• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » The Lessons of RFID: After Three Years of Pilots, Companies Still Search for Elusive ROI

The Lessons of RFID: After Three Years of Pilots, Companies Still Search for Elusive ROI

June 1, 2007
Global Logistics & Supply Chain Strategies

Radio frequency identification technology was the subject of much excitement-some might say hype-between 2004 and 2006. During that time, the average consumer-products company spent $800,000 on RFID pilots, according to Lora Cecere, a research director with AMR Research Inc. What did they gain as a result? The answer is mixed. There's no doubt that Wal-Mart Stores, the driver behind much of the recent RFID activity, has seen some benefits. Last year, it reported that RFID pilots had led to a 16-percent reduction in stockouts. And the efficiency of moving products from backroom to store shelf increased by 60 percent. Still, a number of industry observers say that RFID hasn't really delivered the goods-not, at least, in line with original expectations. Most consumer-goods companies haven't properly evaluated the payback on RFID, Cecere says. Only eight out of 70-plus manufacturing clients of AMR submitted return-on-investment (ROI) summaries. "Most CP companies just are not measuring sales lift and the impact on out-of-stock levels," Cecere writes in a recent AMR report. "Instead, the focus has been on cost and compliance. As a result, after three years of testing, there is no answer for the industry on the benefits of RFID."

There is plenty of opportunity in RFID, Cecere says. Those eight pilots suggest that up to 27 percent of stockouts can be eliminated by improving the supplier's response to retailer needs. Currently, it takes between seven and nine days to correct a stockout, resulting in a substantial amount of lost sales. Inventory inaccuracy is also a problem, further delaying critical store replenishment. But RFID remains far from a common practice among most suppliers. AMR had predicted that the technology would see widespread adoption in 2008. "This will not happen," Cecere says. "We predict that even over the next five years that the industry will still be learning through ... focused pilots."

Visit www.amrresearch.com.

RELATED CONTENT

RELATED VIDEOS

Technology Automotive Consumer Packaged Goods
KEYWORDS Automotive consumer packaged goods RFID & Barcode Technology
  • Related Articles

    Store of the Future, Open for Business for Years Now, Has More Work to Do

    Three Tipping Points for RFID in the World of Fashion

    Unchaining the Value of RFID for Unmatched Flexibility and Fast ROI

  • Related Events

    Building a hyperconnected supply chain: The three levers of transformation

Global Logistics & Supply Chain Strategies

TNT Logistics Sports New Name: CEVA Logistics

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: Cuomo Seeks to Buy Vaccines Directly; EU to Push for 70% Vaccination by Summer

    Coronavirus
  • U.S. and China Trade

    How China Won Trump’s Trade War and Got Americans to Foot the Bill

    Global Supply Chain Management
  • AT&T

    How the Pandemic Has Altered AT&T’s Global Sourcing Strategy

    Coronavirus
  • container port

    New Global Visibility App Sees Delays Before They Happen

    Logistics
  • U.S. Vaccine Shift Stirs New Unease as 128 Million Join Line

    U.S. Vaccine Shift Stirs New Unease as 128 Million Join Line

    Coronavirus

Digital Edition

Scb home issue 27

2020 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

  • LSP Wows Global Client, Quickly Advances to Become End-to-End Provider

Visit Our Sponsors

6 River Systems ArcBest Armada
aThingz BluJay Burris Logistics
DSC Logistics DCSA (Digital Container Shipping Association) DHL Resilience360
Genpact GEP Honeywell Intelligrated
Infor Logility Magnitude Software
MPO Old Dominion Oliver Wight
OpenSky Ports America Purolator
QAD Precision Red Classic Riskmethods
TGW Systems Transportation Insights Watson Land Company
Westfalia Technologies Workjam Yang Ming
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright © 2016 - 2018 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing