Using RFID, Companies Can Triple Their Order Accuracy and Reduce Costly Chargebacks
AUBURN, AL and LAWRENCEVILLE, NJ – October 10, 2018 - New research from the Auburn University RFID Lab and GS1 US® found that brand owners and retailers using Electronic Product Code (EPC®)-enabled radio frequency identification (RFID) to optimize inventory management and reconcile product shipments are capable of achieving 99.9 percent order accuracy. Using item-level RFID technology, retailers can decrease out-of-stocks, improve loss detection, boost sales margins and expedite returns—just to name a few of the technology’s benefits.
Measuring a sample of more than 1 million items from five leading retailers and eight brand owners, the study also found that when RFID was not implemented, 69 percent of orders shipped and received from brands to their retailer partners contained data errors. These errors were revealed in picking, shipping, and receiving, resulting in inventory inaccuracies and costly chargebacks from the retailers to the brand owners. Additionally, the research exposed that brands and retailers generally accept these process errors and attempt “work-arounds,” which often result in additional errors and costs.
“This study should cause retail industry stakeholders to consider the immediate positive impact item-level RFID can have on supply chain efficiency. Retailers and brands have a tremendous opportunity to eliminate errors, as the lack of inventory accuracy is a preventable problem that can be solved with greater automation through RFID,” said Dr. Bill Hardgrave, provost and senior vice president for academic affairs, Auburn University.
“Retail today is ultra-competitive—the right product needs to be in the right place at the right time for the consumer. Deploying item-level RFID improves the efficiency, precision and reliability of the entire retail supply chain, helping brands and retailers exceed consumer expectations and build loyalty,” said Michelle Covey, vice president of retail apparel and general merchandise, GS1 US.
The EPC/RFID Retail Supply Chain Data Exchange Study, also dubbed “Project Zipper,” surveyed the effectiveness and business value of item-level RFID tagged items as they travel throughout the supply chain, from a brand owner to a retailer. It examined the flow of information between the brands and retailers over a one-year period from June 2017 to June 2018. During this time, the RFID Lab team examined the data obtained from barcode scans at the brand owners’ distribution centers, and barcode data at the retailers’ distribution centers, and compared them with data captured via RFID tags.
The study will continue with a Phase 2 analysis that will investigate the causes of errors, the consequences of work-arounds and additional use cases for traceability and authenticity. Researchers anticipate Phase 2 will be completed in mid-2019.
For more information about the Auburn University RFID Lab research, please visit https://rfid.auburn.edu/. To read the full study and to learn more about GS1 US and industry implementations of RFID, please visit www.gs1us.org/project-zipper.
About Auburn University RFID Lab
The Auburn University RFID Lab focuses on the business value of RFID and other sensor identification technologies. Founded in 2005, the lab works to bridge the gap between industry and academia. The Lab is uniquely partnered with most of the leaders driving RFID adoption across retail and aviation with projects from Delta Airlines, Walmart, JC Penney, Bloomingdale’s, Boeing, and many others. Additionally, the lab maintains educational touring facilities and hosts over 1,000 visitors per year to learn about the technology and test for feasibility in various environments. Finally, the lab houses the ARC program, which is the most widely used program for validating RFID tag performance and quality globally. For more information, visit https://rfid.auburn.edu/.
About GS1 US
GS1 US®, a member of GS1® global, is a not-for-profit information standards organization that facilitates industry collaboration to help improve supply chain visibility and efficiency through the use of GS1 Standards, the most widely-used supply chain standards system in the world. Nearly 300,000 businesses in 25 industries rely on GS1 US for trading partner collaboration that optimizes their supply chains, drives cost performance and revenue growth while also enabling regulatory compliance. They achieve these benefits through solutions based on GS1 global unique numbering and identification systems, barcodes, Electronic Product Code-based RFID, data synchronization, and electronic information exchange. GS1 US also manages the United Nations Standard Products and Services Code® (UNSPSC®). For more information, visit www.gs1us.org.