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Does RFID improve inventory accuracy? A preliminary analysis
Abstract
For the adoption of radio frequency identification (RFID) to continue at or beyond its current pace, it is important to investigate the business value created by the technology. In previous studies, we have shown how RFID can improve in-stock position. Other studies have shown the benefit of RFID for promotional items. In this vein of continuing to prove the business case for RFID, we examine RFID's impact on inventory accuracy. Inventory accuracy is one of the keys to an efficient and effective supply chain, yet is often referred to as the 'missing link' in retail execution. Forecasting, ordering, and replenishment use inventory records as input, and the quality of these functions is impacted by inventory accuracy. To study the impact of RFID on inventory accuracy, Wal-Mart commissioned a study to examine the store-level influence of RFID on perpetual inventory. For 23 weeks, a single category of product (air fresheners) was inventoried daily in eight test stores equipped with a new RFID-based perpetual inventory adjustment tool and eight matching control stores (without RFID). Preliminary results presented in this paper indicate that RFID does reduce inventory inaccuracy in the presence of normal business processes for on-hand adjustments (i.e. RFID as a supplement to existing manual adjustment processes).
... Researchers refer to inventory inaccuracy as the discrepancy that arises between the actual and the recorded inventory level in a retail store (DeHoratius and Raman, 2008;Kang and Gershwin, 2005;Kok and Shang, 2007). Hardgrave et al. (2009) and Hardgrave et al. (2013) argue that retailer inventory records are usually incorrect. Kang and Gershwin (2005) contend that inventory inaccuracy is present in about 51% of the records examined, DeHoratius and Raman (2008) at about 65%, and Gruen and Corsten (2007) quantify it at about 55%. ...
... Infrequent counts are often not veryeffective at reducing inventory inaccuracy throughout the year. Other retailers allow in-store information systems to adjust automatically based on estimated error rates (Hardgrave et al., 2009). However, it is difficult to determine the appropriate adjustment factor and incorrectly estimated adjustments may provide a false sense of accuracy (Hardgrave et al., 2009). ...
... Other retailers allow in-store information systems to adjust automatically based on estimated error rates (Hardgrave et al., 2009). However, it is difficult to determine the appropriate adjustment factor and incorrectly estimated adjustments may provide a false sense of accuracy (Hardgrave et al., 2009). Auto-ID technologies like RFID provide retailers with an opportunity to gain unprecedented visibility in stores, and the ability to more accurately predict store inventory and reduce stockouts (Hardgrave et al., 2013;Lee and Özer, 2007). ...
Purpose
Perceived as an antidote to poor execution, interest in radio frequency identification (RFID)-enabled visibility has grown. The purpose of this paper is to examine whether and how RFID-enabled visibility with item-level tagging improves store execution.
Design/methodology/approach
The authors conducted three field-based experiments in collaboration with two Fortune 500 retailers.
Findings
RFID-enabled visibility resulted in a sizable decrease in inventory record inaccuracy and out-of-stocks for inventory held in both the backroom and on the sales floor. The decrease in inventory record inaccuracy and out-of-stocks was even greater among products stored primarily on the sales floor suggesting the benefits from increased visibility accrue to sales floor inventory management processes. In contrast, the authors found no significant improvement in inventory record inaccuracy and no substantive improvement in out-of-stocks among products stored primarily in the backroom suggesting that increased visibility does not improve backroom management processes.
Practical implications
The authors recommend retailers focus on sales floor inventory management when seeking to improve store execution through the adoption of RFID-enabled visibility. In the context, only partial evidence exists that backroom inventory management improves with RFID-enabled visibility.
Originality/value
Retailers seeking to invest in RFID technology must estimate potential performance improvements before making firm-specific cost-benefit analyses. They must also understand where and how these performance improvements will accrue. This research uniquely presents the results of a three field experiments that quantify the changes in retail execution associated with RFID adoption.
... IRI may affect the operational and financial performance of a company in various ways (e.g., Rinehart, 1960;Hardgrave, Aloysius, & Goyal, 2009;Chuang, Oliva, & Liu, 2016). If the IS overcounts the available inventory, the system may fail to order at the right point in time, causing stockouts and a reduction in service levels. ...
... Using four years of data from stores of a large retailer, Ton and Raman (2010) showed that increasing product variety and inventory levels has an indirect negative effect on store sales through their impact on phantom products-products that are physically present at the store, but only in storage areas where customers cannot find or purchase them. Other authors, such as Hardgrave et al. (2009Hardgrave et al. ( , 2013 or Bertolini, Bottani, Romagnoli, and Vignali (2015), investigated how the technology used for updating stock records can contribute to reducing IRI. Field experiments reported in these studies showed that radio frequency identification (RFID) technology, as compared to barcodes, can substantially reduce both IRI and manual adjustments of inventory records. ...
Practical experience and scientific research show that there is scope for improving the performance of inventory control systems by taking into account the discrepancies between the actual physical inventory levels and those recorded in the information system (IS). Such discrepancies, which are often referred to as inventory (record) inaccuracies, are a major concern in contemporary supply chains where commitments to orders are usually made based on IS records only. Empirical data obtained in two case studies motivate the development of a multiperiod inventory control model that explicitly accounts for the differences between physical inventory levels and IS stock records. Numerical experiments help derive some key managerial insights. We find that previous important results on the behavior of the optimal order quantity in the retailing environment do not necessarily apply in an e‐retailing/Business‐To‐Business (B2B) context. We adjust and apply the zero balance walk technique to the e‐retailing/B2B case and deduce a simple and efficient learning mechanism about the errors’ distributions. We close with an agenda for further research in this area.
... To note, the following TBRS are often RFID-based (Hardgrave, Aloysius, & Goyal, 2009). ...
... RFID is more effective in reducing inventory inaccuracy in product categories that have higher sales volume and greater variety. (Bertolini et al., 2012;Bhattacharya et al., 2011;Chen, 2012;Hardgrave et al., 2013Hardgrave et al., , 2009Kasiri et al., 2011;Konomi & Roussos, 2006;Rekik et al., 2008;Zhu, Hong, & Lee, 2013) Smart shelf A RFID enabled smart shelf provides real-time inventory visibility on the store floor and detect incorrectly placed items. It also can recognize when expiration dates will be exceeded and inform the staff accordingly. ...
... Few papers study the relationship between RFID and inventory inaccuracies. Hardgrave et al. (2009) investigate the impact of RFID on inventory inaccuracies and conclude that RFID improves inventory inaccuracies more than when adjusted manually. Heese (2007) considers a supply chain model where a Stackelberg manufacturer decides the wholesale price and a retailer determines how much quantity to order for sale to customers. ...
Purpose
In spite of the fact that today’s supply chains are global, it is surprising the current research lacks studies primarily focusing on Latin American (LATAM) firms. To enhance our understanding in this domain, this study examines the impact of technology investments on inventory turnover, asset turnover and employee productivity measures within the LATAM context.
Design/methodology/approach
We use an unbalanced panel of over 2,101 firm-year observations from the Worldscope database between 2010 and 2022 and limit our analysis to firms located in the Latin American region. We use panel data and regression analysis to test our hypotheses.
Findings
The findings reveal a positive impact of technology investments on inventory turnover, asset turnover and employee productivity.
Originality/value
There is a dearth of research in the discipline primarily focusing on the firms from the LATAM region. The extant literature has largely focused on the Western firms and we know from prior cross-cultural research that there are significant differences in terms of how firms and governments operate differently in emerging and non-Western regions such as LATAM or parts of Asia and Africa. By specifically focusing on a sample of LATAM firms, the study makes important contributions to the extant literature with respect to the role of technology investments in improving inventory turnover, and also on asset turnover and employee productivity. The study further provides implications for practice.
