Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

RFID Significantly Improves Item-Level Inventory Accuracy

27.08.2009
A new study on the use of radio-frequency identification tags on individual retail items shows that inventory accuracy decreases or diminishes over time with conventional systems that rely on barcodes and/or human counting to track inventory.

The research, conducted by the RFID Research Center at the University of Arkansas, also demonstrated that the use of an RFID-enabled system could improve inventory accuracy by more than 27 percent over a 13-week period.

“This project was part of a larger research effort to demonstrate and quantify the business value of RFID item-level tagging for day-to-day operations in a retail environment,” said Bill Hardgrave, director of the research center and professor of information systems in the Sam M. Walton College of Business. “The results can guide companies as they investigate whether, and to what extent, to implement RFID. The findings provide insight on how RFID can help retailers increase efficiency and thus significantly reduce expenses, which is always important but even more so in this tight economy.”

The investigation included two Bloomingdale’s stores – a test store with an automated, RFID-enabled system and a control store with Bloomingdale’s inventory-management system – in a major northeastern metropolitan area. The 13-week project focused on two departments – men’s denim jeans and women’s denim jeans. To establish baseline information, physical inventory counts were taken three times per week for the first five weeks by workers using both RFID and barcode readers. For the remaining eight weeks, physical counts by workers using both types of readers were conducted two times per week.

The baseline information was used to determine actual physical inventory counts – as opposed to what the Bloomingdale’s inventory-management system stated – at both the test and control stores. For the final eight-week period, researchers compared inventory numbers from the test store’s automated, RFID-enabled system to both the physical-inventory figures and Bloomingdale’s inventory-management system. Using this information, researchers gathered metrics on inventory accuracy, out of stocks and cycle-counting time.

Comparing the actual inventory count to Bloomingdale’s inventory management system over the 13-week period, the researchers found that inventory accuracy declined by 3.13 percent in the RFID-enabled test store and 4.24 percent in the control store. In other words, both systems lost inventory accuracy over the 13-week period. For both stores, inventory accuracy decreased due to an increase in understock, the term used to describe the situation in which a store’s inventory-management system shows more inventory than is actually in the store.

To understand the potential effect of an RFID-enabled system, the researchers simulated Bloomingdale’s inventory-management system to help them replicate changes that would have been made by using RFID to modify and update the retailer’s system as the master record. In other words, inventory data obtained by using RFID were used to update the simulated Bloomingdale system. The simulation demonstrated that overall inventory accuracy improved by more than 27 percent. Specifically, understock decreased by 21 percent, and overstock, the term used to describe the situation in which a store’s inventory-management system shows less inventory than is actually in the store, decreased by 6 percent.

Throughout the study, researchers also tracked how long it took to count items using RFID compared to a barcode reader. With RFID, inventory scanning of 10,000 items took two hours. Scanning with a barcode reader took 53 hours. This translated into an average of 4,767 counted items per hour with RFID and 209 items per hour using a barcode system, a 96-percent reduction in cycle-counting time.

The project was part of a broader effort to identify what retailers call “use cases” or “payback areas,” which are business processes upon which retailers expect item-level tagging to have the greatest impact. In this instance, the major use cases included inventory management and loss prevention. A previous study provided an objective evaluation of item-level tagging for apparel and footwear. The primary goal for all projects is to generate greater inventory efficiency for retailers and product availability for consumers. Taken further, the research could lead to consumers purchasing items without a cash register.

For this study, the 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.

The study is available for download at http://itri.uark.edu/research. Enter “rfid” as the keyword.

Hardgrave, holder of the Edwin and Karlee Bradberry Chair in Information Systems, is also executive director of the Information Technology Research Institute.

CONTACTS:

Bill Hardgrave, professor of information systems; executive director, Information Technology Research Institute; director, RFID Research Center
Sam M. Walton College of Business
479-575-6099 or 479-200-7389, bhardgrave@walton.uark.edu

Matt McGowan | Newswise Science News
Further information:
http://www.uark.edu

More articles from Business and Finance:

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

nachricht Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Electron highway inside crystal

Physicists of the University of Würzburg have made an astonishing discovery in a specific type of topological insulators. The effect is due to the structure of the materials used. The researchers have now published their work in the journal Science.

Topological insulators are currently the hot topic in physics according to the newspaper Neue Zürcher Zeitung. Only a few weeks ago, their importance was...

Im Focus: Significantly more productivity in USP lasers

In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.

Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...

Im Focus: Shape matters when light meets atom

Mapping the interaction of a single atom with a single photon may inform design of quantum devices

Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...

Im Focus: Novel silicon etching technique crafts 3-D gradient refractive index micro-optics

A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.

Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...

Im Focus: Quantum Particles Form Droplets

In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.

“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

ICTM Conference 2017: Production technology for turbomachine manufacturing of the future

16.11.2016 | Event News

Innovation Day Laser Technology – Laser Additive Manufacturing

01.11.2016 | Event News

#IC2S2: When Social Science meets Computer Science - GESIS will host the IC2S2 conference 2017

14.10.2016 | Event News

 
Latest News

Researchers identify potentially druggable mutant p53 proteins that promote cancer growth

09.12.2016 | Life Sciences

Scientists produce a new roadmap for guiding development & conservation in the Amazon

09.12.2016 | Ecology, The Environment and Conservation

Satellites, airport visibility readings shed light on troops' exposure to air pollution

09.12.2016 | Health and Medicine

VideoLinks
B2B-VideoLinks
More VideoLinks >>>