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Innovating continuous review policies with RFID to minimize obsolete inventory
Abstract
Inventory inaccuracy is a critical issue faced by many companies. Automated Identification Technologies (AITs) such as Radio Frequency Identification (RFID) can be utilized to alleviate the occurrence of situations such as obsolete pharmaceuticals in hospitals. RFID has been used to aid inventory management systems by providing real time availability of the item information including location and status. The benefit of RFID over barcodes is immense as it allows users to employ continuous review models while barcodes are only capable of being used in conjunction with periodic review models. Although RFID has the ability to improve inventory control policies, one must note that it is not 100 percent accurate. Factors such as metal or poor orientation can limit the readability of the tag; thus, the reliability of tag reads must be taken into account to provide more accurate inventory policies. We seek to demonstrate that although optimizing inventory policies with technologies such as RFID can improve inventory control, policies need to involve reliability information to result in an optimal policy. The goal of this paper is to develop an inventory policy based on continuous review policies that accounts for the reliability of RFID in order to minimize obsolete inventory.
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Addresses consumer perspectives of Radio Frequency Identification (RFID). States that some consumers put up barriers against new technology, while others welcome innovations. Idengtifies that market leaders can pretty much use this technology as they wish, meaning boom time for consumer product firms and pain for privacy advocates.
Radio frequency identification (RFID) is a term used for any device that can be sensed at a distance by radio frequencies with few problems of obstruction. The origins of the term lie in the invention of tags that reflect or retransmit a radiofrequency signal. According to a recent article by Forrester Research, the minimal ‘Slap and Ship’ approach to RFID compliance will cost an individual company between $2 million and $20 million. Because retailers like Wal-Mart plan to share with their suppliers all the RFID-generated data points (from when a case/pallet enters their distribution centre until it leaves their stockroom), suppliers will eventually be able to use this data as a powerful forecasting tool. RFID is an enabling technology that can potentially facilitate a real-time, end-to-end supply chain visibility system. Suppliers who integrate full-scale RFID systems will realize efficiencies in time, material movement, inventory planning, shipping and warehousing both internally and externally. This paper provides a brief overview of the RFID technology, mandates by retailers and federal agencies, advances towards global standardization and typical consumer level RFID applications, and discusses RFID initiatives taken by some of the global leaders in apparel, consumer goods and fresh produce industries.
Radio Frequency Identification (RFID) is an automatic identification technology, relying on storing and remotely retrieving data using devices called RFID tags. This technology is being used in enterprise supply chain management-related applications to improve the efficiency of inventory tracking and management. However, this technology has not been able to realize its promised potential because of several factors, such as lack of congruous worldwide standards, privacy issues and less than perfect read rates in supply chain applications. This research aimed to evaluate the readability issues commonly faced by tagged cases of palletized consumer products. The variables studied in this research were product-package type, tag type, tag location on cases, pallet pattern and forklift speed through a RFID portal representative of a dock door in a warehouse. To determine which variables were the most significant, a binary logistic regression was run. The number of tags read was inputted for the number of events and total number of products per pallet as the number of trials. The variables product content, pallet pattern, and speed, and all interactions were then included in the model. It was observed that readability greatly varies for different product-package systems, with paper towels producing near-perfect reads, followed by bottled water and carbonated soda cans. The slower the forklift truck speed, the better the readability across the board, and the best pallet patterns were dependent on the product-package type. For bottled water, the best pallet pattern was column, and for carbonated soda, the interlocking pattern.