RFID reduces out-of-stocks, enables higher inventory accuracy and gives significant time savings in many retail processes. In this article, the store processes that benefit most from RFID technology are discussed.
Store processes that RFID shines in
There are several possible applications of RFID in the retail
environment and the results are impressive. Many processes can be
greatly improved through implementation of RFID technology. In
order to have a clear focus, this article will concentrate on
retail processes that RFID really shines in. Therefore this article
concentrates on RFID usage in goods-in, inventory and cycle count
processes as well as when localizing items. Requirements and
operational processes vary from store to store; I aim to give best
practice recommendations on how the most typical processes can be
improved with RFID.
RFID in goods-in processes
When stores receive shipments, the items usually arrive in boxes
in the back-store. In the back-store, arriving goods will be
registered, entered in the ERP and then transferred to the storage
location or to the shop floor. How does an RFID application affect
the goods-in process?
RFID reading is extremely fast. When goods arrive at the store
items can be scanned without line of sight. This means that an RFID
mobile computer can read RFID tagged items through the box without
the personnel having to open it. The shipment and its contained
items can be scanned quickly, avoiding time and resource extensive
manual tasks. Avoiding that staff has to go through the shipment
item by item, significantly shortens the time spent in the goods-in
In cases where the retailer has an advance list containing all
items expected in the shipment, additional benefits can be reaped.
The shipment will be identified and the RFID mobile computer will
notify whether all expected items have been found.
Besides from speed, the goods-in process needs to be carried out
with high accuracy. Shipments only arrive once at the store; the
staff only has one chance to scan all the contained items
correctly. The achieved accuracy in goods-in processes must be
100%. RFID technology is not only fast, but also precise. It
achieves high accuracy as human errors are avoided.
For retailers it is crucial that items that arrive at the store
are registered in the backend system as soon as possible. Fast and
flawless goods-in practices allow that the backend system is
quickly up-to-date and items can be moved swiftly to their storage
location or to the shop floor. As we all know, an item that is not
on the shelf cannot be purchased and a staff member counting items
is not on the shop floor serving customers.
- time and labour savings
- fast scanning of items (does not need line of sight)
- high accuracy
RFID in inventory processes
There are two large reasons that make RFID shine in inventory
processes. For one, retailers strive towards achieving full
visibility and accurate stock information in order to avoid
out-of-stock and over-stock situations. Secondly, inventory
processes via conventional data capturing is very time consuming
and labor intensive.
The industry view is that an acceptable level of inventory
accuracy is at 95%. Unfortunately many retailers face far lower
accuracy. This is where RFID technology comes in. With RFID
inventories can be carried out with increased speed and high
accuracy. In fact a stock count can be done 10 to 15 times faster
with the help of RFID. This means that hundreds of items can be
scanned in seconds. Thanks to the fast process, it allows taking
inventory more often, which increases the stock accuracy rate.
There are many ways that inventories are executed. Best practice
is to carry out inventory against an expect list. It is also
recommended to perform smaller stock takes often, possibly even
daily. RFID technology allows the RFID reader to work against an
expect list that contains information on what items to expect. The
RFID reader will then only take the items of the expect list into
account during the read. Retailers are able to perform location
specific counting where different areas are specified or the shop
floor is divided into sections. That way sections of the store can
be quickly inventoried and produce more up-to-date information of
the store inventory.
- fast inventory
- high accuracy
- less out-of-stock situations
RFID in cycle count processes
Cycle counts are fast, partial stock takes that enable retailers
to focus on a product group of choice. In retail environments
certain product groups are more in focus than others. These product
groups can benefit from quick cycle counts that can be performed
often. This supports that there is up-to-date information available
on NOS (never out-of-stock) items at all times. Focused cycle
counts can be carried out in short intervals quickly and
effectively help avoid out-of-stocks in key product groups.
- focused stock takes of a product group
- fast stock take
Localizing items with the help of RFID
Localizing items in a store environment is generally a need that
is initiated by the customer. Being able to localize lost items in
the store equals good customer service. RFID technology can aid
with localizing items and this is unique, as such is not possible
with conventional e.g. barcode technology.
With RFID technology the mobile computer can assist in guiding
store personnel into close proximity of a specified item. Lost
products can thus be located fast and easy. Additionally, similar
products can be localized easily with RFID by scanning a tag or
barcode and then adjusting parameters such as size, colour. The
reader will give information on availability and the guiding
process to the desired item can be initiated.
Furthermore, localizing functionalities can also greatly help
with picking list processes in omni-channel operations or aid to
correct misplacement problems.
- improves customer service
- fast product search
- quick guidance into close proximity of searched items