"With the complete traceability afforded by the RFID technology, we were also able to better manage the reusable containers, thus further cutting down operational overheads. The total cost savings from improved accuracies in shipments and inventory management, faster order processing as well as reduced labour costs were significant," said Yu.


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