The RETAiL Alert Group
Advice ArticleThe Dummies Guide to Item Level EPC (Electronic Product Code) RFID
The Benefits; The Truth; The Myths; The Reality; Some Useful Links
We are getting a growing number of enquiries asking is RFID for us….us being retailers, suppliers and importers?
The key retailer, supplier, importer question. 'is there a dollar in RFID for
us today?'
In 2008 it remind some of us of the questions and confusion surrounding the introduction of bar-codes and EDI in 1988.
The good news is that understanding RFID (Radio Frequency Identification) is
a brilliantly simple technology stock identification concept, but as usual ‘the
industry’ surrounds the basic simple concepts and benefits with unnecessarily
confusing technical terms and 'tags'
Mainly to extract large consulting fees from unsuspecting retailers and
suppliers.
Hopefully we can make RFID real simple for you.
Where we start, think of RFID in simple terms as bar-codes on steroids which
can be read from a distance without direct staff input or assistance.....WOW.
Exactly the way you are 'beeped' when you travel through toll ways.
The way you think about a bar-code does not change; the bar-code is still the
prime stock item identifier.
We will change the bar-code definition however, to an EPC (Electronic Product
Code).
The main differences between a bar-code identified product and an EPC RFID identified product are;
| Bar-codes identify a product with a single bar-code number irrespective of quantity normally in a total retail location like a store. | EPC RFID products
can be identified by bar-code and serial number.
EPC RFID (Electronic Product Code) can be reported in different locations within a store by tracking product by bar-code and serial number with close to 100% accuracy. This a 'WOW' 2008 retail technology change. EPC RFID provides new age supply chain tools to deliver fresh opportunities in the way that Australian and New Zealand retailers, suppliers and importers can leverage more profitable sales, reduce retail labour costs and shrinkage out of supply chain and shop floor processes. How, by knowing with real time clarity where stock is located, when stock is stolen or misplaced with close to 100% stock reporting accuracy. Bar-codes have been great, but bar-codes only give an industry average of 85% stock
accuracy and a 'blurred' vision of where stock is located. |
| Bar-codes are read with a bar-code reader or scanner close to the product. | EPC RFID
products, cartons, totes, pallets can be read from a distance, the
distance dependant on product type, environment and location. EPC RFID products in some instances can be read through cartons or outer wrappers without staff directly involved. |
| Bar-codes are normally unique to a total quantity in store. | EPC RFID products can identified by location in store; misplaced store location or in back-room reserve. |
| Bar-coded product has to have cycle counts or stock-takes to identify theft. | EPC RFID products
can be real time reported compared with cash register total. This allows for reporting on stock theft immediately if required, or a quick portable stock scan if more convenient. EPC RFID stock can be identified by shelf and facing location if required and also audit display planograms for stock fill or misplaced items reporting. |
| Bar-coded product is comparatively slow to cycle count or stock-take. | EPC RFID products are much quicker to cycle count or stock take. |
| Bar-coded stock, even with ASN’s is comparatively slow to check and slow to get to shelf or rack. | EPC RFID stock
can, in most instances be read through the carton and put straight to
shelf or rack. Some retailers have reported over 50% improvement in time of stock receipt to shelf. |
| Bar-codes are cheaper than RFID Tags | EPC RFID Tags used effectively can deliver double digit sales growth over ‘closed loop’ EDI Systems; over 50% reduction in time to shelf / rack; substantial reduction in stock counts and reductions in stock shrinkage. |
| Suppliers are used to bar-coding and EDI | Before 1986 there
was no bar-coding or EDI, bar-code and EDI costs had to be ‘sold’ to
suppliers and importers. In 2008 retailers need to ‘sell’ the benefits of EPC RFID source marking to suppliers and importers. In 2008 there are compelling EPC RFID source marking sales increase benefits for suppliers and importers delivering more supplier and importer profits and cost savings? |
| Do we have to EPC RFID Tag at Item Level to get RFID benefits | The end game is to get as much product as possible EPC RFID identified but some retailers gain benefit by EPC RFID tagging cartons or inners only as well as pallets and totes. |