... Inventory precision determines forecasting, procurement, and replenishment quality, where inventory records are used as input. Inaccurate demand forecasting due to phantom inventory (overstated PI) may be improved by including RFID in the process [152]. ...
This article intends to systematically identify and comparatively analyze state-of-the-art supply chain (SC) forecasting strategies and technologies. A novel framework has been proposed incorporating Big Data Analytics in SC Management (problem identification, data sources, exploratory data analysis, machine-learning model training, hyperparameter tuning, performance evaluation, and optimization), forecasting effects on human-workforce, inventory, and overall SC. Initially, the need to collect data according to SC strategy and how to collect them has been discussed. The article discusses the need for different types of forecasting according to the period or SC objective. The SC KPIs and the error-measurement systems have been recommended to optimize the top-performing model. The adverse effects of phantom inventory on forecasting and the dependence of managerial decisions on the SC KPIs for determining model performance parameters and improving operations management, transparency, and planning efficiency have been illustrated. The cyclic connection within the framework introduces preprocessing optimization based on the post-process KPIs, optimizing the overall control process (inventory management, workforce determination, cost, production and capacity planning). The contribution of this research lies in the standard SC process framework proposal, recommended forecasting data analysis, forecasting effects on SC performance, machine learning algorithms optimization followed, and in shedding light on future research.
... L'utilisation de systèmes d'identification automatique (auto-ID) a apporté de nouvelles capacités telles que la lecture d'un grand nombre d'étiquettes en même temps, et a réduit le nombre d'erreurs causées par la saisie manuelle des données. Elle aégalement permis de réduire les inexactitudes concernant le nombre d'articles dans les stocks pendant l'entreposage ou dans les véhicules pendant l'expédition[119]. L'utilisation de systèmes de suivi et de localisation basés sur l'identification automatique permet de localiser facilement les articles dans les grands entrepôts, les ports et les terminaux. ...
Le projet développé dans le cadre de cette thèse s'inscrit dans un programme de recherche plus global et ambitieux qui vise à proposer un nouveau type de système de gestion de marchandises en centre urbain. Pour ce faire, le projet ambitionne d’aborder la gestion des marchandises d’un point de vue systémique, en intégrant la gestion au domaine des Systèmes de Transport de Marchandises Intelligent (STI). Cette vision systémique de la gestion des marchandises en zone urbaine passe par l’emploi de véhicule électrique et autonome pour assurer les tâches de livraison et d’enlèvement de marchandises.De plus, pour circuler, ces véhicules auront la possibilité d’utiliser le réseau de transport public existant des villes, pour se déplacer depuis un centre de distribution urbain (CDU) vers des points de livraison finaux. Enfin, toujours concernant les véhicules électriques et autonomes, la vision systémiques des STI implique d’intégrer au processus d’optimisation, pour la livraison et l’enlèvement des marchandises, l’ensemble des caractéristiques intrinsèques propres aux technologies mise en œuvre telles que le véhicule électrique à batterie (VEB) et les véhicules autonomes.
... To protect themselves against the negative effects of IRI, companies can identify and eliminate the sources of errors, correct the errors, for example during stocktakes, or reflect the existence of errors in the (design of the) stock replenishment policies (Hardgrave et al., 2009;Rekik et al., 2019a). One topic that has attracted some attention in the past is the use of RFID in preventing and correcting IRI. ...
Purpose
Ensuring high on-shelf availability at low inventory costs remains an important challenge in retailing. Inaccurate inventory records, i.e. discrepancies between the stock records displayed in the inventory system and the stock quantity actually found in the retail store, have been identified as one of the most important drivers of retail stockouts in the past. The purpose of this work is to investigate the causes of positive inventory discrepancies in retailing, i.e. where there is more inventory on-hand than identified by the inventory system.
Design/methodology/approach
Based on input from retailers, the authors develop a simulation model of a retail store that considers various error-prone processes and study in a full factorial test design how the different operational errors may drive inventory discrepancies, paying special attention to the sources of positive inventory record inaccuracies.
Findings
This makes it possible to gain insights into the process parameters retailers need to adjust to avoid inventory records becoming inaccurate. In addition, the authors analyze how positive inventory discrepancies relate to stockouts to further our understanding of the role so-called phantom products may play in a retailing context.
Originality/value
While negative inventory discrepancies (where the stock that is available in the store is less than what the system displays) and their sources (theft, shrinkage, etc.) have been discussed quite frequently in the literature, the causes of positive inventory discrepancies (where the available inventory exceeds the system inventory) have received much less attention.
... According to some commercial studies, over 30% of the data in ERP systems is faulty (Salmon, 2016), which suggests that the problem is not marginal but has significance for the business. The notion of supply chain data inaccuracy has been backed up by several academic studies over the years (see, for instance, Hardgrave, 2009). According to Oghazi et al. (2018), RFID-empowered ERP enhances SCM by facilitating the effective and efficient flow of products, finances and information, maximising profit for the entire network of suppliers, manufacturers, distributors and customers (Oghazi et al., 2018). ...
Purpose
The digital twin (DT) has become a heated topic among supply chain and information technology practitioners. While many papers in this area focus on technical tactics and learnings, this research paper aims to evaluate its business implications. According to literature, it has also been a weakly covered topic.
Design/methodology/approach
The research was conducted as a single case study, in which the impact of radio-frequency identification–enabled DT was quantified from the business benefits perspective. The evaluation was carried out using a framework model developed for the assessment identifying key contribution areas and the dynamics explaining how the benefits are expected to land on a business level.
Findings
Implementation of the DT was calculated to provide a significant supply chain performance improvement. The main contributor in the immediate benefits was the reduction in supply chain costs, in person-hours. However, the product availability improvement was conservatively considered in the evaluation, and thus, this paper estimates that it, together with higher cognition tools, constitutes the main financial return in the long run showing in the topline improvement. This paper suggests that the shift to DT can be generally limited by the cost savings perspective.
Originality/value
To the best of the authors’ knowledge, this is one of the first studies released on the business impact of the cutting-edge technical solution area of the DT in supply chain management. In practice, businesses require an understanding of the business implications to decide on the investments in this area; thus, it is a critical part of the discussion.
... A typical RFID setup in fashion retail stores consists of a handheld reader allowing store staff to perform daily RFIDenabled stocktakes. This drastically improves inventory accuracy [4], as stocktakes are performed quickly in short and regular intervals. ...
In recent years, Radio Frequency Identification (RFID) technology has been applied to improve numerous processes, such as inventory management in retail stores. However, automatic localization of RFID-tagged goods in stores is still a challenging problem. To address this issue, we equip fixtures (e.g., shelves) with reference tags and use data we collect during RFID-based stocktakes to map articles to fixtures. Knowing the location of goods enables the implementation of several practical applications, such as automated Money Mapping (i.e., a heat map of sales across fixtures). Specifically, we conduct controlled lab experiments and a case-study in two fashion retail stores to evaluate our article-to-fixture prediction approaches. The approaches are based on calculating distances between read event time series using DTW, and clustering of read events using DBSCAN. We find that, read events collected during RFID-based stocktakes can be used to assign articles to fixtures with an accuracy of more than 90%. Additionally, we conduct a pilot to investigate the challenges related to the integration of such a localization system in the day-to-day business of retail stores. Hence, in this paper we present an exploratory venture into novel and practical RFID-based applications in fashion retails stores, beyond the scope of stock management.
... RFID is more effective in reducing inventory inaccuracy in product categories that have higher sales volume and greater variety. (Kasiri, Sharda, and Hardgrave 2011;Bhattacharya 2011;De Mel et al. 2016;Goyal et al. 2016;Hardgrave, Aloysius, and Goyal 2009;Hardgrave, Aloysius, and Goyal 2013;Chen 2012;Konomi and Roussos 2006;Rekik, Sahin, and Dallery 2008;Rizzi, Romagnoli, and Thiesse 2016;Sheik Mohamed, Chittibabu, and Sreekanth 2016;Solti et al. 2018;Zhu, Hong, and Lee 2013) ...
