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Wal-Mart: RFID Reducing Out-of-stocks
On Friday afternoon Wal-Mart released its first RFID-related announcement in months, and it was a good one. The retailer released the results of a University of Arkansas (UA) study which assessed the effect of its RFID deployment.
Oct 17, 2005—This article was originally published by RFID Update.
October 17, 2005—On Friday afternoon Wal-Mart made its first RFID-related announcement in months, and it was a good one. The retailer released the results of a University of Arkansas (UA) study which assessed the supply chain effects of its RFID deployment. Commissioned by Wal-Mart but conducted independently by UA, the study yielded the following key findings:
The 29-week study looked at 24 Wal-Mart establishments, 12 of which were receiving RFID-tagged product, 12 of which were not. The items monitored remained fixed throughout the study, as did as many components as possible to ensure that RFID's effect was isolated as the only variable. Dr. Bill Hardgrave, director of the RFID Research Center at the University of Arkansas and overseer of the study, explained the process of measuring out-of-stocks: "The 16 percent reduction in merchandise out-of-stocks was determined by physically scanning out-of-stocks at the shelf every day. A baseline was established and this was then compared to the number of out-of-stocks in both sets of stores once the RFID technology was enabled in the pilot stores. The net result of the impact of RFID, removing any other influences, was a reduction of 16 percent in the occurrences of products being out-of-stock on the shelf." Furthermore, "Out-of-stocks on EPC tagged items were reduced at a rate more than three times faster than that of the non-tagged items within the same store." Rollin Ford, executive vice president for logistics in Wal-Mart, noted, "Manual orders placed by stores were reduced by approximately 10 percent." Wal-Mart will soon be releasing more details and findings from the study.
As part of the same announcement, Wal-Mart clarified its mandate, offering updates related to Gen2, recent pricing announcements, and its own internal progress:
Read the full Wal-Mart Press Release
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