| Do I have to change my current POS and Backend solution to integrate EPC RFID source marked product. | There are EPC RFID solution sets which allow retailers to embed an end to end EPC RFID tracking and reporting solution with limited interference with POS functionality and Backend solutions. |
| Are there different types of EPC RFID Tags to choose from. | Yes; Short distance. Wide Gate Type Distance. Battery Assisted Long Distance. Your choice......... |
| Is there a consumer privacy issue with EPC RFID Tags | The same privacy
paranoia is around regarding RFID stock identification as existed when
bar-codes were introduced in 1986. Yes, the use of EPC RFID has some outer privacy issues but governments and Industry Associations such as the ARA have published an industry code of practice for retailers to adhere to. The RFID code of practice has been agreed to by all major interested parties including consumer groups. |
| Will EPC RFID Tags cost more than bar-codes | Obviously yes, but the bottom line outcomes for retailers, correctly, carefully implemented are as fantastic as were the bottom line benefits derived from the introduction of bar-codes and EDI into the Australian and New Zealand retail market in the late 80's. |
| Can I get help to evaluate EPC RFID opportunities for my organisation? | Yes, take advantage of our one hour EPC RFID discussion, or our two day detailed business assessment evaluation of EPC RFID benefits which specifically pertain to your business. |
Following is a table listing some of the commercial reasons why you as a retailer or supplier should consider EPC RFID as the prime method of marking items, cartons, totes and pallets from 2008 onward;
|
Item Level Benefit Item |
'Classic' Bar-Code EDI |
Item Level EPC RFID Benefits Above 'Classic' Bar-Code and Conventional EDI |
|
Sales Increase Benefit |
Minimum 20% increase in Sales | Additional double digit sales increase above normal bar-code / EDI expectations |
|
Stock to Floor Benefits |
With Scan Pack at source stock able to be put to floor with minimal checking; with no Scan Pack at source all stock checked manually. | Stock visibility by location in store; stock to shelf / rack quicker; substantial reduction in stock handling and receipt procedures. |
|
Stock Reduction Benefit |
At least one stock turn | Stock turn improvement above EDI quantified by each retailer category. |
|
Stock Accuracy Benefit |
Industry average 85%..? reasonably good for merchandising purposes but 'blurred' view of inventory in-store showing total inventory but not by location in-store.. | 98%+ Crystal Clear view of inventory by location in-store, in backroom/reserve or 'just received'. |
|
Stock Take Benefit |
If cycle counts employed stock accuracy improved substantially. | Perpetual inventory if required by location, that is shop floor / backroom/reserve separately monitored. Mobile counts if required any time. Stock accuracy theoretical against actual possible any time for shrinkage and stock replacement purposes. |
|
Stock Visibility Benefit |
Only in total held in store; no location visibility | By shop floor; location on shop floor and backroom/reserve. |
|
Administration Cost Savings |
Including claims reduction from Scan Pack at least 15% | Tracking of claims improved, margins vary implementation by implementation. |
|
Shop Floor Cost Savings |
Dependant on Scan Pack and Cycle Counts | Up to 75% store team saving in stock handling procedures |
|
Shrinkage Benefits |
Visibility of stock losses and inaccuracies reduced if cycle counts employed. | If required real time tracking of losses by shop floor location / backroom/reserve. Already proven shrinkage reduction during live trials. Sometimes possible to sync with existing shop front security systems. |
|
Space Use Benefit |
Less selling and reserve space required. | Even better planning of shop floor and backroom/reserve space. With planograms accurate usage of facings and replenishment of same to maximise gross profit generation by location. |
We hope our Dummies Guide to EPC RFID has been helpful and useful.
A regular update of EPC RFID FAQ (Frequently Asked Questions) will be provided.
For further information on EPC RFID we recommend that you go to the following
links, industry journal, RFID Vendor sites;
● EPCglobal
http://www.gs1au.org/products/epcglobal and download the EPCglobal Fact
Sheet and the EPC (EPCIS) FAQ Sheet.
● RFID Journal
http://www.rfidjournal.com .
● VUE Technology Item Level RFID Solution Provider
http://www.vuetechnology.com .
● SYSCAN (Sunshine Technologies) Australian RFID Solution
Provider
http://www.sunshinetechnologies.com.au
Trust our attempt at our Dummies Guide to EPC RFID is beneficial, assisting
you on the journey to EPC RFID enable your business.
In this article we have only touched on simple concepts; for more detailed help
contact;
Tony Standley