Each day we are dealing with an information flow, although, there is a lot of information about almost everything i.e, sold products, barcodes, invoices, information from the supplier, prices, customer data, competitors etc. Today’s managers are more Insecure to make certain decisions. They also don’t have enough time to pay attention to these controllable or uncontrollable forces.
During a business process, the way from production to wholesalers and then to retailers is very complicated. After products finally meet the customers, feedback is coming back to the companies and the cycle begins from the start. This product and information flow make business processes very complex because different people i.e, engineers, sales staff, consumers, and managers interfere with this cycle. In this study, our aim is – based on the simple theory of RFID technology to create a simple process model for retailers.
They might be able to serve their customers better and more efficiently if they use RFID tags in their warehouses and stores. Corporations can plan their internal processes more efficiently with the information provided by us, The best RFID solution provider in Dubai, UAE.
RFID Implications and Simplifying the processes
- Reduce: Reducing is the easiest way to achieve simplicity
- Organize: Streamline your organization with the least effort.
- Time: Savings in time feel like simplicity
- Learn Knowledge makes everything simpler
- Differences: Simplicity and complexity need each other
- Usage: RFID tacked products and shelves to reduce unnecessary information.
- Organize: Organizing the sales person more effective so they can have the necessary information about their customers with the help of wireless handheld devices and can read the personalized customer cards.
- Time: Store managers can gather information about stock levels and respond to customer requests faster with RFID-tagged products.
- Learn: Marketing managers and store managers can find out detailed information about products throughout the day.
- Differences: Customers are not all the same; marketers should approach them differently.
- Minimize your Time: RFID allows you to get crucial and accurate customer preferences on time.
Everything from asset management and tracking to manufactured products and related customer services to access controls and automated payments are some of the supported applications of RFID technologies. Also, they can be customized to support a particular business process for an enterprise by using different components and customizations. Depending on the application in industry and the enterprise within an industry, A RFID system can be very complex, and its implementations may vary greatly. Conceptually, the RFID system may be composed of three subsystems as shown in the figure below:
An enterprise subsystem contains computers running specialized software that can store, process, and analyze data acquired from RF subsystem transactions to make the data useful to a supported business process. When information needs to be shared across organizational boundaries an inter-enterprise subsystem should be connected with the enterprise subsystems.
There is an RF subsystem in every RFID system, which consists of tags and readers. An enterprise subsystem usually consists of middleware, analytic systems, and networking services that support the RF subsystem. However, in a supply chain application, a tagged product is tracked throughout its life cycle, from the manufacture to final purchase, and sometimes even afterwards and thus its RFID systems have to share information across organizational boundaries. An inter-enterprise subsystem is also included in RFID systems supporting supply chain applications.
RFID Applications used in different stages of the process
1) Warehouse applications for RFID
RFID can be used for many warehouse inventory management operations, including receiving, storage, packing and shipping procedures. With the RFID system, items can have unique and secure serial numbers and they became so visible in inventory and supply chain operations. As a result of this visibility, several disadvantages can be eliminated, and a wireless system can be implemented more efficiently.
A fixed position or mobile RFID reader automatically identifies pallets when they are unloaded from a truck. A dock door can be fitted with RFID readers mounted in a fixed position. A mobile reader can be designed as a PDA or mounted on a forklift. RFID readers that can be used throughout a facility and require less investment can be more effective. While the RFID system is integrated with Warehouse Management System (WMS), data read from the pallet’s tags are transferred into WMS and updated inventory files. This warehouse process reduces labour needs. If bar codes were being used in this process, all received pallets would have to be scanned by workers and on the contrary RFID, bar codes need clearly visible labels.
Storage; in conventional warehouse systems, different items should be stored in different locations. The RFID reader, on the other hand, is capable of scanning locations and reading RFID tags from virtually anywhere. As a result of this, items do not have to be stored in specific locations. For fast replenishment and picking, many different storage locations can be used.
Picking; when the RFID system integrates with the order management system, the order is checked by the WMS to confirm the picked item belongs to the order.
With RFID readers, the order management system can confirm pallet loads and improve shipping accuracy. An RFID-tagged pallet can be identified as a fixed position RFID reader or a mobile reader. With RFID, the items loaded into the trailer can be automatically checked against the orders placed by the customers.
2) RFID system Applications in retailing
RFID technology can track inventory more accurately in real-time resulting in reduced processing time and labour. There are many applications and possibilities for RFID/EPC as these objects in motion are tracked throughout the supply chain. From the factory floor to warehouses to retail stores, complete visibility into accurate inventory data provides opportunities for improvement and transformation in various supply chain processes. Hospitals and patients, retailers and customers, manufacturers and distributors throughout the supply chain can benefit significantly from RFID technology. During the last decade, several research studies have focused on RFID and its benefits and challenges in the retail sector.
We see that most of the dominant RFID benefits are focused on the lower side of the supply chain. RFID technology can give you accurate information about your inventory levels as it has the ability to provide up-to-minute information on the sales of items. With this accuracy, managers may hold their inventory levels at a minimum and this may cause them to reduce their inventory costs. Also, at the pallet level has the potential to automate the distribution of goods between manufacturing plants warehouses and retail stores of different organizations. This allows companies to cut their costs down from lost/misplaced inventory.
There is evidence which proves a positive ROI for warehouse applications but in our study, we also would like to consider the advantages of in-store applications for store management and customers.
