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30% Out-of-stock Reductions from RFID

Attendees at this week's RFID Journal LIVE! were updated with the latest findings from an ongoing study by the University of Arkansas of RFID's effects in the retail supply chain. The findings indicate that RFID technology is resulting in a whopping 30% reduction in out-of-stocks for products selling between 0.1 and 15 units daily.
Tags: Retail
May 04, 2006This article was originally published by RFID Update.

May 4, 2006—As part of an ongoing study by the University of Arkansas of RFID's effects in the retail supply chain, Bill Hardgrave, founder and director of the university's RFID Research Center, updated attendees at this week's RFID Journal LIVE! with the latest findings. Hardgrave said that RFID technology is resulting in a whopping 30% reduction in out-of-stocks for products selling between 0.1 and 15 units daily.

Recall that last October, Hardgrave and his team published their first official findings, the most dramatic of which was a 16% out-of-stock reduction (see Wal-Mart: RFID Reducing Out-of-stocks). While that number was considered a strong validation of RFID's benefits, it turns out that the 16% figure was in fact understated. "The preliminary results released late last year were conservative by design in that we did not want to overestimate RFID's impact," said Hardgrave. Since then, the UA team has been analyzing the data further, so the 30% reduction is actually "a much better estimate of RFID's true benefit."

The Wal-Mart-commissioned study is being conducted independently by the RFID Research Center, which is a subunit of the Information Technology Research Institute at UA's Sam M. Walton College of Business. The UA team collected the data between February 14 and September 12 of last year from 24 Dallas, Texas-area Wal-Mart stores, half of which were RFID-enabled, half of which were not. In addition to the 16% reduction in out-of-stocks, RFID-tagged items were manually reordered 10% less and replenished three times faster than non-tagged items.

The new findings presented at this week's conference are expected to be published in an official white paper in the coming weeks.
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