RFID Tracking Gains Traction as Inventory Visibility Grows in Importance and Implementation Costs Decrease:
by Paula Heikell
We’re back from the NRF2016 Show in New York, where we saw just how far RFID is advancing for companies of all sizes. It’s not just for mega companies anymore. Following are some good case studies about the benefits of radio frequency identification (RFID) tracking for retail operations. For example:
“Do You Have This in a Size 7?”
Saks Fifth Avenue is one example of a company using RFID to improve its workflow and sales. At their flagship store in New York City, which has more than 4,000 individual shoes on display at any given time, it often took four days to manually check shoes on display. Now, sales associates use handheld RFID readers to collect information about samples in only 15 to 20 minutes. This means Saks can perform a 100 percent audit every day, prior to store opening, and ensure 100 percent representation.¹
No More Packing Errors on Similar Merchandise That’s Easy to Mix Up
RFID Journal wrote an excellent case study coat manufacturer Herman Kay’s five-phase plan that would begin with using RFID in its order checking process, and then deploying readers at weigh stations after goods are packed. “Many coat styles look very similar,” says Richard Haig, the company’s CIO and CTO, “and checkers have thus needed to visually inspect the hangtags and labels, often twice, before the products were packed for shipping.”² The company was able to reduce order packing errors very quickly in the early phases of the project. Other retailers such as Hy-Vee grocery chain, Marks & Spencer and Macy’s are also improving visibility and inventory control with RFID.
Fast – One Scan Instead of Many to Receive a Pallet of Computer Servers
Large consumer goods and electronics manufacturers are also deploying RFID to gain end-to-end visibility. One of our electronics customers, for example, found that RFID can save significant time by eliminating the need to scan each and every computer component being received on the shipping dock while delivering near-perfect accuracy.
According to a study by AMR Research, RFID adopters in the consumer goods industry reduced supply chain costs between 3 and 5 percent and grew revenue between 2 and 7 percent because of the added visibility RFID provided.
RFID is Now a Viable Option for Smaller Companies
Okay, you may say, “sure, it makes sense for large companies with huge inventories, but what about my midsized business?” It’s worth checking it out. For example, Stoll & Co., a small watch-repair firm with 62 employees, RFID tracking has transformed its business, making it more cost-effective and his employees more productive. Customer service has also been enhanced, as RFID provided the company with the ability to quickly identify each watch’s location, helping customer service representatives update customers on the status of their repairs.³
At Logistyx, we’re seeing a surge of interest in other industry sectors as well, such as high-end computer hardware, large machinery, furniture and other high-value products. These companies are in the process of replacing their barcode-based systems with RFID to track inbound receipt of goods as well as the internal movement of products as they go through assembly.
Why the Growing Interest?
Lower cost of adoption. According to a recent Journal of Commerce article, a passive RFID tag that cost 33 cents in 2003 now costs about 10 cents. Between the continuing advancement of RFID capabilities in mobile computers and this drop in cost, it is becoming an attractive option for more companies seeking to improve visibility and reduce costs.
Time savings. For example, one company that produces large network servers has accelerated the process of receiving large shipments of servers from 30 minutes or more down to less than five minutes. This is tremendous savings, due to the fact that the receiving team no longer has to physically walk up to and scan each server to verify it.
Workflow optimization. Another of our customers is replacing traditional barcode-based tracking with RFID to track the movement of computer components as they move, via carts through the assembly. The new system gives them 100% visibility into parts availablilty needed to keep the assembly lines moving and pre-empt any sudden shortages that could stop the lines. Yet another customer has implemented it to track furniture parts as they are put away during receiving. This eliminates the need for staff to search in multiple locations for the parts they need to assemble furniture.
Tracking of high-value field equipment. In another example, we’re working with a police department who plans to use RFID to track equipment such as scanners, mobile computers, etc., that police staff use on their daily rounds.
When you begin evaluating RFID technology options, you’ll quickly find that many companies offer RFID products. When reviewing, it’s important to consider total ROI they’ll deliver. Look for:
- An RFID provider who offers more than just the equipment. Ideally, choose a vendor who offers the software, hardware and implementation services you’ll need. You’ll gain the greatest return on investment by ensuring that the data being read from the RFID tags is shared with the right back-end systems such as your order fulfillment software and shipping software system for monitoring and decision making. Your vendor should have integration experience to help accomplish this.
- Make sure the RFID software is flexible. Some vendors offer software with the hardware, but it may have limited flexiblity. They may even suggest that you’ll have to alter your processes to make the RFID solution work. Don’t settle. Keep looking until you find a vendor whose software can be configured to match your processes, not vice versa.
- Industry experience. This is not an off-the-shelf technology. The parameters for a manufacturing or distribution site versus a health care installation are quite different. Choose a vendor who has pertinent industry experience.
- Ask for references. Any professional vendor will have references readily available. You want to be sure that the vendor you choose has previous project experience and positive results.
If you have questions about the viability of RFID item tracking in your operations, Logistyx can help you create an integrated RFID solution with your order fulfillment software and shipping software. Please feel free to send an email to email@example.com today.
Logistyx Technologies is a provider of carrier-agnostic e-commerce fulfillment software and shipping software solutions that enable shippers to manage all their small parcel, LTL postal, regional, national and international carriers on one platform. We also help companies automate their reverse logistics process for greater efficiency and lower cost. Contact us today.
Copyright © 2017, Logistyx Technologies. All rights reserved.
¹ Claire Swedberg, “Herman Kay Gains Packing Accuracy Via RFID,” RFID Journal, September 4, 2015.
² RFID Journal Events, Case Studies, “RFID in Retail and Apparel.”
³ Mark Roberti, “RFID is Not Just for Big Companies,” RFID Journal, July 1