The purpose of this study is to identify different types of technology-based retail services (TBRS) for brick and mortar environments and analyze them by developing a framework that can be used to classify TBRS in respect of their dimensions, categories and category elements. The research design is twofold. First, this study conducts a systematic literature review to identify a relevant body of various TBRS in scientific literature. Second, it uses grounded theory as a method to analyze the identified TBRS from part one, in order to expose TBRS classification dimensions for developing a classification framework. This study identified 35 TBRS from 124 peer-reviewed articles, published worldwide between 2003 and 2019. It shows that TBRS can be classified along four dimensions: (1) participant issues, (2) technology issues, (3) information issues, and (4) intended purposes. The findings indicate that the majority of TBRS has technology-generated customer contact and is a fixed in-store totem with a low task complexity. Most TBRS enhance customer experience or improve store management. This study addresses a significant and on-going change in retailing. It provides insights into the TBRS market and offers an analytical classification framework to take TBRS to pieces, showing their elements and purposes. The framework can both guide future research and aid retail practitioners in analyzing TBRS.
... Economic benefits of RFID implementation were discussed widely in the literature (e.g. [5,[26][27][28][29] and can be generalized to: • improvement of supply chain transparency through actual and real time data what enable better supply chain and inventory management (decrease of stocks), • acceleration of product flow through automated, faster and error-proof identification of goods as work in progress semi-finished and finished goods, • decrease of labor costs related to logistics processes. ...
Nowadays, manufacturing companies need to operate a business and apply technology that are competitive as well as sustainable from a social, environmental as well as economical perspective. One of the technologies gaining substantial interests over manufacturing companies is radio frequency identification, which supports logistics and information flow within organizations. Much of the literature and theory surrounding assessment of RFID systems explores environmental (mainly positive) and economic (cost and benefits) impacts only. Some researchers have argued that current assessment methods often fail to involve sufficient evaluation in terms of social considerations. Therefore, an indicator-based sustainability assessment framework of RFID technology should be expected. This paper aims to close this research gap in the literature and present an indicators framework for sustainability assessment of RFID systems in manufacturing. Results depict a list of designed RFID indicators which, depending on the complexity of RFID technology to be implemented may convenient for assessing sustainability of the technology. It concludes based on the analyzed literature that the identification of RFID systems’ industrial indicators lies in accessibility and reliability data used for their validation. Finally, the indicator-based framework for sustainability assessment is verified for its usefulness on the case of dynamic spaghetti diagrams supported by Real Time Locating System. The paper concludes with a brief discussion on opportunities and limits of RFID-dedicated sustainability indicators.
... This can also be used to scale up the number of robots with varying demand. Inventory management is done in conjunction with Radio-frequency identification (RFID) RFID tagging [15]. Procurement and dispatch of items from the warehouse can be monitored with a common database with RFID tag readers located on procurement robots and entry/exit points. ...
Robotic automation is being increasingly proselytized in the industrial and manufacturing sectors to increase production efficiency. Typically, complex industrial tasks cannot be satisfied by individual robots, rather coordination and information sharing is required. Centralized robotic control and coordination is ill-advised in such settings, due to high failure probabilities, inefficient overheads and lack of scalability. In this paper, we model the interactions among robotic units using intelligent agent based interactions. As such agents behave autonomously, coordinating task/resource allocation is performed via distributed algorithms. We use the motivating example of warehouse inventory automation to optimally allocate and distribute delivery tasks among multiple robotic agents. The optimization is decomposed using primal and dual decomposition techniques to operate in minimal latency, minimal battery usage or maximal utilization scenarios.
... This can also be used to scale up the number of robots with varying demand. Inventory management is done in conjunction with Radio-Frequency IDentification (RFID) tagging [23]. Procurement and dispatch of items from the warehouse can be monitored with a common database with RFID tag readers located on procurement robots and entry/exit points. ...
Robotic automation is being increasingly proselytized in the industrial and manufacturing sectors to increase production efficiency. Typically, complex industrial tasks cannot be satisfied by individual robots, rather coordination and information sharing is required. Centralized robotic control and coordination is ill-advised in such settings, due to high failure probabilities, inefficient overheads and lack of scalability. In this paper, we model the interactions among robotic units using intelligent agent based interactions. The autonomous behavior of these agents requires task/resource allocation to be performed via distributed algorithms. We use the motivating example of warehouse inventory automation to optimally allocate and distribute delivery tasks among multiple robotic agents. The optimization is decomposed using primal and dual decomposition techniques to operate in minimal latency, minimal battery usage or maximal utilization scenarios. These techniques may be applied to multiple deployments involving coordination and task allocation between autonomous agents.
... AdvanRobot is able not only to replace human operators, but to dramatically increase the efficiency and accuracy in providing inventory, while also adding the capacity to produce store maps and product location. Some important benefit of the inventory capabilities of AdvanRobot are the reduction in stock-outs, which can cause a drop in sales and are the most important source of frustration for customers; the reduction of the number of items per reference maximizing the number of references per square meter; and reducing the cost of capital due to overstocking [1,7]. Another important economic benefit expected from the inventorying and location capabilities of the robot is the ability to efficiently prepare on-line orders from the closest store to the customer, allowing retailers to compete with the likes of Amazon (a.k.a. ...
AdvanRobot proposes a new robot for inventorying and locating all the products inside a retail store without the need of installing any fixed infrastructure. The patent pending robot combines a laser-guided autonomous robotic base with a Radio Frequency Identification (RFID) payload composed of several RFID readers and antennas, as well as a 3D camera. AdvanRobot is able not only to replace human operators, but to dramatically increase the efficiency and accuracy in providing inventory, while also adding the capacity to produce store maps and product location. Some important benefit of the inventory capabilities of AdvanRobot are the reduction in stock-outs, which can cause a drop in sales and are the most important source of frustration for customers; the reduction of the number of items per reference maximizing the number of references per square meter; and reducing the cost of capital due to overstocking [1, 7]. Another important economic benefit expected from the inventorying and location capabilities of the robot is the ability to efficiently prepare on-line orders from the closest store to the customer, allowing retailers to compete with the likes of Amazon (a.k.a. omnichannel retail). Additionally, the robot enables to: produce a 3D model of the store; detect misplaced items; and assist customers and staff in finding products (wayfinding).
... Recently, several academic papers have investigated the potential benefits of RFID in supply chains and the possibility of RFID to solve different supply chain problems such as vendor managed inventory (VMI) [39,40], bullwhip effect [39,41,42], inventory accuracy [43][44][45][46], and replenishment policies [47][48][49]. Their results indicate that RFID technology ensures the accuracy of inventories through solving the problems that cause transaction errors, shipment errors, delivery errors, scanning errors, incorrect identification, shrinkage errors, unavailable for sale, theft, vendor fraud, administrative errors, inaccessible inventory, misplacement, and supply errors. ...
This paper proposes an innovative real-time manufacturing cost tracking system (RT-MCT) which integrates the concepts of lean manufacturing and RFID. The RT-MCT is developed for tying lean operational aspects and financial costs together in real-time. The new real-time cost tracking method is vital in identifying the root causes of redundant costs and pinpointing the most costly root causes and their locations so that their elimination becomes a top priority. Furthermore, RT-MCT mirrors the monetary impacts of implementing lean improvements at the various value stream stages in today’s mass-customization production environments that support the decision-making strategies. The system presented is validated through building a simulation model along with extensive calculations to demonstrate that the system is physically implementable using the RFID real-time data.
