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Hampton Unlocks ROI From RFID

A supplier of locks and lighting to Wal-Mart deploys RFID "at minimal cost" and achieves benefits, including faster invoice payment and the ability to know which goods are lost or stolen.
By Jonathan Collins
RFID tagging has provided Hampton with a far greater visibility of Hampton products at the Wal-Mart’s Sanger DC and at the RFID-enabled stores supplied by that DC. Until now, Hampton has depended on bar codes to identify and track its products. At the time of manufacturing, all of Hampton’s products are put into cases marked with a bar code that includes the products’ stock-keeping unit (SKU) number. The company uses bar code scanners on its conveyor system and also uses hand-held bar codes scanners, depending on the need at the time. The bar codes are read at different places in its warehouse for different reasons, but the most common is to expedite order fulfillment, when the bar code is scanned on each carton to verify the correct product is being added to each shipment.

When its shipments to Wal-Mart used only bar codes, Hampton Products had no visibility into where its products were after they left Hampton Products’ distribution center, except for when they were sold and the point-of-sale (POS) data was shared with the company through Wal-Mart’s Retail Link application, an extranet that the retailer uses to provide suppliers with POS transaction data.

“We used to know when a shipment left our DC and then when products were sold at Wal-Mart from POS data, but we didn’t know what happened in between. Now we have the ability to see when they enter and leave Wal-Mart’s DC, as well as when they enter and leave the back room of the store and when a carton is destroyed,” says Rick Tysdal, chief operating officer at Hampton.

Reader antennas surround a test conveyor in Hampton's facility

Hampton says that it is getting information on the location of its product cartons within 30 minutes of a carton being read by one of the RFID readers installed in a Wal-Mart store. At least 140 Wal-Mart stores have installed RFID readers at the receiving docks at the back of the building, at the doors between the back room and the retail floor, and near the trash compactors where empty cases are discarded. That additional level of detail will eventually help Hampton better understand the flow of its products throughout Wal-Mart stores and distribution centers and ensure that its products are always available in the right quantity to avoid out-of-stocks.

“We are establishing a baseline for inventory from the accumulated data gathered since December, which should allow us to drive up our products in stock,” says Millsap. That inventory baseline will give Hampton Products a far more detailed picture of demand for its products at the RFID-enabled Wal-Mart stores as well as the quantity of products that Hampton will be needed to meet demand efficiently. Further analysis of the data collected through RFID will also help the company determine which goods are lost or stolen as they travel through its supply chain.

But Hampton says it is already seeing other benefits from using RFID. Order reconciliation has been quicker and more straightforward with its RFID-tagged shipments. “We ship 1,000 cartons, and we see almost immediately when Wal-Mart receives all 1,000,” says Tysdal.

That tackles a significant issue for Hampton. Under the existing non-RFID system, Wal-Mart doesn’t record the arrival of about two-tenths of a percent of the cases that Hampton’s believes it has shipped to Wal-Mart. The disputed two-tenths of a percent can, in turn, affect 80 percent of the invoices Hampton sends to Wal-Mart. Those invoices have to be checked and agreed upon before payment can be released. For tagged cases sent to Wal-Mart, however, there has been no discrepancy between the number of cases Hampton claims it ships out and the number of cases Wal-Mart says it receives.

“That’s a positive for everyone--not just us, but Wal-Mart as well--as energy and effort had to be expended on both sides on chargebacks,” says Tysdal.

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