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RFID Study Quantifies ROI for Apparel Suppliers

University of Arkansas researchers find that by using item-level RFID tags to audit shipments, a garment manufacturer could dramatically improve shipment accuracy, as well as confidence in that accuracy, thereby reducing the incidence of retailer chargebacks.
By Claire Swedberg
VF Jeanswear expects to have deployed a total of about 45 million tags by the end of this year, Craft said. "Confidence level can't be at 100 percent without RFID," he stated. "Tags automate the work with a high accuracy rate and confidence to go with it."

The company is now investigating tag-encoding programs to enable a supplier to print tags on demand itself, at its DCs. "We are considering bulk encoding of tags for products inbound to the U.S.," Craft said, adding that some tagged items are being sent to the two retailers that want apparel items to be tagged, while others receive their garments untagged. As more retailers begin using RFID tags, Craft said he hopes they will focus on a single tag form-factor.

Eventually, Craft said, he expects the tags will be used by the retailer to track goods to the shelf level. In that way, VF Jeanswear would have such information as when an article of clothing was picked up by a customer, how often that garment was moved into a dressing room and when it was sold. "That would help us know what's happening at a retailer level," he explained.

Neville commented that while item-level RFID may provide such future retail benefits as electronic payments, security and customer service features (smart mirrors, for instance), those applications might still be several years from widespread rollout. However, he noted, on a more immediate level, there may be supply chain benefits that could be derived at the manufacturing level, by reducing inspection costs, improving loss prevention and speeding up processing times.

According to Craft, VF believes that RFID deployment "will be most successful when thought of from end to end. It has the potential to help radically improve the performance of the entire supply chain."

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