One of the benefits of RFID technology is its ability to track individual items in real time. While the most highly publicized initiatives have involved tagging cartons and pallets, a Dutch bookseller and a third party logistics (3PL) provider are offering a first glimpse of how future supply chains might operate.

More importantly, the Netherlands' largest book chain Selexyz, a division of Boekhandels Groep Nederland (BGN), is also closing in on where the return on investment from item-level tagging may be found.

Working with Centraal Boekhuis, a 3PL that ships to more than 1,500 book retailers for 600 Dutch publishers, Selexyz recently implemented a "warehouse-to-consumer" supply chain in a new store in Almere, a suburb of Amsterdam (Progress Software, 781-280-4000 and CaptureTech, 31-252-241544).

Unlike other retailers, Selexyz is bypassing the use of RFID on cartons and pallets altogether. Instead, Gen II RFID tags are applied to individual books in the distribution center. The information written to those tags is then used to:

• Create advance ship notices (ASN)
• Automatically receive books in the store
• Provide visibility to the location of books in the store
• Improve customer service
• Drive store replenishment
• Streamline inventory processes.

Although the solution was just rolled out in April, Selexyz is already seeing benefits, including savings from a smaller staff and the time it takes to do inventory, according to Jan Vink, the retailer's IT director. "We can do a complete inventory in just a couple of hours without closing the store for a day."

The item-level supply chain begins in Centraal Boekhuis' distribution center in Culemborg. There, the 3PL stocks 80,000 book titles and ships nearly 55 million units a year to retailers in the Netherlands and Belgium, according to Ronald Janssen, Centraal Boekhuis's chief information officer.

The Culemborg facility is highly automated. Inventory management is optimized with a home-grown warehouse management system, wireless radio frequency (RF) communication and bar code scanning. In addition to narrow aisle rack and bin storage, the facility includes an automated storage and retrieval system (AS/RS) with three storage/retrieval (S/R) machines and room for 25,000 pallets. Pick-to-light and a tilt tray sortation system are used in the picking operations while robotic arms automatically add shipping materials and seal cartons for shipment.

After receiving an order from Selexyz, books are picked and sorted to packing stations at the Centraal Boekhuis DC.	At the end of the packing station, operators can scan a bar code on each book. That information is electronically written to an RFID tag.

There, the box is unpacked and an operator scans a bar code on the book. The scanned information is written to the RFID tag, which is applied by hand before the box is repacked. The information written to the RFID tag is also used to create an electronic ASN that is forwarded to Selexyz.

In the future, as Selexyz ramps up its volume, Centraal Boekhuis will automate the tag-application process.

Once the tags have been applied, the cartons are delivered by conveyor to a shipping area where they are loaded onto pallets or roll carts for store delivery.

At its Almere store, Selexyz has created an RFID-enabled receiving and putaway process that resembles a miniature version of those same processes in a typical distribution center operation.

When the books arrive at the store, unopened cartons are conveyed through a scan tunnel. In a matter of seconds, an RFID reader scan compares the contents of the cartons against the ASN and receives the books into the store's inventory management system. The system also automatically sends an e-mail alert to customers who have placed special orders for books now available for pick-up in the store.

Once the inventory system is updated, the books are placed on a mobile cart equipped with an RFID reader. Using the collected information, the inventory management system directs the store staff to the right department on the sales floor for each book. Retail shelving units also have an RFID tag that uniquely identifies each unit. Clerks scan the RFID tags on the book and the shelving unit to associate each book with a location. That information is updated in the store inventory system and made available to store personnel and customers.

The whole system is fast and efficient. "When we opened the store, we were able to scan 38,000 books in less than two hours," says Vink. "Using bar codes, the process would've taken an entire day."

RFID, however, isn't used just to update inventory. While the store still uses standard shelving on the store floor, smart shelving equipped with an RFID reader has been installed in the customer service area where customers pick up their books. "We can type customer information into the system and know the exact location of a book on the smart shelving," says Vink.

Likewise, customers can type the title of a book they're looking for into kiosks located throughout the store. If a title is in stock, it will tell the customer where to find it based on the information collected when the book was putaway. If a title isn't on the shelves, a customer can place an order. By entering an e-mail address, the customer can be notified when a book enters the store.

Once the sale is completed, the RFID tag is killed or removed before it leaves the store to avoid any issues of privacy. That also adds a layer of security. "Any tag that's still active will automatically trigger the security system," says Vink.

While the new system has only been up and running for a short time, Vink says the system is surprisingly stable. "We are achieving 100% item-level tagging in the store, and our orders are more than 99% accurate," he says. "We have much better control over our inventory than in our other stores, and we're able to operate the stores with a smaller staff. We will definitely roll this out to other stores."