2007.01.22

Demonstration Experiment for "Source Tagging" with application of IC tag to be embedded into products from the production process
-- Tests will prove efficiency of the new system to create a whole process of management of women�fs footwear at large-scale department stores from production, distribution to sales --

NTT Comware Corporation (below, NTT Comware; Head office: Minato-ku, Tokyo; President: Yuhji Imai) will commence "Demonstration Experiments of Electronic tag for efficiency of distribution and logistics" in collaboration with Japan Department Stores Association on January 22, 2007. This program is led by Ministry of Economy, Trade and Industry. "Source Tagging" is applied to women's footwear from its production process in order to achieve efficiency of the supply chain concerning manufacturers, whole sellers and shops as well as advancement of the supply chain using the tag data. This project is conducted in cooperation of 7 department stores including Odakyu Department Store Co., Ltd., Keio Department Store Co., Ltd., Takashiimaya Co., Ltd., TOKYU DEPARTMENT STORE CO., LTD., MITSUKOSHI LTD., HANKYU DEPARTMENT STORES, INC., and IZUTSUYA Co., Ltd., and its 19 shops.

NTT Comware and Japan Department Stores Association have started a joint program for the electronic tag demonstration experiment for women's footwear shops in Fiscal Year 2004, as led by Ministry of Economy, Trade and Industry. In Fiscal Year 2005, MITSUKOSHI, HANKYU, TAKASHIMAYA have adopted the system for a practical use. This system is currently used in 14 shops. In spite of the progress, there remain some issues need to be tackled for widespread use. Firstly, the electric tags require costs of manpower to place the tags by hand at Logistics Centers in the distribution process. In order to reduce the cost, it is necessary to create a system of Source Tagging and a business environment to facilitate its introduction to the industry. Another issue is how to standardize the electronic tags for promotion of B to B use.

This demonstration experiment is to study the practical application of Source Tagging and a shared type system to promote it. Source Tagging uses the electric tags to be embedded onto the existing bar code stickers on shoe boxes. This system aims to achieve efficiency of the entire supply chain including reduction of workload for product inspections, and automation of vouchers. In this experiment, the shared system is used for study and consideration of related issues such as cost reduction for introduction of the system and strategic use of the tag data for Merchandising (*1). This B-to-Bo shared system may also be used to study any processes necessary for user management, security of the system and warranty of the performance.

NTT Comware is a pioneer of EPCglobal-complied RFID Middleware in Japan as a member of AutoID Center (currently EPCglobal (*2)) Technology Board since 2002. This state-of-the-art technology in Japan is appreciated as an achievement of research and development for AutoID. Based on the achievement of this Middleware development, the electronic tag inventory management system has been provided to the three major department stores in Japan including MITSUKOSHI, HANKYU, TAKASHIMAYA following the demonstration experiments conducted under supervision of Ministry of Economy, Trade and Industry for their department stores program in Fiscal Year 2004. NTT Comware accumulated knowhows of data and traffic control using the electronic tag and specific techniques for actual operation of the tags according to the experiences, and further expands the business area of the system beyond the inventory control of department stores.

In addition to the three department stores which the electronic tag system has been introduced for the women's footwear section, the demonstration experiment will start with the four department stores to increase business opportunities of this system. NTT Comware also proceeds problem solving and promotions of the system at the same time, in order to make this system practical as soon as successful results are achieved. Specifically, the shared system with reliability, useability and expandability is expected to be developed for a practical use next fiscal year. Further study on technical issues with Source Tagging and hardware will also be conducted. A tag data collection system will also be studied aiming its practical use in order to link them to CPFR (*3) for merchandising.

*1 Merchandising
Merchandising is one of marketing activities to provide products to satisfy customer needs at an appropriate quantity and price, or a commercialization program.

*2 EPCglobal
EPCglobal (Headquarter: Princeton, New Jersey) is a non-profit joint venture organization established between EAN International (the international organization of bar codes) and the Uniform Code Council, UCC (the logistics code organization in the United State), which has various working groups for standardization of various items. 173 member companies currently participated in this organization as of December 2006.

*3CPFR
CPFR is to the Internet-based process for both retailers and manufacturers to make plans in cooperation, for prediction and supply of products.