This article originally appeared at AIM Global's February 04, 2009 issue of the RFID Connections newsletter and was written by Bert Moore, editor. AIM Global (www.aimglobal.org) is the Association for Automatic Identification and Mobility.
According to the Global Retail Theft Barometer, retailers experienced total shrinkage of $105B in 2008. Of that, more than half, $62B, was reportedly the result of employee theft, vendor discrepancies, and various internal errors. With today's economy, these numbers are likely to grow. Curbing supply chain and in-store shrink should be a major initiative for retailers–and identifying its source is the first step.
RFID certainly offers the promise to help curb shrink. Vendor labeling is the key to a successful program to improve visibility throughout the supply chain but it may be the toughest to achieve. Many vendors claim their existing bar code systems are already adequate but underlying objections might be that vendors do not see any direct benefits and may not want to expose inefficiencies and errors in their operations.
But there are ways to overcome these objections or, at least, expose them for what they are.
It's interesting to note that Walmart recently dropped its penalty for noncompliance to 12 cents for each unlabeled-with-RFID pallet. What that means is that Walmart's systems have evolved to the point where printing and applying an RFID pallet label is a relatively trivial task. While Walmart can't use the RFID label for receiving, it can use it for its own internal operations to track pallets to specific stores and out onto the sales floor.