... The consecutive paper on this matter (Hardgrave, Waller, & Miller, 2006) examined further the influence of RFID on OOS, relating the RFID effect to sales velocity (i.e., number of units sold per day), and it showed that the influence on RFID varies by the units sold per day of each reference. Also, in a 2009 paper, RFID's impact on inventory accuracy was examined (Hardgrave, Aloysius, & Goyal, 2009). The paper reported that RFID does reduce inventory inaccuracy in the presence of normal business processes as a supplement to existing manual adjustment processes. ...
OBJECTIVE: This paper aims at proposing a new framework for the classification of RFID deployments in fashion and apparel retailing. The framework encompasses several different use cases (UCs) pursued by fashion and apparel retailers in the last decade, and updates, expands and goes beyond what has already been presented in the related literature. DESIGN, METHODOLOGY, APPROACH: We carried out a comprehensive literature review on RFID deployments in fashion and apparel retail. We searched different sources of information, that is, scientific papers, conferences and seminars proceedings, websites, magazines, newspapers etc., up to 160 papers that were carefully analysed and organised in a structured database. This data set also comprehends information from confidential projects. We analyse contents on the level of single RFID projects, that is, feasibility studies, proofs of concept, pilots or deployments. For each project, we determine what specific UCs were at stake. Eventually, the framework of all possible RFID UCs emerged from the analysis, and we set up a panel of industry partners to validate the framework using the Delphi method. FINDINGS: We structured the new framework along two levels: first, 6 categories were identified (i.e., level 1 use cases). Each category was then detailed, resulting in a total of 18 specific UCs (i.e., level 2 use cases). Each level 2 UC corresponds to a very specific objective pursued by an RFID implementation. For each UC, we propose a set of business metrics to evaluate deployment success as well as benefits achieved. PRACTICAL IMPLICATIONS: From a practitioner's perspective, the framework offers a comprehensive and well-structured overview of the cost- and the revenue-related potentials of RFID implementations in the industry. Researchers, on the other hand, may use the framework to identify opportunities for further research regarding RFID deployments in retailing. ORIGINALITY/VALUE: Our framework is based on the current body of literature, and complements prior studies, which served as the starting point for our research.
... Table 1 Selected papers on design, implementation and evaluation of RFID solutions for logistics processes. [19] Design of business processes for supply chain using RFID -support for implementation of supply chain management information system [20] Design and evaluation RFID system, SCORbased integration of infrastructure with manufacturing system [21] Design of sophisticated and innovative RFID solutions [22] Design of RFID systems as IT innovationsbased on general framework for "mindful IT innovation" [23] Analysis of benefits and barriers of RFID implementation based on literature review and questionnaire surveys [24] Justification of RFID implementation -very high generalization level [25] Evaluation of RFID impact on processes based on authors reference model of processes and benefits [26][27][28] Evaluation of RFID implementation benefits in supply chain of selected market and branch [29,30] Evaluation of RFID implementation benefits in supply chain -case study [17] Evaluation of RFID implementation benefits in supply chain -literature review of case studies (ex post evaluation) and methods for justification (ex ante) [31] Evaluation of RFID benefits based on simulation model [32] Evaluation of RFID benefits based on analytical models [33] Evaluation of RFID benefits based on literature review, case studies and critical success factors [34] Evaluation of RFID implementation based on simulation [35] Evaluation of RFID potential impact based on SCOR [36] Evaluation of RFID implementation financial effectiveness Analyzed works allow for evaluation of specific solutions, classification of benefits in different application areas (especially in supply chains), indication of relations of qualitative benefits and measurable factors, evaluation in terms of characteristics of specific economies, branches and markets. All the authors conclude that RFID is promising technology that eliminates numerous dysfunctions of communication processes in supply chains and is implemented successfully for logistics processes in many branches. ...
The meaning of CPS and IoT with indication of RFID position in those concepts was outlined. Research program related to assessment of RFID technology was presented. Author deducted on problems related to RFID implementations and RFID essentially for logistics of manufacturing companies. Research goals and problems were formulated. Tools, techniques, models and methods that could be utilized were proposed and discussed. Research was focused on design of a new method to support early decision making phases for RFID application in logistics of manufacturing companies. Author stated that literature and practice lacks of complex method to answer if RFID is strategically important for the company, which processes should be RFID-supported, how RFID-supported processes should be designed and if RFID-support is rational. Framework for assessment of RFID technology with illustrative example was discussed.
... RFID technology can be used to detect discrepancies between the inventory available on the shelf to satisfy the customer's demand and the backroom inventory. Related to this latter point, one of the biggest problems that retailers face concerns the inaccuracy of inventory records; inaccuracy can lead to wrong decisions in managing inventories, thus generating either excessive costs or stock-out situations (Hardgrave et al., 2009a). During a study conducted in the fresh food supply chain, Bertolini et al. (2013) observed that, thanks to the improved inventory accuracy and shelf management and to the reduction of stock-out situations, RFID technology could bring an increase in the sales turnover of about 1.75%. ...
In this paper, we aim to provide evidence of the capability to generate an increase in sales turnover by implementing an RFID-based system able to improve the shelf replenishment operations, reducing stock-out situations in fashion retailing. To evaluate the increase in sales turnover, we developed a pilot project involving a store of a major fashion firm located in northern Italy. RFID technology was used to generate daily a list of models that turned out to be available in the backroom, but not on the shelves (referred to as “scandals”), to drive employees in the replenishment process. By subsequently monitoring the consumer’s purchase, we estimated the contribution of RFID technology to the store turnover. We found that increasing the availability of products (and of scandals in particular) on the shelves leads to a significant increase in the sales volume. Moreover, the availability of those products on the shelves stimulates the customers to ask for different sizes or colours of the items exposed, generating further potential for sales increase. The results of this study may encourage fashion retailers to invest in RFID technology, whose cost often appears as high, since the increase in turnover can significantly contribute to recover the initial investment required. Also, since we carried out an in-field implementation, targeting a real scenario of the fashion industry, our results are realistic, solid and reliable. Fashion retailers can look at them as a concrete possibility to improve their business by adopting RFID technology.
... This technology enables efficient control of inventory distribution by exchanging real-time information upon arrival to each location. Hardgrave et al. (2009) examine RFID's impact in inventory accuracy being itself one of the keys to an efficient and effective supply chain yet is often referred to as the missing link in retail execution. ...
The successful implementation of any innovation requires an understanding of its benefits and costs. This study examines the changes in costs and benefits associated with technology process innovation adoption as the innovation diffuses across healthcare field. Using RFID as an exemplar technology, the study shows the importance of benefits and costs associated with technological process innovation. The analysed case study provides the order of magnitude of the problems that can be solved with the introduction of the new system and it shows the information provided as output by the informatics system associated. For technology managers in general, the study has identified the profile of costs and benefits associated with technology adoption, and offered some indication of how this profile changes depending on the stage of technology evolution. This study proposed the implementation of a drug management system based on RFID technology. The study also revealed as the adoption of RFID technology allows perfect traceability of the drug throughout the system. In addition, this technology greatly reduces the action of operators in the operations of the management and administration and therefore the occurrence of errors.
... As prevention, the IM can eliminate some of the root causes of inventory inaccuracy by implementing technologies such as RFID tags (Dutta et al. 2007, Heese 2007, Langer et al. 2007, De Kok et al. 2008. Using Walmart's data, Hardgrave et al. (2009) illustrate that RFID tags reduce inventory inaccuracy. But RFID technology cannot eliminate inaccuracy as it suffers from inaccurate read (item detection) rates. ...
