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The Myth of Perfect Read Accuracy

Retailers don't need to read every tag, every time, in order to gain business benefits from RFID. Those who think they do are missing the point—and perhaps a big opportunity.
By Mark Roberti
Consider the fact that retailers don't presently account for stolen goods. The National Retail Security Survey, conducted by the University of Florida, showed that U.S. retailers lost more than $34.3 billion, or 1.4 percent of overall sales, in 2007. Nearly 40 percent of that shrinkage was due to employee theft, 36 percent to shoplifting, 20 percent to administrative error and 6 percent to vendor fraud. These losses are not detected, so companies think their inventory has been stolen, leading to out-of-stocks and lost sales. An RFID system will let you known that these items are not available for sale.

One thing I often hear from folks, like my friend at U-Connect, is that bar codes provide a feedback mechanism—a beep—to let you know you captured data. RFID doesn't do that, they say, so you never know if you've interrogated all of the items to be read. But this isn't quite accurate. Let's say you have five items that have a bar code, and five with an RFID tag. You pick up each bar-coded item and scan its bar code, and you get a beep. Now, you read each RFID tag with a handheld interrogator. You can display the serial number on the screen, so you know each was read. And Motorola's new fixed interrogator has built-in lights that indicate when an item has been read.

What if you have clothing items on a rounder? How do you know you read the RFID tag on each item? That's a good question. There might be 24 items on the rounder, and a handheld interrogator might pick up only 23. But let's say you give an employee a bar-code scanner. How do you know that he or she will not miss an item? People get distracted, and there's no guarantee someone will count every item by hand, or scan every bar code. One benefit of RFID is that you could read the items on the rounder a second time, in less than two minutes, and possibly pick up any missed items. Going through and scanning every bar code again, or counting the items by hand, would take much longer.

The reality is that RFID greatly enhances data accuracy and inventory visibility. The question is not whether the systems can read every tag, every time. The question is: Does RFID deliver a big enough improvement over current data-capture technologies, and an ROI that is compelling enough to make it worth deploying? The answer is yes, according to retailers that have already deployed the technology, as well as analysts, researchers and trade groups that have studied the issues. Focusing on read reliability misses the point, and those who get hung up on this issue could be missing an opportunity to use RFID to dramatically increase inventory accuracy and increase sales.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.

USER COMMENTS

Chris Hook 2009-06-19 08:15:46 AM
People, Process, Technology Mark, You make some excellent points in your Editorial Note. However, you could have expanded your argument to the more general case to state that no data capture system is "perfect", and that your argument is not confined to retail operations; yet the nature and precision of data relating to inventory (count, locations, additional meta-data) continues to increase, and the ease (degree of automation) and accuracy associated with such data capture exercises has improved dramatically this century as a result of multi-faceted technology innovations. Lastly, never forger that there is always an essential need to strike the right balance in the people, process, technology mix that constitutes the implementation of any AIDC solution. What we observe is an increasing reliance on the technology component of this equation, but it would be foolish to ignore the requirement for rigorous processes, both as a matter of routine operations and of course exceptions handling. Best regards, Chris

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