In 1973, the retail world was turned on its head. Inventory tracking that used to be little better than a shot in the dark was now easy to follow and organize. What was this beautiful invention that flooded the retail market? The barcode, with its Universal Product Code (UPC). The ability to scan each item into a list or inventory instead of writing by hand the description of each was revolutionary.
That’s why it’s such a big deal that radio frequency identification (RFID) technology is being called the new wave of inventory management. Barcodes allowed retailers to drastically reduce the amount of time taken to take inventory, as well as improved the accuracy of that inventory count. RFID technology takes this to the next level.
How does it work?
The RFID package comes in two parts: tags and readers. The tags are thin metal antennae printed onto adhesive-backed paper, sewn into clothes, or added to tokens that can placed in crates. They are placed onto the item to be tracked, whether that is an individual item or a pallet. The readers are devices that send out low frequency radio waves, which energize and bounce off the tags, allowing the tags to be read. The two main kinds of readers, or “interrogators” as they are known, are stationary read points and handheld scanners.
Stationary points are readers that you set up at predetermined points in the store, such as POS areas, receiving docks, and entrances/exits. They read all RFID tags going through that point, letting the retailer know what items are in which parts of the store. With all items tagged and enough readers, it is possible to get a visual overview of where every inventory item is located at any point in time. However, this extends beyond just items in the store. Exact quantities in store-to-store transfers can now be tracked, and if the suppliers comply with properly tagging, the progress within the distribution process can be tracked as well.
Handheld scanners are the more mobile alternative. For many smaller stores it is not economically viable or necessary to install an array of stationary read points. In this case, the handheld scanner is able to bridge the gap and provide the benefits of RFID in a smaller scale environment. The tagging is done the same way, just like barcodes on non RFID enabled stores. But instead of stationary read points, an employee is able to use the scanner to update inventory. Rather than stop and find the barcode on each item on a shelf, the employee is able to bring the handheld scanner to within several feet of the shelf and the reader will pick up each tag, without line of sight to said tag. This can reduce mean cycle count by up to 96%, as was the case with Dillards.
Regardless of which type of scanner is used, RFID has proven to be an invaluable tool for retailers everywhere. From speeding up checkout times to vast improvements in inventory accuracy, RFID is helping retail stores get to the next level.