Inventory inaccuracy is common in many businesses. While retailers employ cash registers to enter incoming orders and outgoing sales, inaccuracy arises because they do not record invisible demand such as spoilage, damage, pilferage, or returns. This setting results in incomplete inventory and demand information. An important inventory control problem therefore is to maximize the total expected discounted profit under this setting. Allowing for dependence between demand and invisible demand, we obtain the associated dynamic programming equation with an infinite-dimensional state space, and reduce it to a simpler form by employing the concept of unnormalized probability. We develop an analytical upper bound on the optimal profit as well as an iterative algorithm for an approximate solution of the problem. We compare profits of the iterative solution and the myopic solution, and then to the upper bound. We see that the iterative solution performs better than the myopic solution, and significantly so in many cases. Furthermore, it gives a profit not far from the upper bound, and is therefore close to optimal. Using our results, we also discuss meeting inventory service levels.This article is protected by copyright. All rights reserved.
... This way, RFID is able to reduce lead times, to make more efficient the delivery process, to reduce the need for material handling, to improve asset management and space and to encourage information sharing. Concerning the Inventory level, through the increasing efficiency of processes and supply chain visibility, is able to reduce the need for stocks, limits the shrinkages (due to theft, abduction, expired products etc.) and counteracts the Bullwhip effect, i.e. the amplification of demand variability from downstream to upstream supply chain (Hardgrave et al., 2009). In the Customer Relationship Management, the RFID technology, particularly at the retail business level, enables significant improvements in terms of customer service and of shopping experience. ...
The paper presents a practical tool for supporting practitioners, consultants and researchers in the achievement of logistics effectiveness improvements in the fashion supply chain, through the determination of the expected profitability concerning RFID-based technology investments. Moreover, the limits related to the multipurpose implementation of this technology have been highlighted. The research explores the main cost items of an RFID based application, in order to understand to which extent the increased effectiveness, usually triggered by its implementation, is able to cover those costs. Main sources of knowledge are practitioners' report, scientific literature and case studies on the specific field. These investigations have conducted to the evidence that the RFID based applications and their investments are usually undertaken without a clear understanding of all the implications on the companies' P&L (profit and loss): the tool presented has been designed to fill this gap, providing an easy-to-use algorithm to evaluate a priori the profitability of the investment. The aim of this study is to support practitioners and managers in evaluating a priori the profitability of a RFID based investment in the fashion supply chain, understanding the related pay-back period (PBP); this indirectly will increase the success of RFID-based project implementations while reducing the uncertainty in terms of economical results. The main contribute of this research resides in the model's ease of use, quickness and effectiveness, grossly defining the economical expectations of an RFID investment; given the difficulties in defining precise figures, the study could support the investment choices.
... Numerous studies in literature highlighted the potential of RFID for improving inventory accuracy, primarily in the fast moving consumer goods field. As regards the in-field implementations of RFID, an important study was carried out by Hardgrave et al. (2009a), who monitored 16 Wal-Mart retail stores, for 23 weeks. Starting from the 11th week, eight of those stores were equipped with an RFID-based inventory management system, while the remaining "control" stores continued to adopt the original inventory management system. ...
In this paper, we assess the level of inventory accuracy that can be reached by adopting radio frequency identification (RFID) technology for inventory count operations in the fashion retailing. Thanks to an in-field implementation, we carried out two series of RFID inventory counts and compared the resulting accuracy level with that obtained exploiting the traditional barcode (BC) technology, so as to highlight the main pros and cons of the RFID adoption.
As a general conclusion, the findings from the experimental campaigns and the analyses carried out suggest that RFID inventory counts are more reliable than BC ones. Moreover, under several circumstances, RFID allows detecting out-of-stock situations that are not evident when using either the BC technology or the inventory data stored in the company’ information system. From those findings, a trend of the inventory accuracy as a function of the time required for RFID inventory counts is empirically derived. Such a trend can be exploited in practical cases to estimate the accuracy level achievable with inventory counts depending on the time dedicated to those activities.
... Similarly, the numerous success stories from real-world trials should be interpreted with care as information on how these results were achieved is usually fragmented and hardly allows for generalized conclusions. Among the reported retail store benefits are efficiency gains in the receiving process (O'Connor, 2006), higher inventory accuracy in the backroom (Hardgrave et al., 2009;O'Connor, 2007), increased shelf availability (Wilding and Delgado, 2004), and optimization of promotions and sales (Hudson, 2007;Roberti, 2006). A detailed report from a pilot project at Wal-Mart was prepared by Hardgrave et al. (2006). ...
The use of Radio Frequency Identification (RFID) as a tool for improving shelf replenishment processes in stores has attracted the interest of several retailers. However, the performance of RFID-based inventory control policies is influenced by a variety of design choices, technology characteristics, and external influences. The present simulation study aims to analyze and discuss the impact that these factors exert on the economic efficiency of RFID. We consider policies for RFID tagging on both the item level and the case level and compare these to a traditional replenishment process using periodic reviews. Our model incorporates shelf stock information generated by RFID and accounts for imperfect read rates and technology-specific costs. Our results indicate that significantly different sensitivities to cost and time-related factors, demand rate, and read rate must be considered when choosing a particular policy. Moreover, we discuss the consequences of model extensions and additional constraints on process performance. The results support both researchers and practitioners in the modeling and implementation of RFID-based inventory control systems.
... RFID technology can increase the operational efficiencies by reducing labour cost associated with performing inventory counts of shelved goods (Bushnell, 2000), improving theft prevention and increasing authenticity control (Ashton, 2000). RFID technology can also be used to eliminate the problem of inventory record inaccuracy in supply chain (Heese, 2007;Hardgrave, Aloysius, & Goyal, 2009) Using RFID, Dole Food Company, the world's largest producer and marketer of fresh fruits and vegetables, was able to initiate a voluntary recall of packaged salads that were suspected of E. coli bacteria contamination before any consumers were reported ill (Uldrich, 2007). ...
RFID (Radio frequency identification) is an emerging technology that can usher enormous opportunities in Agri-food sector. Some of the current applications are automatic toll collection, library management, counterfeit or theft prevention system, animal traceability and access control system. Advancements in sensor technology, communication networks and their integration with RFID technology, are expanding the application domain including real time monitoring, quality control, food safety, traceability system, intelligent transportation and online information systems for end-user. Unique features of RFID systems presents a number of potential benefits like improvement in efficiency and speed of operations, increased accuracy of information, minimized labor cost, reduction of inventory losses. This paper is intended to provide readers an overview of recent implementations of RFID in various segment of Agri-food sector together with the obstacles hampering its wide adoption. Basics of RFID tag including types of tag, frequency ranges and standards available for data transmission are also discussed.
This article systematically identifies and comparatively analyzes state-of-the-art supply chain (SC) forecasting strategies and technologies within a specific timeframe, encompassing a comprehensive review of 152 papers spanning from 1969 to 2023. A novel framework has been proposed incorporating Big Data Analytics in SC Management (problem identification, data sources, exploratory data analysis, machine-learning model training, hyperparameter tuning, performance evaluation, and optimization), forecasting effects on human workforce, inventory, and overall SC. Initially, the need to collect data according to SC strategy and how to collect them has been discussed. The article discusses the need for different types of forecasting according to the period or SC objective. The SC KPIs and the error-measurement systems have been recommended to optimize the top-performing model. The adverse effects of phantom inventory on forecasting and the dependence of managerial decisions on the SC KPIs for determining model performance parameters and improving operations management, transparency, and planning efficiency have been illustrated. The cyclic connection within the framework introduces preprocessing optimization based on the post-process KPIs, optimizing the overall control process (inventory management, workforce determination, cost, production and capacity planning). The contribution of this research lies in the standard SC process framework proposal, recommended forecasting data analysis, forecasting effects on SC performance, machine learning algorithms optimization followed, and in shedding light on future research.
