The real value proposition for RFID in the supply chain turns out to be in eliminating stockouts rather than tracking cases,” says Grackin. Additionally, improvements in RFID technology and declining costs make item tagging much more feasible, she says.
“Old RFID systems had these big, clunky handheld readers,” Grackin says. “Now there is a lot more diversity in products and price points – there are smaller, less expensive devices that enable companies to have more readers and make it possible for smaller companies to enter the market.”
A technology known as “illumination” has a lot of promise, says Grackin. “This is where you put RFID readers in the ceiling, which gives you 100-percent read rates, without people having to walk around with scanners, which never get to 100 percent. That opens the door to all sorts of other business applications."
Item tagging enables retailers to quickly see what is selling in the store or shipping from fulfillment houses, which enables faster replenishment of “hot” products and fewer discounts, says Grackin. “That is a very strong value proposition and is why retailers like Macys, Marks & Spencer, Zara and Kohls are rolling out item tagging programs.” Other retail applications for RFID, such as self checkout, also are gaining traction, she says. “And using RFID for tracing and tracking has been slowly growing right along,” she says. “The great thing about RFID is that you can find so many different business applications for it.”
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