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University of Arkansas Study Finds 60 Ways to Use RFID in Apparel Supply Chain
Researchers say the results prove their hypothesis that there are a multitude of ways that item-level RFID tracking can benefit garment suppliers.
Jan 18, 2011—A report released by the University of Arkansas' Information Technology Research Institute (ITRI) has found 60 unique business cases for the use of item-level RFID in the supply chain, as determined by apparel suppliers. The researchers who carried out the study are now looking to launch pilots involving some of the more far-reaching use cases on the list (those that touch the most supply chain participants). The research team will select supplier companies to conduct those pilots or accept volunteers, and then measure each pilot's success.
The report was based on information solicited in the fall of 2010 from a wide range of companies in various countries, and in many different types of facilities, including sewing, assembly, knitting, finishing and distribution. The group employed multiple research methodologies, such as site visits, in-depth interviews, reviews of extant literature and case studies, logical deduction, and the application of existing theoretical frameworks. Altogether, six garment suppliers participated in the study, with facilities in the United States, Bangladesh, China, the Dominican Republic, Honduras and Nicaragua. In each case, researchers visited the participating supplier's facilities, examining each aspect of that company's processes, in both scheduled and unscheduled on-site tours. ITRI did not include retailers and third-party transportation firms in its survey, according to David Bradley Cromhout, ITRI's codirector. Retailers' operations, however, "constitute the handle of the bull-whip effect on supply chain inventory movement," he says, "and therefore were a constant factor in much of the supplier investigation," as were logistics providers.
"The biggest takeaway is the extent and scope that RFID reaches across the supply chain," Cromhout says. With this list, "logistics guys can see that RFID touches every aspect of the supply chain," he notes, adding that the study is "an academically neutral confirmation of the use cases that exist." The researchers determined that the 60 business cases fall under three categories: quality management, inventory management and inbound and outbound. (The inbound-outbound category comprises movements of materials and data either from a physical node, such as a dock door or a store back door, or from ownership of one party to the next within the supply chain.) The use cases included outbound automation, pick-and-pack speed, shelf replenishment, receiving accuracy, shrinkage reduction, the tracking of returns, electronic proof of deliver, and density and space planning.
The Phase I survey found that because there are so many use cases throughout the supply chain, item-level RFID tagging in the apparel industry could reduce each case's touch rate (the number of times that staff members would need to handle a case of goods) as it moved from a manufacturer to retailers, as well as yield more accurate shipping data from the point of manufacture, and increase a store's apparel sales.
According to those companies queried, item-level tagging provides apparel manufacturers with visibility into the contents of each carton being shipped, thereby allowing automated auditing that can reduce errors and decrease the number of customer chargebacks that result if the wrong items are shipped, or if goods are not shipped at all. The researchers went on to find that because RFID has the potential to decrease the need for returns, its use subsequently reduces return-related costs and product markdowns.
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