This study provides evidence of supply chain (SC) management based on the digitalization of a fresh fruit-supply chain (i.e., chestnuts) using a radio-frequency identification technology (RFID). This research adopted the value-chain operation reference (VCOR) to assess the implications, issues, and benefits of the SC digitalization, and to explore how RFID can be configured regarding the VCOR blocks. Within this framework, the SC stages, processes, and operations were assessed using a tailored performance measurement system (PMS) including a set of metrics tracked, quantified, and evaluated alongside a monitoring field campaign. The results indicated that: (i) the benefits deriving from the RFID are constrained by specific organizational procedures adopted in operations management; (ii) the PMS Indicators of the centralized warehouse, balancing the inventory between the processing line and the distribution channels, presented the most significant improvements across the whole SC.
Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10% of the country’s gross domestic product (GDP) and around 8% of the employment. India is the world’s fifth-largest global destination in the retail space. India ranked 73rd in the United Nations Conference on Trade and Development's Business-to-Consumer (B2C) E-commerce Index 2019. The sizeable middle class and nearly unexplored retail market in India are the main enticing factors for international retail behemoths seeking to move into newer markets, which will help the Indian retail business grow more quickly. The urban Indian consumer's purchasing power is increasing, and branded goods in categories like apparel, cosmetics, footwear, watches, beverages, food, and even jewellery are gradually evolving into business and leisure that are well-liked by the urban Indian consumer. The retail sector in India is expected to reach a whopping US 4.11 billion FDIs between April 2000-June 2022. Online retail market in India is projected to reach US 55 billion in 2021, due to rising online shoppers in the country. Online penetration of retail is expected to reach 10.7% by 2024 versus 4.7% in 2019. The present study tries to study Awareness, Agreement, Satisfaction and future Expectations about adoption of Technologies in the selected Retail Stores from the viewpoint of Customer’s residing in Gujarat State. After research on Customers’, the study identified that Customers were least aware about Vending machine. Customers mainly preferred technology implementation because it “saves the time” & provides them “better customer service at an affordable price”. Customers were satisfied about various retailing technologies but they were still not satisfied by Credit Card security as it creates privacy issues in the mind of them.
This article intends to systematically identify and comparatively analyze state-of-the-art supply chain (SC) forecasting strategies and technologies. A novel framework has been proposed incorporating Big Data Analytics in SC Management (problem identification, data sources, exploratory data analysis, machine-learning model training, hyperparameter tuning, performance evaluation, and optimization), forecasting effects on human-workforce, inventory, and overall SC. Initially, the need to collect data according to SC strategy and how to collect them has been discussed. The article discusses the need for different types of forecasting according to the period or SC objective. The SC KPIs and the error-measurement systems have been recommended to optimize the top-performing model. The adverse effects of phantom inventory on forecasting and the dependence of managerial decisions on the SC KPIs for determining model performance parameters and improving operations management, transparency, and planning efficiency have been illustrated. The cyclic connection within the framework introduces preprocessing optimization based on the post-process KPIs, optimizing the overall control process (inventory management, workforce determination, cost, production and capacity planning). The contribution of this research lies in the standard SC process framework proposal, recommended forecasting data analysis, forecasting effects on SC performance, machine learning algorithms optimization followed, and in shedding light on future research.
Radio Frequency Identification (RFID) technology is rapidly expanding its application area from simple inventory management to advanced location tracking and supply chain management in a wide range of industries. Because of the potential benefits gained and high investment costs incurred by RFID, firms need to carefully assess every RFID opportunity and challenge to ensure that their resources are spent judiciously. Because of the lack of analytical methods for measuring the benefits and costs, this chapter presents a mathematical model for the evaluation of RFID investment in manufacturing and supply chain. This model provides a basis for the authors’ understanding of RFID value creation and ways to build an RFID business case for an RFID investment justification.
Radio Frequency Identification (RFID) technology is rapidly expanding its application area from simple inventory management to advanced location tracking and supply chain management in a wide range of industries. Because of the potential benefits gained and high investment costs incurred by RFID, firms need to carefully assess every RFID opportunity and challenge to ensure that their resources are spent judiciously. Because of the lack of analytical methods for measuring the benefits and costs, this chapter presents a mathematical model for the evaluation of RFID investment in manufacturing and supply chain. This model provides a basis for the authors’ understanding of RFID value creation and ways to build an RFID business case for an RFID investment justification.
Purpose
The combination of the latest advancements in information and communication technologies with the latest developments in AutoID technologies, especially radio frequency identification (RFID), brings the possibility of high-resolution, item-level visibility of the entire supply chain. In the particular case of retail, visibility of both the stock count and item location in the shop floor is crucial not only for an effective management of the retail supply chain but also for physical retail stores to compete with online retailers. The purpose of this paper is to propose an autonomous robot that can perform stock-taking using RFID for item-level identification much more accurately and efficiently than the traditional method of using human operators with RFID handheld readers.
Design/methodology/approach
This work follows the design science research methodology. The paper highlights a required improvement for an RFID inventory robot. The design hypothesis leads to a novel algorithm. Then the cycle of development and evaluation is iterated several times. Finally, conclusions are derived and a new basis for further development is provided.
Findings
An autonomous robot for stock-taking is proven feasible. By applying a proper navigation strategy, coupled to the stream of identifications, the accuracy, precision, consistency and time to complete stock-taking are significantly better than doing the same task manually.
Research limitations/implications
The main limitation of this work is the unavailability of data to analyze the actual impact on the correction of inventory record inaccuracy and its subsequent implications for the supply chain management. Nonetheless, it is shown that figures of actual stock-tacking procedures can be significantly improved.
Originality/value
This paper discloses the potential of deploying an inventory robot in the supply chain. The robot is called to be a key source of inventory data conforming supply chain management 4.0 and omnichannel retail.
New business initiatives and current trends create more complexities in a retail supply chain and lead to the need for information technology adoption. The deployment of technologies has increased the efficiency in supply chain operations as well as enhanced customer satisfaction. As a result, IT has gained a lot of attention from academics, practitioners and policy makers. However, a holistic view of IT across the retail supply chain literature is limited; therefore, this paper conducts further research on this topic and discusses the role of IT in store-based retail supply chains. The perceived benefits and challenges faced by retailers are evaluated following a structured literature review.
The results reveal that the most widespread technologies are radio frequency identification, point-of-sale and other inter-organisation systems providing visibility in value chain, reduce labour, lower operation time and minimise operating costs. However, such innovative technologies are still limited to major retailers due to implementation costs and the compatibility within existing systems and trading partners’ systems.
This study focuses on RFID and its implementation at two retail chains, Wal-Mart in United States (U.S.) and Metro Group in Europe, who have successfully implemented this technology. It identifies the impact of RFID on improving supply chain performance in the retail industry. The researchers have concentrated on both explorative and indicative studies in an effort to understand the impact that the adoption of RFID technology will have on improving the performance of the supply chain by comparing two different case studies. This research study has found that coordination and integration operations are important for inventory management and related operations, and they are also important factors that contribute to performance improvement in both case studies. In addition, this research study has found that RFID's information-sharing support for buyers in the supply chain has promoted the accuracy of purchasing forecasts. Finally, it is found that RFID has provided increased flexibility of operations, using smart shelves and reducing the cost of inventory management.
This paper presents the result of the RFID logistics pilot III (RLP3) project, which has dealt with the deployment of the radio frequency identification (RFID) technology and the development of an IT infrastructure for the management of the real-time data collected in a fresh food supply chain. More specifically, we report the benefits achievable in that supply chain, with a particular focus on the processes of inventory management at the retail store (both in the backroom and in the store area), shelf replenishment from the backroom and store area activities. The supply chain considered during the RLP3 consists of two distribution centres and three retail stores; the project targeted 145 fresh food items, belonging to the dairy and cold cuts categories. The real-time management of data relating to product history, through a specific dashboard, emerged as a promising tool to improve significantly some specific inefficiencies of the retail store, such as product traceability, amount of sales and démarque, out-of-stock occurrence, on-shelf availability and product freshness.
