Executive Briefings

Bloomingdale's Improves Inventory Accuracy 27 Percent During Item-Level RFID Pilot

A 13-week pilot project at Bloomingdale's, which involved using EPC Gen 2 passive RFID tags to monitor the inventory levels of denim jeans, improved inventory accuracy 27 percent, while reducing labor costs.

The RFID Research Center, a part of the Information Technology Research Institute (ITRI) at the Sam M. Walton College of Business at the University of Arkansas, published the results of the pilot, which it conducted last fall at two Bloomingdale's stores - a control store and a test store. Authors of the study determined that when the retailer relied solely on its current inventory management system (which shows what should be on hand based on what has been received in shipments and what has been sold), the accuracy of the inventory decreases over time. But when inventory was counted using RFID, the accuracy was improved by 27 percent. The researchers also found that using RFID to identify and count individual items took, on average, 96 percent less time than using barcodes for the same task. Finally, they found that using RFID to determine which items had been stolen helped further improve inventory accuracy.

Avery Dennison EPC Gen 2 passive UHF RFID tags and handheld Motorola EPC Gen 2 UHF RFID readers were used in the test.

This 13-week study is part of a larger research effort that ITRI is undertaking in order to demonstrate and quantify the business value of RFID in retail environments. A copy of the Bloomingdale's study and related research is available for download at ITRI's website (http://itri.uark.edu/91.asp). Enter "RFID" as the keyword.

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A 13-week pilot project at Bloomingdale's, which involved using EPC Gen 2 passive RFID tags to monitor the inventory levels of denim jeans, improved inventory accuracy 27 percent, while reducing labor costs.

The RFID Research Center, a part of the Information Technology Research Institute (ITRI) at the Sam M. Walton College of Business at the University of Arkansas, published the results of the pilot, which it conducted last fall at two Bloomingdale's stores - a control store and a test store. Authors of the study determined that when the retailer relied solely on its current inventory management system (which shows what should be on hand based on what has been received in shipments and what has been sold), the accuracy of the inventory decreases over time. But when inventory was counted using RFID, the accuracy was improved by 27 percent. The researchers also found that using RFID to identify and count individual items took, on average, 96 percent less time than using barcodes for the same task. Finally, they found that using RFID to determine which items had been stolen helped further improve inventory accuracy.

Avery Dennison EPC Gen 2 passive UHF RFID tags and handheld Motorola EPC Gen 2 UHF RFID readers were used in the test.

This 13-week study is part of a larger research effort that ITRI is undertaking in order to demonstrate and quantify the business value of RFID in retail environments. A copy of the Bloomingdale's study and related research is available for download at ITRI's website (http://itri.uark.edu/91.asp). Enter "RFID" as the keyword.

Read Full Article