RFID: Security, Supply Chain, Marketing & The Environment

Radio Frequency Identification continues to struggle to emerge from the proverbial swamp of technologies and take its’ rightful place as the next stage in the evolution of barcode product identification and EAS product security. Unfortunately this process seems to be taking much longer than expected and the most likely reason for this is that most organizations by their very departmental nature are examining its’ use in only one or two of the specific functional areas identified in the title of this article.

In order to justify and best leverage the investment in RFID technology, retail and consumer products organizations need to look at all four of these aspects in unison, involving all stakeholders in the process, from manufacturer through to the sales floor. Each of these will be touched on briefly with reference to related articles to provide an initial understanding of how they fit into the holistic RFID vision which is now emerging and will soon revolutionize the retail business model leaving laggards behind heading into a fatal tailspin.

Security:

RFID has much to bring to retail security from a number of perspectives beginning with its’ ability to serialize all products within the retail system. Today all barcodes and therefore all inventory of like products is the same. In an RFID world, every product will be unique and can be monitored enroute and within stores to protect each specific inventory asset until it is processed and paid for through POS.

Traditional EAS and even some of the hybrid systems rely on the scanning of products for a magnetic strip or other EAS material, and if these are somehow blocked or shielded or perhaps leave the store through unmonitored exits such systems fail to provide the means to tighten up and perhaps one day eliminate both internal and external shrinkage. By monitoring on a serialized basis all units tied to the reader system within a store, security personnel can take action based on specific events in relation to specific products utilizing both on-site as well as remote monitoring/recording, in concert with ongoing analysis of this information for immediate or later intervention as appropriate.

A simple example of this is if an unusually high number of a specific product are removed from the shelf instantaneously, cameras can be automatically triggered to the area, onsite security staff alerted and a videofeed directed to their PDA to assist in determining the nature of the event and what responsive action needs to be taken. Such an approach has benefits over typical EAS systems which work on the perimeter only with this proactive approach giving loss prevention persons a head start versus past methods.

As well, use of a serialized monitoring approach eliminates the effectiveness of blocking or shielding techniques as immediately upon disconnect from the system, an event can be generated if a related POS transaction is not recorded. Such a methodology lays a foundation upon which full store inventory reconciliation could be completed identifying reasons for all products leaving the store without being purchased classified under external theft, internal theft, damage, transfer, return to vendor etc. providing needed information on which management can take action and develop deliberate countermeasures to address these issues from a position of information and evidential strength.

Supply Chain:

Effective implementation of RFID in association with a number of other key supply chain technologies has now been proven to deliver significant benefits across the supply chain. Two pilots conducted by Supply Chain Network resulted in 50% and 85% productivity improvements in specific retail receiving applications working with multiple retail companies and verticals at both store and distribution centre levels.

Specifically, RFID has the ability to automate certain checking functions, monitor the movement of inventory within the supply chain and verify service levels and product delivery on time and complete. See Staples and its partners get full visibility with RFID for additional details.

Marketing:

RFID has many potential uses for the improved marketing of products extending from the tracking and verification of promotional products to ensure their delivery and deployment, to the triggering of digital signage media in-store to generate additional/go-with sales activity. Additionally, RFID can be utilized in conjunction with in-store marketing and Point of Purchase displays to measure their use and effectiveness based on store location, floor graphics, related signage both digital and traditional and more. Details on some of these opportunities are included in RFID: Sales + Marketing @ the Edge.

The Environment:

It’s not until after a company has calculated it’s carbon footprint that it’s realized by management that 75% of most companies carbon emissions come from their supply chain. RFID as described in the supply chain section above is a real means of directly measuring and improving the function of the entire supply chain both internal as well as external allowing for many synergistic opportunities between the supply chains of buyers and sellers to be recognized, measured and then jointly improved to deliver real and measurable environmental improvements.

The big mistake many companies make is building a static spreadsheet to calculate the carbon footprint as they end up with a numerical result, but unfortunately spreadsheets need to be painfully modified to change for consideration of multiple options and don’t have the optimization capability available in more advanced tools. Additionally, with growing consumer awareness and action on this issue, the ability for retailers and consumer products manufacturers to identify the carbon input to their products and post at the store shelf is already happening in some parts of the world. See Create a Carbon Neutral Supply Chain to learn more.

Concluding, if to date RFID is only firing on one of the above described cylinders in your organization, then it’s understandable why this project and related ROI calculations are failing to help you take this technology to the level of wider implementation. Based on the above, it’s clear that RFID within retail organizations needs a senior cross-functional leadership role and champion to drive and succeed.

In addition, there are a number of pre-requisites which must be in place for RFID to succeed with the first being an electronic catalogue and product data synchronization. SCN is available to assist firms in any of the above areas from basic mobilization presentations to management and extending into full facilitation of companies and their supply chain partners in designing and implementing programs which integrate all of these components to drive maximum benefit from RFID just ASK and we’ll be happy to help you start to build the foundation needed to succeed with RFID.

Jeff Ashcroft

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