SAN FRANCISCO -- Hannaford Bros. began testing various combinations of radio frequency identification (RFID) tags and readers with suppliers at its Winthrop, Maine, GM/HBC distribution center in mid-February, according to Cindy Boyt, director of distribution technology and process engineering, Hannaford.
Hannaford's RFID program is part of the retailer's strategy for building foundational change that Boyt described last week at Food Marketing Institute's Distribution Conference at the Omni Hotel, March 13 to 16.
"We are focusing on the longer-term benefits that RFID will bring in the form of better customer service, rather than searching within the four walls of the DC to justify the investment," said Boyt. "On the technology side, we have work to do when it comes to finding the right combination of tags and readers, and the associated hardware and software."
In January, Hannaford installed two RFID reader towers in its Winthrop facility. They are provided by Mountain View, Calif.-based Blue Vector and are referred to as "Momma Bears" by Hannaford.
Last month, Bill Homa, Hannaford's chief information officer, told SN that one of the vendors Hannaford will be working with on RFID at the Winthrop DC is Gillette, with which a midyear trial is planned.
Although Hannaford's RFID pilot is still new, the retailer has already experienced some unique challenges.
"We will certainly struggle with the same problems that other retailers do, like those associated with read accuracy and tag costs, but we find some interesting obstacles that are not quite as obvious," said Boyt. "There is a lack of East Coast [suppliers] who are willing to partner with us. If we were located in Texas, we would have a million vendors willing, ready and able to do it. Being in New England, and particularly in Maine, is a real struggle for us."
Hannaford began preparing its supply chain processes for RFID last year when its Belgium-based parent, Delhaize Group, adopted a global learning initiative.
"Delhaize embraced the concept of being a learning company," said Boyt. "It's worked collaboratively in the U.S. with the supply chain groups of Hannaford and [Delhaize subsidiary] Food Lion to create a cross-company vision of becoming a consumer-driven supply chain where products and information flow through optimal channels."
Last February, Delhaize formed a global team to explore RFID and learn about its potential. The team decided on two separate pilots.
"The European group focused on a close-looped pilot program designed to control the movement of meat through a Belgium processing facility," Boyt explained. "In the U.S., our focus has been on the supply chain, RFID readiness, process improvements and integrating vendors into the flow. These initiatives will form a solid foundation for the potential future integration of RFID technology."
Hannaford's objective is to become a leader in supply chain processes and a fast follower in RFID, according to Boyt.
"I would be lying if I told you that we knew exactly when we'd be in a position to leverage RFID in the future," she said. "I do know that because we've begun piloting RFID, we'll be well positioned organizationally, and among the first companies to leverage the technology, when the time comes."
In preparation for that time, Hannaford has enhanced its supply chain foundation through its new Advance Shipping Notice (ASN)-RF receiving initiative at its primary Portland, Maine, DC.
So far, the system has eliminated the need for paper matching, has improved accuracy and productivity, and has eliminated the need for a separate clerk to resolve receiving issues on the dock, reported Boyt.
"We're enhancing the ASN receiving process to automate the capture of code dates for fresh items, as well as catch weights where they apply," she explained. "The initiative supports our goal of increased receipt accuracy and improved turnaround at our receiving dock. More importantly, it will be the launching pad when we leverage [RFID] technology once it becomes feasible for Hannaford."
Hannaford faced internal challenges as a result of its new system.
"A magnitude of process change was required to support the new ASN-RF receiving process," said Boyt, who acknowledged that some associates initially struggled with the change.
To help lessen the burden, Hannaford makes associate preparedness a priority. Specifically, it has created a template for embracing, defining and implementing process change, according to Boyt.