How RFID Helps Herman Kay Serve Department Store Customers

Chances are you have a coat made by Herman Kay Company hanging in your closet. The designer and manufacturer, based in New York City, produces approximately 5.5 million outerwear garments annually for brands such as Anne Klein, BCBG, Diane von Furstenberg, London Fog and Michael Kors. These coats are supplied to major department stores, from Macy's and Nordstrom to Lord & Taylor and Dillard's.

As retailers began incorporating radio frequency identification(RFID) into their supply chains a couple years back, CIO/CTO Rich Haig says these partners requested that Herman Kay supply RFID hangtags on its outerwear. "From a customer service and marketing point of view, it was something we needed to do to support our customers," he explains.

With the goal of shipping 100 percent of its garments with RFID hangtags by Fall 2015, Herman Kay partnered with SML and Avery Dennison to implement RFID hangtags for each of their labels. SML prints, encodes and ships RFID hangtags directly to Herman Kay's third-party production facilities in Asia; both SML and Avery Dennison supply tags which are printed and encoded in-house for the garments produced in Herman Kay's Dominican Republic facilities.

Herman Kay realized early on that there were many advan - tages to using RFID technology in its distribution facility, including making them a better partner with, and supplier to, its retail customers. The company partnered with xterprise, now SML Intelligent Inventory Solutions, to develop a deployment plan. Herman Kay integrated SML's Clarity™ Software with its A2000 ERP platform and deployed Nordic ID RFID handheld scanners for both checkers and packing stations.

Next, the company integrated outbound advance shipment notices (ASN) with Clarity and Alien RFID readers on the shipping doors at its Georgia warehouse. This allowed RFID tags to be read and verified to ensure that the correct cartons were being loaded onto the proper truck. To support the deployment, Herman Kay also created a wireless network with nearly 100 Aruba access points in the warehouse.

According to Haig, the project has been humbling. "We thought we were pretty good doing what we do. And we were. However, with RFID technology we can catch mistakes which previously may have gone undetected through the supply chain," he explains. For example, while a shipment of 600 pieces to one major retailer might be correct in terms of the total number of items, it was possible for a box of 12 black jackets to actually contain 11 black jackets — and one that was, in fact, dark blue. "It's hard to differentiate dark navy from black when each garment is in a plastic bag and under warehouse lights," Haig says. But with RFID, it's easy to catch any error as a carton is packed, long before a shipment ever leaves the warehouse. "The technology provides proof of authenticity that we're delivering what we say we are," he adds.

"In today's world, it doesn't matter if the grand total of shipped items is correct if you have overages and shortages in individual cartons. Our customers count on us to provide them with great quality merchandise, in the right quantity, at the right location, and at the right time."

Since going live this past fall, Haig says, the contents of the cartons are verified by RFID against the contents of the ASN before being loaded onto the trucks. Shipments to retailers will be potentially 100 percent accurate, leading to a reduction in chargebacks from retailers, and ultimately to a return on investment for Herman Kay. "The next step will be incorporating RFID into the receiving process, so that as containers are received, each garment will be scanned, enhancing the speed and quality of the receiving process," Haig concludes.

Jessica Binns is a freelance writer specializing in fashion, retail and technology.