This chapter reveals the role of radio frequency identification (RFID) in modern libraries, thus demonstrating the theoretical and practical concept of RFID; the utilization of RFID in global operations; RFID perspectives in modern libraries (i.e., operating cost, information technology infrastructure cost, skilled RFID workers, access rate, patron policy, data security, barcode factor, and patron issues); the applications of RFID in modern libraries (i.e., data management, circulation, inventory, assistance in searching and orientation, data accuracy and reliability, theft prevention, utilization statistics for serials, and personal service); and the significance of RFID in modern libraries. RFID solutions can be utilized to reduce the operating costs through decreasing labor costs, enhancing automation, improving tracking and tracing, and preventing the loss of materials. Applying the RFID will significantly improve educational performance and gain sustainable competitive advantage in modern libraries.
One of the aspects of a good inventory control system is low Inventory Record Inaccuracy (IRI). IRI control ought to be an integral part of PLM by helping to further streamline the production, transportation and service stages. This paper contributes to the expanding debate on linking error generation to Inventory Record Inaccuracy (IRI) and its ensuing effects on performance. Methods of discovering and eliminating the root causes of IRI are presented. A System Dynamics (SD) simulation model is used to examine and confirm the substantial impact of error generation and IRI on workflow. The results of the model show that even a small undetected source of IRI can accumulate and eventually destabilize the entire system.
This paper presents a systematic literature review of papers that were published in academic journals on the applications of radio frequency identification (RFID) in supply chain management between the years 2000 and 2015. As the literature on RFID is not confined to specific disciplines or repositories, this paper proposes a discipline-based framework for classifying RFID literature. Five main classification categories are used in this paper: technology, supply chain management, research methodology, application industries, and social aspects. The paper then focuses on the category of supply chain management and reviews 1187 articles that were published between 2000 and 2015 in rated journals. All the papers reviewed are further classified into eight subclasses under this category of supply chain management. The review yields useful insights into the anatomy of RFID literature in supply chain management, enhances evidence-based knowledge, and contributes to informing practice, policymaking and future research. The review reveals that even presently, despite technical and cost challenges, enormous potential exists for the application of RFID in several areas of supply chain management and the prospects are likely to grow into the future. Since RFID solutions have emerged primarily over only the past 20 years, significant research opportunities exist and would need to be addressed to continue to support the technology’s maturation, evaluation, adoption, implementation, and diffusion.
This chapter reveals the role of radio frequency identification (RFID) in modern libraries, thus demonstrating the theoretical and practical concept of RFID; the utilization of RFID in global operations; RFID perspectives in modern libraries (i.e., operating cost, information technology infrastructure cost, skilled RFID workers, access rate, patron policy, data security, barcode factor, and patron issues); the applications of RFID in modern libraries (i.e., data management, circulation, inventory, assistance in searching and orientation, data accuracy and reliability, theft prevention, utilization statistics for serials, and personal service); and the significance of RFID in modern libraries. RFID solutions can be utilized to reduce the operating costs through decreasing labor costs, enhancing automation, improving tracking and tracing, and preventing the loss of materials. Applying the RFID will significantly improve educational performance and gain sustainable competitive advantage in modern libraries.
The potential of the innovative Radio Frequency Identification (RFID) technology to be applied for support, acceleration and automation of the circulation process of library collection is presented. Technology basics, and hardware and software components are described. Two different radio standards used in libraries are compared. The goal is to present the potential of RFID technology for libraries, to highlight the differences and to build a basis for further consideration of UHF and HF alternatives.
Radio Frequency Identification (RFID) became one of the major disruptive innovations that have attracted the attention of researchers and practitioners around the world. Recognizing the business value of RFID, firms are rapidly adopting RFID technology in a wide range of industries including hospitals, logistics, manufacturing, and retailing. Since the adoption of RFID largely depends on the perceived potential benefits and the investment costs, firms need to carefully assess every intangible and tangible benefits and costs to make sure the adoption is financially, operationally, and strategically justifiable. This chapter provides a literature review on RFID applications in business and valuation methods for RFID and presents an analytical evaluation model for RFID investment for manufacturing and retail organizations. Finally, this chapter concludes with the implications of the chapter for academics and practitioners.
Network communication technologies have been growing explosively due to the increasing demand on faster and simpler communication; hence, providing new communication technologies is a challenging task. To make this task easy, many researchers have developed different network modeling and simulation tools with different characteristics. In this paper, simulation of Near Field Communication (NFC) logical layer control protocol is proposed to investigate efficiency of NFC device in peer-to-peer mode. For this purpose, Colored Petri Net (CPN) and Timed Automata (TA) have been used for analyses. According to the results, CPN was better than TA for simulating NFC logical layer control protocol because it could provide more details on complex communication network. Copyright © 2014 Institute of Advanced Engineering and Science. All rights reserved.
This paper analyzes the management of pharmaceutical drugs problem and the characteristics of RFID sensor networks. Then it describes how to use RFID sensor network technology to solve pharmaceutical drugs logistics, storage security, which improves pharmaceutical logistics service, and enhances pharmaceutical drug safety management to reduce accidents.
The aim of this Article is to provide a study on the issue of inventory inaccuracy and to show the manner in which RFID technology can improve the inventory management performance. The objective of inventory control is to monitor the stock flow of merchandises in order to understand the operating profit and loss. A proper mechanism of inventory control could be made to help the profitability. As RFID is applied to inventory control, it can improve efficiency, enhance accuracy and achieve security. In this paper, we introduce the evolution of different mechanisms of inventory control with RFID system - counting method, collect-all method, and continuous monitoring method. As for improving the accuracy of inventory check during business hours, continuous monitoring is the solution. We introduce the infrastructure of the RFID inventory management system based on M2M architecture can make the inventory be efficiently monitored with instant warnings.
In the field of textile and clothing, radio frequency identification (RFID), which is one of the most promising technological innovations, is used in manufacturing, inventory control, warehousing, distribution, logistics, automatic object tracking and supply chain management. Various retailers and manufacturers (of clothing as well as consumer goods) such as CVS, Tesco, Prada, Benetten, Wal-mart and Procter & Gamble, are now implementing the technology and exploring the impact of the technology on their business. RFID technologies may improve the potential benefits of supply chain management through reduction of inventory losses, increase of the efficiency and speed of processes and improvement of information accuracy. The basic of success lies in understanding the technology and other features to minimize the potential problems. Although the technology existed for several years, the technological challenges and cost issues are the major hurdles for the widespread use of RFID. In this paper, the authors have addressed the technology of RFID and various applications related to inventory management, production control, retail management, brand segregation etc. in textile and clothing industry. In addition, the disadvantages, challenges and future directions of RFID technology have also been highlighted.
In order to solve the practical issues that the management of container inventory is difficult, time-consuming and overuse of manpower in manufacturing enterprises.A method is presented for the material container inventory management, that is, through radio frequency identification technology to achieve positioning and quantity of material containers. Then, the traditional manual inventory becomes automatic inventory which occurs at each container’s transfer process. The material container inventory management based on RFID is designed in the paper through the introduction of the applied RFID technology, architecture system design, hardware selection and software design. At last the practicability and superiority of the system is tested by run the system in a factory.
Many companies have automated their inventory management processes and now rely on information systems when making critical decisions. However, if the information is inaccurate, the ability of the system to provide a high availability of products at the minimal operating cost can be compromised. In this paper, analytical and simulation modelling demonstrate that even a small rate of stock loss undetected by the information system can lead to inventory inaccuracy that disrupts the replenishment process and creates severe out-of-stock situations. In fact, revenue losses due to out-of-stock situations can far outweigh the stock losses themselves. This sensitivity of the performance to the inventory inaccuracy becomes even greater in systems operating in lean environments. Motivated by an automatic product identification technology under development at the Auto-ID Center at MIT, various methods of compensating for the inventory inaccuracy are presented and evaluated. Comparisons of the methods reveal that the inventory inaccuracy problem can be effectively treated even without automatic product identification technologies in some situations.
