One year later

A candid Q&A with Dick Cantwell on the state of gillette's RFID vision
It goes without saying that RFID is a big deal at Gillette. Steering the company's RFID vision is Dick Cantwell, who believes that RFID and the EPC are "transformational technologies" that enable business process change across the supply chain through better visibility of inventory and close collaboration with retail partners. Since Gillette spearheaded last year's RFID Best practices section, we were very curious to check in for an update.

Last February, you described to CGT a "launch-and-learn" approach to RFID. Inquiring minds want to know: What have you launched and what have you learned?

We actually commenced our own pilots within our own four walls back in 2002, and since that time, we have learned a great deal about the Electronic Product Code and its applications. A key early learning was that the EPC was not simply a technology that you could "plug and play". Instead, it was a technology that allowed you to re-think and re-engineer your supply chain and with that ability, new opportunities for the technology became apparent. The Gillette pilots within our four walls demonstrated that we could achieve a ROI of in excess of 20 percent in operational and efficiency savings per distribution center. As we extended the pilots with retail partners or put another way, as we extended the EPC network beyond our own four walls to include the retailer's supply chain, we began to realize the benefits that we had always envisioned.

These benefits included improved shipping accuracy, reduced invoice queries, electronic proof of delivery and better product availability in the back room of stores. For example, two recent pilots with a U.S. retailer demonstrated the additional opportunities that EPC will deliver for the retailer, the manufacturer and the consumer. The first pilot was based on a promotion involving our female razor system, Venus. The EPC-enabled promotional cases allowed us to establish that the cases had been shipped on schedule and had arrived in a store's back room in time for the start of the promotion. The EPC data showed 33 percent of participating stores failed to move display shippers of Venus razors from backroom shelves to selling floors by the start of a scheduled promotion. At stores that did move the item on time, sell-through of the top-selling razor was 19 percent higher than at non-compliant stores.

The second pilot again involved a promotional campaign that this time focused on Braun electric razors for Father's day. Of the 19 participating stores, EPC data showed only six moved the display shippers of the Braun shaver to sales floors by the start of the two-week promotional selling period. Eight others got the display shippers to their floors after the start date, but before Father's Day. And the remaining five participating stores moved the promotion to their sales floors only after Father's Day. Stores that had the item on the selling floor for the full two-week sale saw 61 percent greater sell-through than stores that were late, or failed to put the shaver out before Father's Day at all.

These pilots clearly demonstrate the opportunity for increased sales through better retail availability than can be enabled through the EPC. It also demonstrates the improvement for the consumer with products where they want them, when they want to buy them. It also demonstrates the importance of the EPC in inventory planning. Let me use the two pilots as examples.

Without these EPC insights, a retailer looking back at the promotion's sales figures could conclude that it had not been overly successful and as a result, either order less for a similar promotion or elect not to participate. With the EPC insights, the retailer sees a far different and more accurate picture. They understand why the promotion was not overly successful and can change processes to ensure promotional goods reach the sales floor where they know they will perform. Consequently, they will potentially order more to ensure they realize on the sales potential.

Around this time last year it was announced that a little company called Procter & Gamble would be purchasing Gillette. How has the acquisition affected Gillette's RFID plans? What has changed? What has stayed the same?

The announcement of the planned merger was made on January 28, 2005, and finally approved in October 2005. Both companies had been original founding members of the Auto-Center so it was clear that we both shared a similar vision for the improvements we believed could be achieved through the use of the EPC within our supply chains. That vision has not changed and we have recognized that the combination of the two companies has given us both even greater insights into the technology and greater strengths. We remain certain of the benefits that EPC technology will deliver to the retail industry.

One of Gillette's latest products is a razor that emits electric vibrations to achieve an unbelievably close shave. Is this the type of product that could ultimately benefit from item-level tagging? Why or why not?

We are still some years away from individually tagging products on a wide scale basis to be commercially viable. Today, an EPC tag is below 10 cents but for wide scale item level tagging, a tag would need to cost one cent or less. As the technology expands and costs are further reduced, we will look closely at the benefits item level tagging will bring to our own operations and more importantly to the consumer and the retail partner.

Was the name change from The Gillette Company to Global Gillette a way for P&G to incorporate its own stamp? Or is this a sign of things to come for Gillette, i.e. global expansion?

The merger of the two companies results in the creation of a single, legal entity. The Gillette Company as a single legal entity ceases to exist. Gillette is now a business unit within P&G and will be known simply as Gillette.