Now that apparel companies have paved the way, the electronics industry could be next to adopt RFID at the item level.
Managing complex inventories: The single biggest benefit apparel companies can achieve from using RFID at the item level is being able to manage complex inventories. It’s difficult to make sure the right number of stone-washed denim jeans—which come in several styles and 20 different sizes—are shipped to the warehouse, picked, shipped to the store and put on the shelf when they need to be replenished. Similarly, managing inventories of 20 types of Dell laptops—with different processors, hard drives, video cards and RAM—is a challenge. Looking at boxes in the back room doesn’t immediately tell you which specific configurations are missing.
Out-of-stocks: Unlike apparel retailers, electronics retailers do not usually stock a lot of goods on shelves—rather, most display samples and keep stock in the back room to reduce theft. But they do have some out-of-stock issues. Just as apparel-store employees can’t look at a wall unit filled with jeans and know which particular styles and sizes are missing, electronic store associates can not view a rack of music CDs or movie DVDs, or a shelf of toner cartridges, and know which items are missing. When customers enter a store seeking a specific item and fail to find it, the result is often a lost sale.
Seasonality: Related to out-of-stocks and managing complex inventory is the issue of seasonality. Consumer electronics, like clothing, have a limited shelf life. Order too many of the new iPod introduced for the holiday season, for example, and you’ll wind up with excess inventory that then has to be sold at a steep discount, or written off entirely. Order too few of the hottest electronics products, on the other hand, and you’ll miss out on sales. RFID can help manage inventory more efficiently, so that companies can better match supply to demand. For example, knowing exactly what you have on the shelves, in the back of the store and in the warehouse means you can reduce safety stocks, thereby decreasing the likelihood of being caught with overstocks.
(Read the rest on RFIDJournal.com)