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
Matt McGowan | Newswise Science News
Further reports about: > Business Vision > EPCglobal > Inventory > Item-Level > RFID > RFID tag > RFID-enabled > RFID-enabled system > Radio-frequency identification > Technology > business process > cycle-counting time > information systems > inventory-management system > physical-inventory figures > stocks
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
Among the general public, solar thermal energy is currently associated with dark blue, rectangular collectors on building roofs. Technologies are needed for aesthetically high quality architecture which offer the architect more room for manoeuvre when it comes to low- and plus-energy buildings. With the “ArKol” project, researchers at Fraunhofer ISE together with partners are currently developing two façade collectors for solar thermal energy generation, which permit a high degree of design flexibility: a strip collector for opaque façade sections and a solar thermal blind for transparent sections. The current state of the two developments will be presented at the BAU 2017 trade fair.
As part of the “ArKol – development of architecturally highly integrated façade collectors with heat pipes” project, Fraunhofer ISE together with its partners...
At TU Wien, an alternative for resource intensive formwork for the construction of concrete domes was developed. It is now used in a test dome for the Austrian Federal Railways Infrastructure (ÖBB Infrastruktur).
Concrete shells are efficient structures, but not very resource efficient. The formwork for the construction of concrete domes alone requires a high amount of...
Many pathogens use certain sugar compounds from their host to help conceal themselves against the immune system. Scientists at the University of Bonn have now, in cooperation with researchers at the University of York in the United Kingdom, analyzed the dynamics of a bacterial molecule that is involved in this process. They demonstrate that the protein grabs onto the sugar molecule with a Pac Man-like chewing motion and holds it until it can be used. Their results could help design therapeutics that could make the protein poorer at grabbing and holding and hence compromise the pathogen in the host. The study has now been published in “Biophysical Journal”.
The cells of the mouth, nose and intestinal mucosa produce large quantities of a chemical called sialic acid. Many bacteria possess a special transport system...
UMD, NOAA collaboration demonstrates suitability of in-orbit datasets for weather satellite calibration
"Traffic and weather, together on the hour!" blasts your local radio station, while your smartphone knows the weather halfway across the world. A network of...
Fiber-reinforced plastics (FRP) are frequently used in the aeronautic and automobile industry. However, the repair of workpieces made of these composite materials is often less profitable than exchanging the part. In order to increase the lifetime of FRP parts and to make them more eco-efficient, the Laser Zentrum Hannover e.V. (LZH) and the Apodius GmbH want to combine a new measuring device for fiber layer orientation with an innovative laser-based repair process.
Defects in FRP pieces may be production or operation-related. Whether or not repair is cost-effective depends on the geometry of the defective area, the tools...
10.01.2017 | Event News
09.01.2017 | Event News
05.01.2017 | Event News
16.01.2017 | Power and Electrical Engineering
16.01.2017 | Information Technology
16.01.2017 | Power and Electrical Engineering