Executive Briefings

Walton Study: RFID Improves Inventory Accuracy 13 Percent

A preliminary analysis of the effect of radio frequency identification on retail-inventory accuracy demonstrated that an automated, RFID-enabled inventory system improved accuracy by about 13 percent in test stores compared to control stores. The investigation, conducted by researchers in the RFID Research Center, a unit of the Information Technology Research Institute in the Sam M. Walton College of Business, also revealed that manual inventory adjustments by store personnel significantly declined in test stores due to the automated, RFID-based system.
"Inventory accuracy is one of the keys to an efficient and effective supply chain," says Bill Hardgrave, director of the research center and principal investigator. "Yet, inventory accuracy, which determines important processes such as ordering and replenishment, is often poor, with inaccuracy rates sometimes as high as 65 percent. Our results suggest that RFID technology makes a difference. The 13-percent improvement found in this study can significantly reduce unnecessary inventory, and the value of this reduction for a company like Wal-Mart, with all of its suppliers, can be measured in millions of dollars."
Source: Newswise, http://www.newswise.com

A preliminary analysis of the effect of radio frequency identification on retail-inventory accuracy demonstrated that an automated, RFID-enabled inventory system improved accuracy by about 13 percent in test stores compared to control stores. The investigation, conducted by researchers in the RFID Research Center, a unit of the Information Technology Research Institute in the Sam M. Walton College of Business, also revealed that manual inventory adjustments by store personnel significantly declined in test stores due to the automated, RFID-based system.
"Inventory accuracy is one of the keys to an efficient and effective supply chain," says Bill Hardgrave, director of the research center and principal investigator. "Yet, inventory accuracy, which determines important processes such as ordering and replenishment, is often poor, with inaccuracy rates sometimes as high as 65 percent. Our results suggest that RFID technology makes a difference. The 13-percent improvement found in this study can significantly reduce unnecessary inventory, and the value of this reduction for a company like Wal-Mart, with all of its suppliers, can be measured in millions of dollars."
Source: Newswise, http://www.newswise.com