Jewelry Tracking Solution - Case Study

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Jewelry Tracking Solution - Case Study Powered By Docstoc

                     | Vasant Prabhu
       Business Need

With increasing competition many Gold retailers recognize the need to streamline their
operations so that they can serve the customer more effectively. With increasing
Business , the customer footfalls in the shop have increased and so has the size of
many shops selling gold & jewelry with multiple counters manned by salespeople.

With changing tastes & lifestyle and a younger population looking for lighter & newer
variety of designer Jewelry wear, the task of the Jeweller has also increased in keeping
many varieties of Gold & jewellery items on his display & stock.

The Jeweller today understands the need and rely on information technology now more
than ever. He is adopting various solutions like

   •   Closed circuit Cameras (CCTV) that helps him keep a close watch on the shop
   •   Smoke & Fire alarm system to detect any possible calamity
   •   Automated billing counters helps him raise bills/invoices efficiently
   •   Bar coding to help identify various items in the shop instantaneously
   •   Software to automate activities like ( supply mgt, inventory mgt, sales mgt) in
       the shop

However despite all these advancements Jewellers still rely on many old practices

   •   Items are moved to safe lock (back room) from the front shop(display) after
       manually counting & stock tallying at the end of day
   •   Manual slips are generated for items sent to workshop for repairs
   •   Items on display shelves are manually tracked & replaced after they are sold.

A lot of time is wasted on such age old practices, Jewelers realize that this time can be
put to more productive use either in increased shop timings, or spending time with the
employees. It will be a matter of delight for the employees if they are informed that
they can close the shop sooner than later after customer hours.

It is challenge for any Jeweler to manually track and monitor such a large volume of
items in the shop. Manually counting & stock taking of Inventory is not performed by
majority of the Jewelers for the amount of manual effort & time that it involves. On the
other hand many have chosen the less cumbersome means of bar coding & reading
information of Jewelry items.
       Movement of Jewelry items

The following illustrated diagram shows the 4 way movement of Gold & Jewelry items in
a typical shop

           Customers                       Salesmen,                        Suppliers,
           New & Old                       Worksmen                         Vendors

         Item movement across            Item movement across                   Item movement
            Shelves, Counters,              front & back shop                 outside the 4 walls of
         Salesmen & customers                                                       the shop

   1. Movement across Sales counter: Customer seeking to try out various display
      items on shelf and handing it back to salesman
   2. Movement across Service counter: Customers handing over existing
      Gold/Jewelry for repair/maintenance and collecting it back from shopkeeper
   3. Movement across Front & Back of Shop: Handing over serviceable gold/Jewelry
      items or receiving finished new goods for Inventory from workers
   4. Movement from outside the shop: Raw materials received from outside ,
       finished goods sent outside the shop for sales/exhibits/inter shop trade etc

As a result of this 4 way movement which spreads over several salesman, workers,
customers and involving several hundreds of items it is but natural that misplacement or
loss of items is inevitable.

The extent of loss varies from Jeweler to Jeweler depending on the size of the shop,
volume of Business, nature of processes & procedures etc. The Industry wide estimate of
such loss of items is pegged between 1% - 3%.
       How Garrett addresses the requirement

Garrett addresses a strategic need of Jewelers to help their business gain a real-time
tracking into movement of Jewelry items. It uses the latest RFID (Radio frequency
identification) technology for this purpose.

Each Jewelery item is tagged with a small inexpensive RFID label that consist of a
programmable silicon chip and an antenna that can transmit data to a wireless receiver.
The RFID reader in Garrett reads the transmitted information and processes it. The data
transmitted by the tag may provide identification or section information or specifics
about the product such a price, design, weight, content etc.

One or more of the readers information is then processed by the server which is the
heart of the RFID system, it exchanges information with the Inventory & transaction
database so that status reports can be displayed/produced

Unlike bar codes the RFID tags need not be scanned manually with a fixed vision of sight
and read individually. RFID tags work better and more data can be collected and stored.
All that a Jeweler has to do is pass the tray or stack of trays with Jewelry items through
the Appliance gateway once. The machine instantly picks up the signals from all the
tagged RFID items and instantly displays a list of passed items on the monitor.

When an item is sold or disposed the system checks out and the item is taken off the
RFID database. Conversely an item is brought into the system and is checked in on real
time basis.

Thus Garatte helps you to track what is coming in and going out of the safe or the
display shelf or the workshop, revealing to shop owners whether something has gone
missing during the day. There is also the potential to link the tagging system to RFID
gates to detect theft.
          Return on Investment

The following table illustrates the appliance utility value & the return on Investment on
Garette. It is based on a Business case scenario of a typical mid sized Jeweller with a
turnover of 5 Crs per annum. The prevention of losses due to item tracking is taken as a
revenue stream for the purpose of determining the payback period, the utility value and
the return on Investment. The average cost of the appliance is taken at Rs.7,50,000.00

Loss per missing item = cost of raw materials + workmanship

The appliance (Garrett) is expected to plug about 80% of missing items in the shop

The savings of 80% of missing items is taken as revenue, this savings value has been compounded at 5% growth rate over

the appliance life value.

Overall appliance life time value = compounded savings value – AMC costs

          Contact Us

Know more about how Garrett can help your Business grow! Call us for Sales enquiries
or a free demonstration

Vasant Prabhu
Nodes RFID
#138/S S-1, 2 floor
Harshitha Arcade
1st Main Road, Seshadripuram
Bangalore 20
Tel: 08064547717, 9886137580.

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