Tweet me!Japanese publisher Shogakukan Inc. has implemented RFID technology in its operations to substantially reduce the return ratio of unsold books. A reduction in waste volumes was also critical.
Shogakukan estimates that annual financial losses in Japan would exceed USD 1.5 billion if some 25% of returned books were disposed of as waste. The RFID implementation has also had a marked affect on distribution accuracy.
In the first phase, Shogakukan has tagged its recently published Home Medical Dictionaries with UPM Raflatac's UHF EPC Gen2 Crab inlays. The complete solution has been developed by Suuri-Keikaku Co. Ltd.
Shogakukan itself has developed a binary sales system which it uses for RFID-tagged books. The aim is to motivate bookstores to better plan their purchasing operations by offering two alternative sales systems. Bookstores can choose consignment sales, where unsold books can be returned to publisher without expense. With the non-consignment option the margin offered to bookstores is higher, but returning unsold books to publisher means additional costs. Data concerning the choice of sales system is written to the RFID tags.
Bookstores may choose non-consignment sales for their first orders due to high initial sales expectations, for instance. Afterwards, it might be more suitable to switch to consignment sales for additional orders. With the data-carrying RFID tags, the system is easily manageable. Human error is eliminated by automating the data processing and logistics related operations.
"Shogakukan is an excellent example in its use of ultra-high frequency RFID tags to improve logistics in the book industry. The benefits are very concrete, which is why similar projects are currently under implementation worldwide. Various successful roll-outs are showing clear ROI values in the short-term," says Mikko Nikkanen, Business Development Director, UPM Raflatac, RFID.
Shogakukan reports that the new RFID-assisted sales system has been accepted by bookstores with good results. In the beginning stage, 50,000 copies of Shogakukan's Home Medical Dictionaries were sold through non-consignment sales. Total sales reached about 70,000 copies.
"Book clubs making direct monthly book deliveries have good potential to enjoy the benefits of a full RFID implementation. Customer return rates can rise above 20%, and high efficiency for returns in the supply chain is crucial. UPM Raflatac has channelled significant resources into the development of UHF products suitable for applications of this kind," Nikkanen concludes.
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