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Multichannel fulfillment and RFID in retail industry

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Retailer compliance standards strive for near-perfect execution within the supply chain to efficiently and visibly speed merchandise from source to shelf. Anything less will result in lost revenue for both retailers and suppliers.

Manufacturing has long since used Six Sigma methodologies to eliminate defects, ensuring no more than 3.4 defects per million opportunities. Merchandise suppliers striving for the “Perfect Order” and looking to accomplish similar Six Sigma results, can more closely achieve this through Perfect Logistics.

According to a 2011 ASN (advanced shipping notice) study by Auburn University, Compliance Networks, and VCF, ASN inaccuracies range between 3% and 7%, depending on the level of retailer audit practices. As an example, a 1 million case order at $100 per case, with a 5.8% error rate, equates to a $5.8 million impact. This is an enormous hit to the bottom line for both retailers and their suppliers. As we look to achieve the Perfect Order through Perfect Logistics, we find that RFID, properly implemented, is a definitive return for everyone’s investment.

 

RFID has seen a recent surge with retailers such as Walmart, JCPenney, American Apparel, Dillard’s, and Macy’s leading the charge. Leading suppliers such as Levi Strauss, Li & Fung, Jockey, VF Jeanswear, and more have adopted the technology and are realizing an ROI through the ability to respond quickly and accurately, meeting the demand for specific items based on the thoughtful analysis of real-time inventory counts and shifts.

How do we move beyond a few invested retailers and suppliers to an industry ready to take logistics one step closer to perfection? Collaboration and buy-in through education.

This past November at the 2011 VCF Annual Fall Conference, Bill Hardgrave of Auburn University spoke to suppliers concerning “RFID: Making The Business Case For Suppliers.” He identified that retailers have gone through an exploratory stage with RFID over the years, including “playing, investigating, road mapping, and phased deployment,” and are now ready to embark on full deployment. Retailers can dictate that suppliers become RFID compliant, and suppliers will reluctantly implement RFID because they’re forced to, but may do so with a minimalist approach. Retailers would be in a better position if they nurtured their suppliers and showed them the mutual benefits they can experience, and suppliers would be best served to be an integral part of the process of establishing guidelines. Suppliers see that tags cost 10 to 12 cents per label; why not show your suppliers that the benefits outweigh the costs?

Download full white paper below.

Last modified on Tuesday, 11 June 2013 12:09

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