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December 17, 2017
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Levi Strauss' "wonderful world" of RFID

The standards organization GS1 US has honored the clothing company's pioneering efforts to use auto-identification technology to improve inventory control and accuracy.

In a well-known television ad from 1985, a man wearing nothing but Levi's 501 jeans sinks into a bathtub while Sam Cooke croons the opening lines of the song "Wonderful World": "Don't know much about history/Don't know much biology..."

The song's lyrics notwithstanding, it's safe to say that there's one thing San Francisco-based Levi Strauss & Co. does know a lot about: RFID technology.

In recognition of its pioneering efforts in implementing the auto-identification technology, the iconic clothing manufacturer recently won the 2016 Apparel and General Merchandise Operational Excellence Award presented by GS1 US, the standards organization that is responsible for the electronic product codes (EPC) and standards used with RFID. The award is based on a vote of the 130 member companies in the organization's Apparel and General Merchandise Initiative.

Levi Strauss's RFID journey began in 2005 with a pilot program that involved tagging individual pieces of clothing for one customer in the United States and Levi Strauss retail stores in Mexico. Since then the company has expanded its efforts and is now tagging 12 million items each year.

"Levi Strauss was one of the first companies that stood up on behalf of the technology and promoted it as a powerful tool for improving inventory accuracy," says Melanie Nuce, GS1 US vice president of apparel and general merchandise.

As it ramped up implementation of the technology, however, the clothing company found that it also had to rework its supply chain operations. Originally, Levi Strauss tagged its jeans and khakis at its distribution centers (DCs), but that soon became inefficient. The company then decided to move RFID tagging to the factories and worked with its 50-plus manufacturing partners to do so. According to Nuce, tagging at the manufacturing source has proved to be more cost-effective and scalable than tagging at distribution centers further downstream because RFID tags can be applied at the same time that other clothing labels and tags are attached to the merchandise.

To accomplish the transfer of tagging to the manufacturing facilities, Levi Strauss worked closely with its partners to educate them on using EPC standards, sourcing and applying RFID tags, compliance requirements, and the overall benefits of RFID. In 18 months, the company went from tagging 100 percent of its U.S. apparel at its own DCs to tagging more than 85 percent at its vendors' manufacturing sites. The company plans to continue to expand the program.

That change resulted in significant productivity improvements and double-digit cost savings, according to Levi Strauss' award application. Tagging at the manufacturing source also has the capability to minimize disruption with the company's garment vendors (by simplifying the tagging process), improved inventory accuracy throughout the entire supply chain, and reduced shipping costs, according to the apparel maker.

Levi Strauss received the award at the GS1 Connect 2016 conference. GS1 also presented four other awards at that time. Dan C. Smith, former chief information officer at Saks Fifth Avenue, Lord & Taylor, and Hudson's Bay Co. and current president of RetailWise Consulting, received the GS1 US Apparel and General Merchandise Roger Milliken Career Achievement Award. UPS was presented with the Corporate Social Responsibility Award for using GS1 standards to enhance electronic links with customers while reducing its carbon footprint. Dillard's Inc. received the Standards Innovation Award for using GS1 standards to automate the capture and sharing of product information for e-commerce product setup and publication. The nonprofit The Blessing Basket Project received the Small Business Standards Success Award.

Susan Lacefield is Senior Editor of CSCMP’s Supply Chain Quarterly.

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