Item-level RFID Tagging for Apparel Retail Supply Chains

Posted by Ken Lynch on Wed, Feb 09, 2011 @ 07:51 PM

From tracking product recalls to PI accuracy to electronic proof of delivery and everything in between

RFID in RetailWhen we investigated and highlighted 100 unique uses of RFID on this blog, we came across many interesting, successful applications in the retail industry. Previous posts on RFID in Retail demonstrated how the technology has the ability to streamline operations and improve the customer experience, all while helping to boost the bottom line of retailers.

Equally interested in identifying uses of RFID in retail, The University of Arkansas Information Technology Research Institute (ITRI) embarked on a study that zeroed in on item-level tagging for supply chains in the apparel retail industry. The study, “An Empirical Study of Potential Uses of RFID In The Apparel Retail Supply Chain,” highlighted 60 business cases that span from plan-o-gram compliance to perpetual inventory (PI) accuracy to product recalls.

According to the executive summary, the study represents Phase I, which was to identify potential business cases for the use of RFID in an apparel supply chain. Key findings of this phase show the potential benefits of item-level RFID to include:

  • Improved backroom-to-shelf replenishment and greater perpetual inventory (PI) accuracy have the potential to increase top-line sales, due to higher product availability at the retail shelf.
  • Substantial reduction in labor costs, the largest percentage of variable costs, are achieved by improving inbound and outbound operations, decreasing the number of touches by staff per carton.
  • The ability of apparel manufacturers to audit the contents of each carton being shipped through an automated process, result in fewer deductions or chargebacks from the manufacturer’s retail customers.

Summing it up nicely, an RFID Journal story indicated that the biggest take-away from the study is the extent of RFID’s reach because it touches every aspect of the supply chain. That spectrum of RFID’s ability is evident in the number of use cases in that market segment alone.

Still not convinced that RFID in retail is on a path to significant growth?  Consider these recent headlines:

ABI Research: Global Apparel Markets Will Use 1 Billion RFID Tags in 2011

Truecount CEO Zander Livingstoon Predicts Retailers will Accelerate Rollouts of RFID in 2011

And just today, organizers of one of the RFID market's largest technology & solution focused events, announced this years' RFID Journal LIVE! will shine the spotlight on an apparel and supply chain focused showcase: RFID Journal Announces Live RFID-Enabled Supply Demonstration

We’ll be anxiously awaiting Phas II of the ITRI’s study, which will involve the measurement of ROI for select use cases identified in Phase I. Phase II is sure to bring about more compelling proof that RFID should be an integral part of the retail supply chain.

Please let us know your thoughts about the use of RFID in retail.

Tags: RFID, Retail, Supply Chain, Apparel

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