Abstract:

For the adoption of RFID to continue at or beyond its current pace, it is important to investigate the business value created by the technology. In previous studies, we have shown how RFID can improve in-stock position. Other studies have shown the benefit of RFID for promotional items. In this vein of continuing to prove the business case for RFID, we examine RFID’s impact on inventory accuracy. Inventory accuracy is one of the keys to an efficient and effective supply chain, yet is often referred to as the ”missing link” in retail execution. Forecasting, ordering, and replenishment use inventory records as input, and the quality of these functions are impacted by inventory accuracy. To study the impact of RFID on inventory accuracy, Wal-Mart commissioned a study to examine the store-level influence of RFID on perpetual inventory. For 23 weeks, a single category of product (air fresheners) was inventoried daily in eight test stores equipped with a new RFID-based perpetual inventory adjustment tool and eight matching control stores (without RFID). Preliminary results presented in this paper indicate that RFID does reduce inventory inaccuracy in the presence of normal business processes for on-hand adjustments (i.e., RFID as a supplement to existing manual adjustment processes).

Abstract:

Although radio frequency identification (RFID) is not a new technology, it has only recently received interest beyond a few niche areas and is now on its way to becoming a mainstream technology in many industries. With its potential and unique uses, healthcare is one of the major sectors that RFID is being considered and adopted. Improving the healthcare supply chain, patient safety, and monitoring of critical processes are some of the key drivers that motivate healthcare industry participants to invest in this technology. Already, RFID is being used in the broad areas of asset management, inventory management, authenticity management, identity management, and process management. However, more research has to be done on the technology development and more applied investigations have to be conducted on integrating the technology within the industry in order to fully utilize RFID. This study provides a framework of current RFID uses in the healthcare industry and opportunities for continued deployment.

Abstract:

In June 2003, Wal-Mart asked its top 100 suppliers to begin using radio frequency identification (RFID) tags on pallets and cases beginning January 2005. Since that announcement, the business value of RFID in the consumer packaged goods supply chain has been periodically questioned. Recently, a Wall Street Journal article asserted that RFID is not living up to its hype, and in reality is not providing the promised tangible business value throughout the supply chain. In light of such claims, this paper examines the business value of RFID in the supply chain and presents a model of RFID assimilation which proposes that the creation of business value is dependent upon the depth of assimilation (extent of use). The model is grounded in industry observations of the difficulty of early adopters to fully realize the benefits of RFID assimilation. The model conceptualizes RFID assimilation as occurring in three waves: the first wave of the model is Technology Deployment, the next wave of Data Understanding, and, lastly, the final wave is Business Value Creation. In this paper, the first two waves of the model are explored briefly with the emphasis placed on proven business cases and potential opportunities for RFID to provide business value in the supply chain.

Abstract:

Mostly fueled by mandates, adoption and implementation of the RFID technology in the retail industry is growing rapidly. At these early stages of adoption, one puzzling issue for retailers and suppliers is the compelling business case for RFID. In order to explore the potential business case for RFID, we conducted a case study using actual RFID data collected by a major retailer for the cases shipped by one of its major suppliers. We show the physical layout of the RFID readers on a partial supply-chain covering product movement from distribution centers to retail stores. In the analysis phase, first, we identify several performance metrics that can be computed from the RFID readings. Next, using this RFID data, we compute the values of those performance metrics. These values represent mean time between movements at different locations. Then, we discuss how these measures can assist in improving logistical performance at a micro supply chain level of operations between a distribution center and a retail store. We present how such information can be valuable to both the retail store operator and the supplier. We also discuss the initial lessons learned from actual RFID data collected in the field, in terms of data quality issues.

Abstract:

While much research has been conducted on adoption of complex technologies, relatively little has addressed the post-adoption deployment of that technology. This research proposes a hierarchy of RFID assimilation which proposes that the creation of supplier business value is dependent upon the depth of assimilation (extent of use). The proposed hierarchy is grounded in industry observations of the difficulty of early adopters to fully realize benefits of RFID assimilation. At the base level of the hierarchy is Technology Deployment, with the next level of Data Understanding, and, lastly, at the top of the hierarchy is Business Value Creation. Each level of the hierarchy is explored and organizational examples are provided to illustrate the three developmental levels.

Abstract:

In a previous paper (Hardgrave, Waller, and Miller, 2005), we reported the preliminary results of a major study that examined the influence of RFID on out of stocks (OOS). This initial paper provided some preliminary surface-level analysis of the findings. Overall, as previously reported, when looking across all Wal-Mart store formats for a large group of RFID tagged items (4554 items), the results were positive and encouraging. However, with the exception of accounting for the OOS improvement in the control stores, the previous paper did not control for various influences on out of stocks. In fact, the previous paper provided some point estimates of out of stocks that were intentionally conservative so as to not to overstate the benefit of RFID. In this paper, we further examine the influence of RFID on out of stocks. Specifically, we examine the RFID effect by sales velocity (i.e., number of units sold per day). As suspected, the influence on RFID varies by the units sold per day. These new findings control for other major variables such case pack size and shelf quantity to further isolate the RFID effect. Overall, we found that for products selling between 0.1 and 15 units per day, RFID reduced out of stocks by 30 percent. This point estimate provides a much more robust and realistic indication of RFID’s ability to reduce out of stocks.

Abstract:

Although radio frequency identification (RFID) has been around more than 50 years, ithas only recently received widespread attention, due in large part to its use by large retailers,such as Wal-Mart, and their subsequent requests for suppliers to use it. The resurgence inattention and the increased interest in RFID have spawned many articles and much speculationabout its use. Unfortunately, much of what has been written and speculated is misleading orsimply not true. It is not uncommon for new technologies (or in this case, rejuvenatedtechnologies) to receive a tremendous amount of hype. Hype can be good, as it draws attentionto an important technology. However, hype can also be damaging as people set theirexpectations based upon exaggerations of reality. These false expectations may lead one toexpect the technology to perform at a level to which it is not capable or they may lead people tofear the technology because of what it may do. History would suggest that over-hype leads todisillusionment and disappointment with the technology and can delay or derail its adoption(some examples of hyped technologies include artificial intelligence and electric-powered cars).In an effort to keep the hype in check for RFID, this article examines 10 common myths of RFIDand, accordingly, presents the realities of the technology.

Abstract:

The interest in, and subsequent use of, passive RFID in the retail supply chain has been growing rapidly in the past few years. Several major retailers have launched RFIDinitiatives with Wal-Mart leading the way both in the number of deployments (stores and distribution centers) and the number of suppliers involved. At this early stage of adoption, one nagging question for retailers and suppliers is: what is the business case for RFID? In examining this question, a potential area for improvement is in the in-stock position of products on the shelf. That is, any reduction in out of stocks provides benefit for the retailer, the supplier, and the consumer. In an effort to explore this potential business case, Wal-Mart commissioned a study to examine the influence of RFID on out of stocks. From February 14 to September 12, 2005, out of stocks were examined daily in 24 Wal-Mart stores (12 RFID-enabled stores, 12 control stores) representing all store formats. Preliminary results presented in this paper suggest that RFID is making a difference: within the test stores, out of stocks were reduced; test stores outperformed control stores; and tagged items outperformed non-tagged items within test stores.