Inventory managers, tasked with providing adequate levels of material support, need to be able to gain insights, in a computationally easy manner, to the magnitude of improvements in protection levels against stockouts that can be gleaned from the three mechanisms available to them—more buffer stock, more physical inventories, or more corrective action to eliminate or reduce the causes for the errors arising in the first place. Armed with quantitative conservative estimates of the types of improvements available from any of these three mechanisms or combinations of the mechanisms, and the relative cost of each, the manager is is a better position to select a cost-effective, remedial course of action.
In spite of making substantial investments in information technology planning systems, retailers are struggling with two execution problems—" inventory record inaccuracy" and "misplaced stock keeping units (SKUs)"—that are hurting their performance and ability to satisfy customers. At one leading retailer, sixty-five percent of their inventory records were inaccurate (i.e., recorded inventory levels did not reflect actual inventory levels). Misplaced SKUs, at another leading retailer, prevented one in six customers who requested help from a sales associate from finding the products that were available in a store. These execution problems reduce profits by more than 10%. Moreover, performance along these two dimensions of execution varies substantially among stores within the same chain that use identical information technology. By examining the systematic differences that exist among stores, this article identifies the drivers of inventory record inaccuracy and misplaced SKUs and recommends steps retailers can take to improve operational execution in their chains.
Purpose
This research aims to consider the impact of common inventory system inaccuracies that occur in retail outlets on the inventory levels, fill rate, and service level of those outlets by simulating daily customer demand and random error in the inventory system.
Design/methodology/approach
The simulation experiments vary the amount of inventory system error, the frequency of inventory record error correction, the size of the daily demand, the number of days in the replenishment system's review interval, and the replenishment system's customer service level.
Findings
Inventory system error and the frequency with which the error is corrected are statistically significant for fill rate and service level. Thus, inaccuracies in inventory levels affect a retail outlet's ability to service its customers, though at the single SKU level, the results do not indicate a practical impact due to countervailing effects.
Practical implications
Retail outlets must be aware that error exists and can influence the behavior of their replenishment systems, but the overall impact may not be as significant as it might appear.
Originality/value
This research extends prior work on the effects of inventory inaccuracies and clarifies the debate pertaining to their ultimate effects on retail performance outcomes.
Most retailers suffer from substantial discrepancies between inventory quantities recorded in the system and stocks truly available to customers. Promising full inventory transparency, radio frequency identification (RFID) technology has often been suggested as a remedy to the problem. We consider inventory record inaccuracy in a supply chain model, where a Stackelberg manufacturer sets the wholesale price and a retailer determines how much to stock for sale to customers. We first analyze the impact of inventory record inaccuracy on optimal stocking decisions and profits. By contrasting optimal decisions in a decentralized supply chain with those in an integrated supply chain, we find that inventory record inaccuracy exacerbates the inefficiencies resulting from double marginalization in decentralized supply chains. Assuming RFID technology can eliminate the problem of inventory record inaccuracy, we determine the cost thresholds at which RFID adoption becomes profitable. We show that a decentralized supply chain benefits more from RFID technology, such that RFID adoption improves supply chain coordination.
Mostly fueled by mandates, adoption, and implementation of the RFID, technology in the retail industry is growing rapidly. At these early stages of adoption, one puzzling issue for retailers and suppliers is the compelling business case for RFID. In order to explore the potential business case for RFID, we conducted a case study using actual RFID data collected by a major retailer for the cases shipped by one of its major suppliers. We show the physical layout of the RFID readers on a partial supply-chain covering product movement from distribution centers to retail stores. First, in the analysis phase, we identify several performance metrics that can be computed from the RFID readings. Next, using this RFID data, we compute the values of those performance metrics. These values represent mean time between movements at different locations. Then, we discuss how these measures can assist in improving logistical performance at a micro supply chain level of operations between a distribution center and a retail store. We present how such information can be valuable to both the retail store operator and the supplier. We also discuss the initial lessons learned from actual RFID data collected in the field, in terms of data quality issues.
Examining nearly 370,000 inventory records from 37 stores of a large retail chain, we find 65% to be inaccurate (i.e., recorded inventory does not equal on-hand inventory), at the time of the physical inventory audit. Using two different measures of inventory record inaccuracy, we demonstrate, empirically, that the variation in these measures is associated with specific inventory management practices and store characteristics. Our analysis highlights where managerial attention is most needed to resolve this critical problem and suggests opportunities for further research.
Inventory record inaccuracy: An empirical analysis University of Chicago Graduate School of Business Working Paper RFID for better supply-chain management through enhanced information visibility
- N Dehoratius
- A Raman
DeHoratius, N., & Raman, A. (2004). Inventory record inaccuracy: An empirical analysis. University of Chicago Graduate School of Business Working Paper. Retrieved from http://bctim.wustl.edu/calendar/mediafiles/IRI04.pdf Delen, D., Hardgrave, B., & Sharda, R. (2007). RFID for better supply-chain management through enhanced information visibility. Production and Operations Management, 16(5), 613–624.
Top 10 grocery IT imperatives: It really is now or never. AMR Research. Retrieved from http://www.acornsys.com/resources/downloads/ top-10-grocery-imperatives Estimating service level impacts from changes in cycle count, buffer stock, or corrective action
- S Landoc
- R Garf
- J Suleski
Landoc, S., Garf, R., & Suleski, J. (2006). Top 10 grocery IT imperatives: It really is now or never. AMR Research. Retrieved from http://www.acornsys.com/resources/downloads/ top-10-grocery-imperatives.pdf Morey, R.C. (1985). Estimating service level impacts from changes in cycle count, buffer stock, or corrective action. Journal of Operations Management, 5(4), 411–418.
A comprehensive guide to retail out-of-stock reduction in the fast-moving consumer goods industry
- T W Gruen
- D Corsten
Gruen, T.W., & Corsten, D. (2007). A comprehensive guide to retail out-of-stock reduction in
the fast-moving consumer goods industry. Retrieved from http://www.gmabrands.com/
publications/docs/2007/OOS_fullreport.pdf
Does RFID reduce out of stock? A preliminary analysis
- B Hardgrave
- M Waller
- R Miller
Hardgrave, B., Waller, M., & Miller, R. (2005). Does RFID reduce out of stock? A preliminary
analysis. White Paper, Information Technology Research Institute, Sam M. Walton
College of Business, University of Arkansas. Retrieved from http://itri.uark.edu/
research/display.asp?article5ITRI-WP058-1105
RFID's impact on out of stocks: A sales velocity analysis
- B Hardgrave
- M Waller
- R Miller
Hardgrave, B., Waller, M., & Miller, R. (2006). RFID's impact on out of stocks: A sales velocity
analysis. White Paper, Information Technology Research Institute, Sam M. Walton
College of Business, University of Arkansas. Retrieved from http://itri.uark.edu/
research/display.asp?article5ITRI-WP068-0606
Top 10 grocery IT imperatives: It really is now or never
- S Landoc
- R Garf
- J Suleski
Landoc, S., Garf, R., & Suleski, J. (2006). Top 10 grocery IT imperatives: It really is now or
never. AMR Research. Retrieved from http://www.acornsys.com/resources/downloads/
top-10-grocery-imperatives.pdf
Inventory record inaccuracy: An empirical analysis. University of Chicago Graduate School of Business Working Paper
- N Dehoratius
- A Raman
DeHoratius, N., & Raman, A. (2004). Inventory record inaccuracy: An empirical analysis.
University of Chicago Graduate School of Business Working Paper. Retrieved from
http://bctim.wustl.edu/calendar/mediafiles/IRI04.pdf