The Supply Chain Benefits of RFID for Retailers

RFID has numerous benefits for a retailer’s supply chain. RFID helps retailers find optimal inventory levels for their products. Too much product can waste warehousing and storage costs. Proper inventory levels save retailers 20 to 30% in storage and warehousing costs. Retailers are already experiencing these benefits. The RFID technology can scan unique SKU numbers to determine product differences. Via RFIDJournal, RFID can save a retailer 20 to 30% in warehousing costs.


Improves Inventory Accuracy

Having accurate inventory data is a key to supply chain management. Inaccurate inventory data leads to unhappy customers and stock that may be obsolete or unsaleable. Improving inventory accuracy can help companies reduce costs by increasing dock-to-stock cycle times and increase sales order delivery time. The benefits of improved inventory accuracy are far reaching and not limited to higher customer satisfaction. Here are five reasons why you should invest in inventory accuracy:

Standardized inventory enables easier identification of products. A company’s inventory accuracy is also affected by tidiness. Having several sizes of an item on one rack can cause one to disappear from the system. Having real-time visibility of inventory includes barcode scanning, transaction history, and web-based reporting. An inventory management system that can automatically recognize product expiration dates improves inventory accuracy and controls obsolescence.


Reduces Labor Costs

In manufacturing companies, labor costs are one of the largest costs. They make up a large part of the company’s balance sheet. Therefore, it’s vital to find ways to reduce them. These methods include increasing efficiency, reducing the number of steps a product must take, and cutting expenses. In addition to reducing labor costs, these methods also increase a company’s bottom line. Here are a few ideas:

Improved communication is a must. Employees can be redirected from their tasks by using the latest technology, including artificial intelligence. By creating better communication channels, employees can get their work done faster and more accurately. Having more communication channels will make it easier for employees to work efficiently and earn a higher salary. In addition, better pay will make turnover rates less of a problem during busy seasons. Automating tasks increases accuracy, which cuts labor costs. Automation is a natural progression toward robotics and artificial intelligence.


Improves Facility Productivity

Using RFID in the supply chain is a key part of ensuring the smooth flow of goods from one location to the next. It helps reduce shrinkage and waste, while also tracking employee activity and moving items from receiving to production faster. In addition, RFID can help track critical equipment, mobile devices, and access to a building. By using the technology, you can ensure customer satisfaction while reducing risk of theft and piracy.

The technology used by RFID is capable of reading both HF and LF tags. This allows warehouses to increase their throughput and improve the efficiency of processes. This allows warehouse teams to find pallets quickly and efficiently. It also enables managers to track where goods are in the warehouse. This helps companies integrate vendors into their supply chain and regain control of their warehouses. As global regulations continue to grow more complicated, outmoded manual procedures can lead to costly mistakes and lost revenue.


Increases Revenue

While the RFID technology has many applications in the retail industry, its most valuable use cases are in inventory tracking and store operations. While it is most widely known for its use in inventory tracking, the technology can also provide insights into customer behavior. For example, one study found that 99.9 percent of the orders shipped by brand owners were delivered to the customer with zero errors. This could save retailers millions of dollars each year by eliminating errors, as well as drastically reducing safety stock.

Retailers may be able to use RFID to increase their revenue by allowing them to sell down to the last item on their shelves. For example, a retailer may have ten different widths, lengths, and colors of jeans, but no one has ever bought all of them. If a customer buys the last pair of jeans, the store owner might want to track this information so they can re-market the remaining pieces. RFID allows for this and can alert employees when inventory levels are too low.


Reduces Misdistribution

In a supply chain, a lack of visibility of store-level inventory costs a retailer three to four percent of its revenue. Fortunately, inventory is available somewhere along the value chain. If more retailers could coordinate store-level product availability, their overall logistics costs would fall. But how can a retailer reduce misdistribution in its supply chain? One solution is to use reverse logistics to return faulty or unwanted products to the producer.


Can Eliminate Traditional Checkout

In the retail industry, RFID is making shopping much faster than ever. Instead of scanning barcodes to identify items, RFID readers will scan an item’s unique ID number, eliminating the need for a physical checkout line. In addition, RFID self-checkout requires customers to provide biometrics (such as their fingerprints or facial recognition), which speeds up the traditional checkout process. And with its high accuracy, RFID readers can scan items inside a customer’s bag, allowing them to pay without ever having to approach a physical checkout.

The RFID-enabled system is more efficient than ever, as it can read items on a conveyor belt and tag them to a customer loyalty program. Unlike traditional checkout, RFID technology can reduce inventory-related labor hours and improve inventory accuracy. The solution also reduces shrinkage and theft. RFID-enabled self-checkout solutions can be integrated with existing checkout processes, enabling a frictionless shopping experience for both customers and employees.

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[2023 RFID Integration Guide]

Have you been handed an RFID tag mandate from one of your retail partners? This ebook is a complete guide that will help manufacturers, and distributors reap great benefits from deploying RFID into your operations.


CYBRA specializes in RFID technology, real time tracking systems, and enterprise barcode label software solutions.

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