The Italian luxury furniture company is having its suppliers attach a passive UHF tag to each piece of leather so that it can expedite the receipt of leather upholstery material, as well as its inventory-taking process.

By Claire Swedberg

Tags: Inventory / Warehouse Management, Manufacturing

Luxury leather furniture company Poltrona Frau Group has begun deploying a radio frequency identification system to reduce time and errors related to the receiving of leather upholstery material from its suppliers, and to inventory checks at its own storage area and third-party storage offsite. Roberto Boselli, Poltrona Frau Group's CIO and digital communications manager, will describe the deployment and future phases of the installation at RFID Journal LIVE Europe, to be held on Nov. 9 in London, England.

Poltrona Frau makes high-quality leather-based products for three sectors: residential, transportation and contract-based orders. Residential products include couches, chairs, tables and other furnishings, while transportation consists of leather seats for cars, airplanes and yachts. Finally, the contract sector includes auditoriums, theaters, lounges, museums, hotels, resorts and other companies that use the leather and textile-upholstered furniture at their facilities.

Poltrona Frau's leather suppliers attach an RFID label to the interior side of each piece of leather.

The company's suppliers make leather material (branded Pelle Frau) specifically for Poltrona Frau and send it to the company's manufacturing plant, located in the central Italian city of Tolentino, where the material is kept onsite until needed for a specific order. Each year, the company typically consumes 300,000 sheets of leather for the products it sells, of which there are approximately 200 different sizes, types and colors of leather offered.

Poltrona Frau always keeps a specific quantity of each type of leather onsite, ready for any incoming order. The company makes furnishings only after receiving an order, to ensure that the leather on each item in that order is a perfect match for its mates. The manufacturing process can take several weeks to complete, so Poltrona Frau promises the finished product will be shipped about four weeks after it is ordered. However, if the company does not have enough of a specific type of leather onsite, it must order more from a supplier; the process of creating that leather, including tanning and other treatment, can take six weeks.

For that reason, it is imperative that the furniture company's leather inventory never runs out. Before the RFID system was installed, when a pallet arrived at the receiving area, the staff manually had to examine the 100 or so pieces of leather stacked on that pallet to determine what had been delivered, and input that data into the company's enterprise resource planning (ERP) system.

When a piece of leather was needed, a staff member removed it from the warehouse and manually input data indicating what was being taken to the assembly floor. Inventory counts were conducted only twice a year because they were so labor-intensive. Poltrona Frau also had to send employees to the third-party company that stores additional inventory nearby. As a result, it typically took seven workers more than 10 days to count all inventory on and off site.

The process was not only time-consuming, but could lead to errors if a piece of leather was missed, or was incorrectly identified and entered into the system.

This year, Boselli says, Poltrona Frau began working with RFID systems integration and mobile app provider Aton to develop a solution using ultrahigh-frequency (UHF) RFID technology. Aton provided "process analysis, software development, RFID hardware integration and post-sales support," says Denisa Zara, Aton's corporate communications manager. The firm also selected the most appropriate hardware for the solution.

Roberto Boselli, Poltrona Frau Group's CIO

"The main challenge is related to process complexity," Zara states. "We had to analyze not only Poltrona Frau processes and systems, but also [those of] tanneries" in general. For instance, she says, to develop the solution, Aton used a heuristic method (a technique designed to solve problems with an approximate solution when classic methods fail), rather than more traditional algorithms.

Another challenge, Zara reports, centered around identifying the optimal tag positioning on each piece of leather, in order to accommodate the leather-cutting process.

Poltrona Frau started using the RFID solution for products destined to retailers for residential sales. This summer, the company began providing RFID labels to its three leather suppliers for this line of products. A label is attached to the interior side of the leather, near the edge, where the tag will not damage any leather that will be visible on the furniture. Because it is near the edge, that portion of the leather is likely to be cut away.

Suppliers are using their own software to input information related to each piece of leather, such as the supplier ID, item number, color, batch number and date of manufacture. All of that data is linked to the unique ID number encoded to the RFID label attached to that particular piece of leather. Suppliers then forward the information to Poltrona Frau as an advance shipping notice.

Once Poltrona Frau receives that notice, its Aton-based RFID software, residing on its own database, stores the tag ID number and other information for each piece of leather that will be arriving from that supplier. When the leather arrives on pallets, Poltrona Frau's workers no longer have to examine each piece of leather. Instead, they can simply wave an MC9190-Z handheld RFID reader, from Zebra Technologies, near the pallet to capture the tag IDs. That data is then forwarded to the ERP software via a software interface, enabling the system to retrieve all related information and update the status of each item as received. The Aton software can also display an alert on the handheld reader or computer running the software in the event that an item is discovered to be missing, or if an unexpected item has been received.

The receiving process with RFID typically takes 15 seconds for each pallet, Boselli reports. The leather is then stored until it is required for the first manufacturing phase. At the time that it's needed, staff members locate the leather and use a handheld to indicate which item is being transferred to the cutting area. If the tag ID is unreadable, they can alternatively scan a bar code also printed on the RFID label, or simply key in the ID number printed there as well.

During inventory checks, Poltrona expects to save many hours of labor. Although full inventory checks have not yet been performed using the RFID system, Boselli says the company anticipates the labor hours required to be approximately one day for one to two people, both onsite and at the third-party warehouse.

Because inventory checks will be faster, Boselli predicts that the company will be able to conduct them more frequently. This will ensure that the firm has a more accurate inventory account in its system, thereby enabling it to reorder leather materials as soon as they are depleted.

Poltrona Frau is now receiving RFID-tagged leather from its suppliers. By the end of this year, Boselli says, he expects his company's residential division to have finished tagging all leather that it has in stock, as well as updating the system with information related to each piece of tagged leather. Next year, the solution will be expanded to include leather for transportation-sector products, as well as for all other brands used for commercial customers.

According to Boselli, the system could also be expanded to other materials used in furniture making, such as wood. "We started with leather because we manage so many pieces that are each unique," he explains. "Then we can begin applying the technology to other raw materials."

The company tried multiple kinds of hardware before implementing the system on the residential side of its business, testing about 20 different types of tags, as well as a variety of fixed RFID readers, a tunnel reader and handhelds. Aton provided Poltrona Frau with labels containing embedded Lab-ID UHF tags made with NXP Semiconductors' Ucode 7 RFID chip. Staff members found that the handheld reader was the easiest hardware to work with. "They found the guns more comfortable both for incoming and inventory [reads]," Boselli says.