RFID: A boon for retailers!

Used not only in retail, but for defense, manufacturing, logistics and health-care, Radio Frequency Identification (RFID) although, is best suited for supply-chain management. A look, at how this technology is making supply, management and operations simp
RFID for merchandise

The Global Retail Theft Barometer 2009 has ranked India No. 1 in retail shrinkage among nine countries surveyed in Asia Pacific. According to the report nearly 10 per cent of shrinkage occurs at the supply-vendor level, most of which can be combated with effective tracking and inventory management tools. Radio Frequency Identification (RFID) is one such technology, amongst a host of others that is proving to be a boon for retailers. 

What is RIFD all about?
Employed for the purpose of identification and tracking, an RFID tag is attached to merchandise for efficient inventory tracking and management. As the name suggests, it is a traceable tag/chip with a built-in circuit for coding and de-coding radio frequencies. It is placed on a product and can be tracked using the radio frequencies emitted by the tag which are deciphered by a tracker/reader. The RFID tag has an Electronic Product Code (EPC) inside it which helps tracking goods using RFID technology. An EPC is somewhat like the next level of barcodes. 

As the usage of an RFID tag does not involve any physical contact with the reader to transmit data, it proves advantageous in many ways. Firstly there is minimum wear and tear as no actual writing or reading of data is needed, the RFID tag works on frequencies which can be read electronically. Secondly, it does not slow down operations by physically bringing the reader ‘in contact’ with the tag. It works from a distance as well. Thirdly, newer RFID technology offers the advantage of automatic reading of several tags in a short period of time, making the operational process quicker and easier. Lastly, although there have been privacy infringement implications of using RFID technology, but in spite of these issues it is continuing to be the preferred form of technology for asset tracking and inventory management. Retailers have now woken up to the benefits of RFID technology. And despite it being high-priced, they often partner with IT solutions companies who provide capable back-end support for using RFID. As mentioned above the cost required to utilise RFID is high and a fair cost-sharing mechanism between retailer and the suppliers is essential for a sustainable RFID adoption to take place.  

Lot of organisations are now using RFID for their merchandise; with products ranging from apparel, jewellery, shoes, electronic good, kitchen ware and fashion merchandise amongst many more. Indian jewellery retailer Bhima & Brothers Jewellers is tracking its high-value inventory and providing customers with immediate information regarding its jewellery, with a high-frequency RFID system deployed in February 2009. Inventory now takes just one hour and time to complete a sales transaction has dropped from eight minutes to less than one. Recently, Motorola has announced the launch of its newest bar-code scanning handheld computers, the MC3100 series, embedded with an RFID tag in the handle of every portable handheld computer model it releases. The tags will enable the company's customers to use an RFID reader to determine each device's location in a store's backroom, or at a Distribution Center (DC). In this way, if a computer is misplaced, a handheld reader could be carried through a warehouse to locate the device—or , if someone takes a computer through an RFID portal installed at exit or dock doors, a user could be notified that it is leaving the premises. And just last year Kishore Biyani-promoted Future Group, entered into a tie-up with Cisco Systems, one of the world’s largest networking companies, to implement RFID technology across all its retail formats in India. 

Although considered in its nascent stages in the Indian retail sector, RFID is making inroads into retail solutions programs with the help of IT companies. A large number of major brands are collaborating to make the process seamless, not only at the time of manufacture and sales but even for later use for managing customer returns, incentives and other actions beyond the checkout.  


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