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Focus Shifts to Item-Level Tracking

Some clear trends in RFID deployment emerged in 2010—one of the biggest was the shift toward tracking individual items.
By Mark Roberti
Feb 01, 2011—A few years ago, most analysts insisted radio frequency identification was too expensive to be used to track individual items. With most passive ultrahigh-frequency tags selling for at least 25 cents each and high-frequency tags for even more, they said it would be impossible to achieve a return on investment from tracking unique items. But as tag costs came down, performance improved and companies learned how to achieve the most value from RFID, it became clear that tracking individual items delivered the most bang for the buck.

The Aberdeen Group finds that 57 percent of retailers using or planning to deploy RFID prefer to employ the technology at the item level, and that many are using the technology to improve inventory accuracy, as well as for other applications. Apparel retailers are aggressively pursuing RFID use at the item level. In July, Wal-Mart announced it had shifted its RFID focus from tagging all pallets and cases to working with suppliers to tag individual jeans and men's basics, to improve inventory management. The retailer said it planned to expand the program to other categories with complex inventories.

Photo: iStockphoto

And unlike Wal-Mart's previous efforts to track consumer packaged goods, this time it has the support of other retailers. Dillard's, Jones Apparel, Macy's and JCPenney all have joined an industry initiative—launched by Voluntary Interindustry Commerce Solutions (VICS), and standards groups GS1 Canada and GS1 US—to provide recommendations for EPC RFID tagging at the item level, to be used by retailers and their suppliers.

But the trend toward item-level tracking goes well beyond apparel retail. The Diablo Canyon Power Site, a nuclear power plant owned by West Coast utility Pacific Gas and Electric (PG&E), has attached EPC Gen 2 tags to tens of thousands of reactor parts at its warehouse, to document their locations and maintenance status. The facility has increased inventory accuracy, reduced the time employees spend taking inventory of its warehouse from 2,000 labor hours to 300, and decreased the time workers spend searching for missing items from several days to a few minutes.

Finnish furniture manufacturer Martela is attaching passive EPC Gen 2 RFID tags to desks, chairs and other pieces sold for use in office buildings, schools, hotels and other institutions, to help it better manage those products through their life cycle. As an added service, Martela returns to a client's site on a regular basis to inventory the furniture, which in some cases is required for compliance with government regulations, or so the company can track its assets for internal purposes.

Solid Comfort, a U.S.-based furniture manufacturer, is also using RFID to track individual items it produces. The system addressed two challenges—locating each piece of furniture in the company's 100,000-square-foot warehouse in Fargo, N.D., and tracking when and where orders are shipped. The RFID system replaced a manual one that required two full-time workers, and it reduced shipment errors.
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