by Sheldon R. Reich, CYBRA Corporation
As stated in Not Just for Retailers, sooner or later you'll be supplying RFID-tagged merchandise to your retail customers who are seeing strong benefits with RFID from the DC to the back room and selling floor. Here are more ways that every RBO (Retail Brand Owner) can also benefit from RFID and can turn the cost of an EPC (Electronic Product Code) retail compliance mandate into a supply chain enhancing investment.
At the recent RVCF Fall Conference in Scottsdale, a number of leading retailers and brand owners we met with discussed their plans for implementing RFID. The retailers are adding product categories and rapidly expanding their RFID compliance mandates. In short, it's full speed ahead.
Some brand owners are shipping goods with EPC-compliant RFID tags, but not taking advantage of any of the benefits the technology offers. An even larger number of brand owners came to our booth in the exhibit hall with RFID questions and concerns such as "How do we begin?" and "How do we justify the cost of investing in RFID infrastructure?"
ROI Begins with Reducing Chargebacks
To help customers quantify the ROI (Return on Investment) of RFID, we asked the brand representatives if they would share the size of the chargebacks they are assessed. We were amazed at the costs these brands are shouldering. The chargebacks ranged from tens of thousands of dollars to millions of dollars for the largest brand owners. There are lots of reasons shipments are charged back – merchandising issues, compliance marking errors, etc. – but packing and shipment errors are easily addressed with RFID technology and anything the brand can do to lower the chargebacks directly impacts the bottom line. Just by reducing chargebacks alone, an RFID system will quickly pay for itself.
Start with a Pilot then Scale
If only a portion of your stock needs to be tagged, you can begin by tagging merchandise in your DC. Typically this is done at a VAS (Value Added Station). What is the equipment required? An RFID printer can print and encode EPC labels to affix to those products shipping to the mandating customer. Add a mobile computer with RFID and you can start to take advantage of such labor savers as RFID cycle counting and RFID pack and ship validation. This will give you a taste of the benefits of RFID. As you tag more and more merchandise an investment in fixed RFID infrastructure such as dock door portals and RFID-enabled MHE (Material Handling Equipment) will give you even more bang for the buck. As you roll out more RFID enabled processes, the investment made to comply with your customer mandates will immediately begin to reduce chargebacks, and lower labor costs as you process more shipments with more accuracy in less time.
The Big Four
As noted in our September article, there are four areas that RFID will give you the greatest impact. Here's how we've helped brand owners use RFID to reduce their supply chain costs:
Receiving – For one customer whose goods are tagged at source, fixed RFID readers on inbound conveyors read the tags of every single item in the carton. The system compares the ASN (Advanced Ship Notice) from the factory and confirms that each carton contains exactly what was ordered. This validation is an audit of every single carton arriving from overseas and it happens in real time without any misreads and without slowing down the receiving line.
Cycle Counting – There's no need to shut the DC for a few days to conduct physical inventory. A small team armed with mobile RFID readers can count inventory in a fraction of the time compared to traditional barcode based methods. Because it is easier and faster to count, you can cycle count more often with greater accuracy.
Packing – By adding fixed RFID readers at each pack station, orders are validated in real time, the packing process is faster with the reduction in product handling and hand barcode scanning, and errors are reduced to zero as operators can be signaled instantly if the wrong item is placed in the carton.
Shipping – By investing in RFID portals at outbound dock doors, you can validate each carton loaded into an outbound trailer and confirm it is going on the right truck. RFID validation can automatically "close" a shipment and act as a trigger for generating an EPOD (Electronic Proof of Delivery) record.
By investing in robust RFID software and infrastructure additional benefits can be reaped. For example, we are helping brand owners track preproduction samples and molds, job tickets and employee applications, reusable pallets and trolleys, and IT assets. Once installed, you'll find dozens of processes that can be quickly and easily enhanced using RFID.
By putting RFID to work inside your four walls, you will reduce the costs of receiving, counting, packing, and shipping goods, and you will be able to pay for the RFID investment with a major reduction in chargebacks.
Sheldon R. Reich is Chief Solution Architect for CYBRA Corporation, the developer of EdgeMagic RFID Platform Software, and MarkMagic Barcode Label, E-Forms and Report Writing software. Sheldon has significant technical knowledge of Auto ID system design, integration, and troubleshooting on a wide range of platforms and has helped hundreds of companies implement Auto-ID systems since 1989. CYBRA and Jamison RFID, the leading manufacturer of RFID portals, are the RFID Sponsors and will be demonstrating their field-proven retail supply chain hardware and software at the RVCF Annual Fall Conference November 8-11 at the JW Marriott Scottsdale Camelback Inn Resort & Spa. Sheldon can be reached at email@example.com or 914-963-6600 ext. 209. Learn more about CYBRA and Jamison RFID at: www.cybra.com and www.jamisonrfid.com
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