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System improves inventory accuracy of shoes & innerwear
21 Apr '10
5 min read
“In both situations, where there is an understated or overstated record, inventory is not managed to its full potential,” Hardgrave said.
In test stores, inventory accuracy improved by a total of 7.1 percent, which is a combination of the 4.48 percent control decrease mentioned above and a pure increase of 2.62 percent attributed solely to the use of RFID. When using RFID and factoring in control figures, understated inventory improved by 1.77 percent, and overstated inventory improved by 5.33 percent.
“The improvement to inventory accuracy at JCPenney can be attributed to both implementation of RFID technology and to weekly use of RFID replenishment reports to make in-store decisions,” Hardgrave said.
Research on RFID in the retail industry is moving from efficacy to implementation, Hardgrave said. In other words, retailers know the technology works, that it improves accuracy and efficiency. Now they want to understand best practices for introducing and implementing the technology. To address this need, a second generation of RFID pilot studies will examine how and when RFID may be integrated into business practices. For example, retailers depend on findings from the RFID center to make important decisions about which tags to use, which items to tag, where and when in the supply chain to apply tags, where and when to remove them, and how to use RFID tags in a way that is consistent with a company's corporate brand and image.
“These issues – selection of items, where and when to apply and remove tags, and, perhaps most importantly, the aesthetics of tagging – will be looked at in much greater detail in future studies,” Hardgrave said.
For this study, researchers used passive, ultra-high frequency, generation 2 tags. Generation 2 refers to the highest-performing technical protocol for passive RFID tags, as approved by EPCglobal Inc., the organization that sets international RFID standards.
The University of Arkansas RFID Research Center is a subunit of the Information Technology Research Institute within the Walton College. The center was formally approved by the Arkansas Department of Higher Education and began operating in early 2005. In September 2005, the center passed performance accreditation criteria established by EPCglobal Inc. The center is the only accredited academic EPC/RFID test center in the world.
In test stores, inventory accuracy improved by a total of 7.1 percent, which is a combination of the 4.48 percent control decrease mentioned above and a pure increase of 2.62 percent attributed solely to the use of RFID. When using RFID and factoring in control figures, understated inventory improved by 1.77 percent, and overstated inventory improved by 5.33 percent.
“The improvement to inventory accuracy at JCPenney can be attributed to both implementation of RFID technology and to weekly use of RFID replenishment reports to make in-store decisions,” Hardgrave said.
Research on RFID in the retail industry is moving from efficacy to implementation, Hardgrave said. In other words, retailers know the technology works, that it improves accuracy and efficiency. Now they want to understand best practices for introducing and implementing the technology. To address this need, a second generation of RFID pilot studies will examine how and when RFID may be integrated into business practices. For example, retailers depend on findings from the RFID center to make important decisions about which tags to use, which items to tag, where and when in the supply chain to apply tags, where and when to remove them, and how to use RFID tags in a way that is consistent with a company's corporate brand and image.
“These issues – selection of items, where and when to apply and remove tags, and, perhaps most importantly, the aesthetics of tagging – will be looked at in much greater detail in future studies,” Hardgrave said.
For this study, researchers used passive, ultra-high frequency, generation 2 tags. Generation 2 refers to the highest-performing technical protocol for passive RFID tags, as approved by EPCglobal Inc., the organization that sets international RFID standards.
The University of Arkansas RFID Research Center is a subunit of the Information Technology Research Institute within the Walton College. The center was formally approved by the Arkansas Department of Higher Education and began operating in early 2005. In September 2005, the center passed performance accreditation criteria established by EPCglobal Inc. The center is the only accredited academic EPC/RFID test center in the world.
University of Arkansas
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