Time to invest in RFID-enabled processes, Xterprise-IDC

25 Jan '10

3 min read

Xterprise Incorporated, a leader in item-level RFID solutions for retail, announced the availability of a new whitepaper by Leslie Hand, research director, with worldwide advisory services and market research firm, IDC Retail Insights, “The Lean Enterprise” which explores the integral role of RFID-enabled systems in creating a lean enterprise, specifically in the retail store. The Xterprise sponsored paper presents a model for lean operations in retail and examines benefits data and adoption challenges and highlights retail case studies.

According to the study, the best examples of lean retail execution stem from a reengineering of inventory fulfillment processes that leverage RFID. From uniquely identifying every article, to expediting inventory counts and inventory accuracy to the use of fulfillment logic to drive highly accurate sales floor replenishment tasks and demand-driven order processes, RFID enables the streamlined operations retailers require.

Lean in-store retail execution radically improves the ability of retailers to surpass customer expectations in store, and increase sales while reducing inventory control costs and reducing shrink. Based on this newly published data , retailers with the leanest execution capabilities will have the tools to meet the high expectations of today's consumer; those without will be at a disadvantage, forced to cut costs or service levels to meet customer expectations.

The High Definition View of Inventory

While in-store inventory management has not changed dramatically in many years, RFID-enabled item-level visibility makes a whole new paradigm possible, forever transforming the detail of retail. Item-level RFID effectively creates a high-definition view of inventory levels for the retailer and drives significant value creation. To date, much hand-holding was required to get an RFID systems–related initiative off the ground; however, the standards, technology and technologists have matured considerably, making now the time to invest in RFID-enabled processes. The business benefits reported include higher customer satisfaction, increased revenue, reduced labor, and reduced shrink. Retailers with good business cases and an achievable implementation plan may be viewed as fiscally irresponsible if they do not move forward, given the significant benefits at stake.

Study Highlights Include:

• Retailers using RFID report ROI of one year or less
• 90% or more found RFID to deliver an efficient inventory counting process
• Reliable and seasoned technology partners have more than just one “pilot” under their belts
• Developing business processes for RFID enabled processes is the biggest challenge, but results are achievable if the right partner is selected

RFID in the Retail Store Today

Retailers, including American Apparel, Jones Apparel Group, Levi's and Sotheby's, are realizing success today, driving dramatic improvements in in-store efficiency and service levels. Commonalities among these retailers include a clear business case, executive sponsorship, RFID system partners that provide experienced guidance, and an ability to direct source tagging or tagging of goods in-store. Reports from retailers in the apparel segment suggest that RFID implementations will accelerate over the course of the next three years.

“Retailers have an opportunity to revolutionize the last mile in the retail item life cycle by applying lean principles enabled by RFID core technology and item-level inventory execution software,” said Leslie Hand, research director, IDC Retail Insights. “The time is now for retailers to engage in and maximize the operating efficiency value that can be achieved with RFID-enabled lean execution.”

Xterprise Incorporated

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