How Does RFID Assist With Inventory Tracking?

Please explain how this is accomplished.

—Name withheld

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There are two ways in which radio frequency identification assists with inventory tracking. One is by providing a faster, more accurate way of counting items, while the second is by providing an automated way of recording the movement of inventory from one area or facility to another. Let me use an apparel store as an example.

It is possible to take inventory of both the front and back of a store by reading the bar codes on every item. According to the RFID Research Center, which performed time and motion studies on inventory counting, it takes a single person an hour to scan 650 items using a bar-code scanner. With a handheld RFID reader, that same individual could count 18,000 items. So for a store containing 90,000 items, it would take a person nearly 140 hours to conduct an inventory count with a bar-code scanner, versus about five hours to take inventory via an RFID reader.

What this means is that you can take inventory of your store once a week and pay five hours of extra labor cost, versus 140 hours of additional weekly labor. That means it is far more economically feasible to count inventory more often and have more accurate inventory data, which leads to improved replenishment and greater sales as customers find the items they want, when they want them. RFID is also more accurate, according to the RFID Research Center. Immediately after a full inventory count, store inventory is typically only about 85 percent accurate, meaning there is about a 15 percent error rate in the counting process. With RFID, accuracy is about 97 percent.

Additionally, RFID readers can be set up between the back and front of a store, as well as at the receiving bay. So when items arrive, they are read instantly and added to inventory without staff members having to do anything. When an item is brought from the back of the store to the front, the tag can be read by a reader automatically and inventory can be updated to show the item is on the sales floor, versus in storage.

Apparel items are particularly RF-friendly, so it is very easy to utilize RFID to track and manage inventory. But the process is similar with many other items. We have published several articles about companies tracking inventory or airplane parts, finished sheets of glass, slabs of granite, rolls of steel and other items.

—Mark Roberti, Founder and Editor, RFID Journal