Using RFID to Address Merchandise Data Quality

Last month, I traveled to Washington, D.C. to attend my first GS1 Connect show. Prior to the event I was looking forward to deepening my knowledge of standards and acquiring greater insight into trends by some of the industry’s leading experts. I was not disappointed.

By the time I had sat in on a few sessions, I heard recurring frustration from retailers who require different categories of data about merchandise from manufacturers; they noted that it can be a time-intensive, complicated and costly task to obtain it. Even worse, the data provided in advance — and the data actually on product labels/tags — is often conflicting or inaccurate.

In fact, according to speaker Jason Lavik, senior item operations manager at Target, item data quality issues cost Target millions of dollars each year. Only 20 percent of suppliers have passed Target’s Product Level Audit, while only six percent have passed its case level audit. Data inaccuracies include brand name, size, country of origin, color, pattern and product-specific attributes, which are all typical data requirements by retailers. These inaccuracies create delays in scheduling, product availability and additional labor costs to correct, thus reducing profits and potentially customer loss.

Interestingly, when RFID is implemented at the start of manufacturing throughout the supply chain, organizations can track and provide end resulting data based upon each individual retailer’s needs. This process can reduce inconsistencies and incorrect data, while providing a complete life-cycle of each item, enabling accurate data for some of the more complex information that some retailers require — even down to the crop of cotton, batch of silkworms or any animal products that are used in the manufacturing process.

This also reduces the amount of data that the manufacturer/DC has to track if some of the data requirements are placed upon the materials provider from the outset. RFID data can also provide each receiver with an advanced shipping notification, which can assist the manufacturer throughout production and scheduling, and offer the retailer a more accurate time-line as to when items will be readily available, thus reducing inaccuracies throughout the entire supply chain.

While data sharing can be as simple as sending a data file or providing information access within the “cloud,” I’ve heard some people express concerns about RFID because of the data embedding, capturing and additional task management involved. In fact, data can be simply automated in various stages throughout the supply chain, from EPC number management and source tagging products, to encoding and verifying with any of the numerous available technologies. Some of these include handhelds, RFID-enabled tables, automated readers like tunnels, and RFID portals installed at dock doors and other choke points. These will all capture data automatically, reducing labor and task requirements.

The application of RFID means that retailers can receive all of the information they require in an advanced and efficient manner, and manufacturers can simplify the process of data gathering and reduce inconsistencies along the way, while decreasing labor and error costs. This approach resolves not only the data issues, but also provides a solution for additional costly errors, such as incorrect shipments, charge backs, excess labor and all way through to the consumer who now doesn’t leave the shopping cart behind because he/she is frustrated that the desired item is out of stock. It’s a win-win for everyone involved.

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