3) In-store applications for RFID
In a retail store, the RFID tag information is generated based on events: A product is leaving a shelf or a product being checked out by a customer at a checkout corner. The tag readers should be deployed on a shelf; these tag readers are responsible for reading RFID tags of items on the shelf. At the time of checkout, the items get read by the tag and generate messages for the host system. After processing these messages the host system informs another partner in the supply chain. In addition, the host system may send some of the RFID transaction data to the enterprise system of the retailer. With the help of a virtual private network, the host system gets connected to the enterprise information system.
Some of the RFID applications which can be used in the retail process
1) Personal digital assistants/smart shelf
Retailers have limited shelf space available. The allocation of scarce shelf space among the stocked items and the choice of items to stock becomes major issues for the retailer. For individual SKUs, these decisions are important determinants of sales and marketing effectiveness. At the aggregate level, shelf allocation is an important factor in the revenue, cost, and eventual profit of a product category. For example, items on the lower shelf usually get less consumer attention than items on the upper shelf.
The goal is to find the shelf arrangement that maximizes profits while meeting the requirements of manufacturers at the same time. Proper shelf optimization results in accurate measurement of the effect of shelf layout on sales and marketing effectiveness.
Retailers are testing the Smart Shelf, where an RFID reader is incorporated into the shelf and stocked with tagged products. It monitors depletion rates, alerts users when stocks run low, and automates reordering to minimize out-of-stocks. Smart shelves can be introduced in an attempt to minimize theft. Because store personnel program the system with store sales data, the system detects behaviour outside the norm and can alert store personnel by transmitting information to a personal digital assistant. By identifying the nature of the stock loss and mapping and addressing points of vulnerability, losses in some stores have been reduced by 70% to 80%.
Advantages to the company with RFID systems: RFID also provides transparency on the sales floor. Items of a similar kind are assigned a specific position on hangers or shelves. This data is saved in the outlet’s database. And your employees can easily have a record of the items on the shelves with Personal Digital Assistants (portable RFID readers) Incorrectly stacked goods could easily be found and reported.
The advantage to the Customers: In-store located RFID readers constantly detect item transponders. Current stock is shown detailed (according to colour and size) on the screen. This way customers can check if desired items are in stock on the hangers or shelves.
2) Check out
Today, staff at the checkout scan the barcodes on items to calculate the total amount purchased and deactivate the EAS (electronic article surveillance).
The advantage to the company with RFID systems: During the payment process, data is removed from the RFID system that operates parallel to the merchandise management system.
The advantage to the Customers: No links are made between the purchased items and personal data – regardless of whether payment is with an EC card or credit card. Customers can ask staff to remove the transponders completely if they wish.
3) Smart mirror
Customers can check on the smart mirror to see if the selected garments fit perfectly. Integrated RFID readers instantly detect the transponders that are fitted to the clothes customers try on. In short, the mirrors in dressing rooms become magic mirrors with a combination of a touch-activated display and cameras, so customers may see what they try on from various angles.
4) Smart dressing rooms
There were also touch screens in the cubicles in the shop. Smart Dressing rooms identify which items customers try on and show product details on the screen. Also, it gives you appropriate tips on accessories and possible combinations. Customers can also access details on suggested items by touching the screen.
5) Handheld reader for salespersons
There are enormous benefits for your store with handheld RFID readers. This device helps your employees to instantly check and list the items in stock and which are out-stock. This is also an enormous advantage for customer service and the availability of goods.
6) Anti-theft system
Advantages to the company with RFID systems: RFID readers were also installed at transition points around escalators and lifts. In the future Metro AG is also planning to use passive RFID transponders.
Cost and benefit analysis of RFID systems in Retailing
Benefits of the RFID systems in various industries (defence, healthcare, entertainment etc.) have been widely discussed, but managers still have some concerns about using this technology, especially for in-store applications.
The advantages of In-store RFID solutions in Dubai are automatic check-out and reducing inventory costs due to efficient shelf replenishment. Another issue is also the reduced losses due to shoplifting. The points for these concerns are:
Tag readers costs, infrastructure costs (hardware and software costs, including the communication network required for RFID implementations)
If the retail store is in a shopping mall, they have to unload their pallets during certain hours, and they can use loading elevators in shopping malls during limited hours. Until the stores open at 10.00 am, all the articles have to be unpacked, tagged, labelled and placed on the store shelves. Therefore with the increase in the item numbers that have been sold in the store, this system could be complicated and costly.
Throughout the theoretical findings, we prefer to make an exploratory study about using RFID technology. In general, exploratory research is appropriate for any problem about which little is known. Exploratory research then becomes the foundation for a good study.
For the new technological systems like RFID, mobile etiquette and printers etc. retailers want the ROI of less than one year. If the ROI time is longer than one year, they prefer not to implement these technologies.
Also, considering the opportunity cost effect many retailers would like to invest this amount into advertising or other short-term investments and gain the information instead of RFID with other cheaper technologies.
For in-store usage, RFID Companies have to work especially on security issues. During the R&D process, they have to work closely with the retailers and store managers in order to find the best solution, which will satisfy the need of each member in the supply chain.
If the retailers would like to implement this technology in their stores, it is appropriate only for stores which receive 100 items (on average) daily, have expensive merchandise and have relative low in-store traffic.
But still, the advantages are really very important. Also, a lot of companies are ready to invest in this technology as soon as the cost of RFID tags decreases. Therefore, to know the best about RFID Solutions in UAE, get in touch with us.