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Italian Study Shows How RFID Can Help Reduce Supermarket Overstocks

The pilot used EPC Gen 2 UHF tags and readers to track the movements of cartons of goods into and out of an Auchan distribution center, to a store, and then to that store's trash compactor.
By Claire Swedberg
Mar 27, 2012Preliminary analysis of the results of a pilot project carried out in Italy shows that the use of EPC Gen 2 passive ultrahigh-frequency (UHF) RFID tags on product cartons can reduce the rate of supermarket out-of-stocks, and improve product freshness.

The project is supported by a consortium of eight Italian businesses, under the leadership of the University of Parma's RFID Lab. The group consists of retailers Auchan, Coop Italia and Conad, as well as goods manufacturers Danone, Lavazza, Nestlè (Buitoni and Purina), Parmacotto and Parmalat.

Antonio Rizzi, head and founder of the University of Parma's RFID Lab
The pilot, completed in September 2011, was designed to assess the value of radio frequency identification within the retail supply chain. Auchan was the only company that played an active role, by testing the technology at its distribution center and stores, while the other participants funded the project, provided consultation and observed the process.

Although specific statistics are not yet available, the University of Parma's researchers concluded that the use of RFID could improve product freshness by reducing the need to overstock shelves. The Parma RFID Lab intends to complete a review of the results, and to then calculate the amount by which out-of-stocks were reduced through the use of RFID, with the goal of publishing its findings later this year. In addition, the group plans to launch another phase of the project with other retailers in the future, in order to compare results against those of the project's recently completed phase.

In 2007, the Parma RFID Lab began working on a project designed to prove the feasibility of using RFID technology and capturing relevant data via readers in the supply chain. The resulting logistics pilot, carried out during the spring and summer of 2008, involved the tracking of 12,000 cases and 800 pallets of sliced ham, sandwiches and other fresh food as the goods moved from production to the retail sales floor. That pilot found a 68 percent drop in the amount of time that workers spent checking inventory as products were shipped from a manufacturer's warehouse, as well as an 80 percent reduction in time required to receive the goods at a retailer's DCs (see Italian Retail Pilot Quantifies RFID's Many Benefits).

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