Lessons From Enterprise RFID Deployments
The use of handheld RFID readers for retail cycle counting and inventory management is exploding — and for good reason. They’re inexpensive, tangible and convenient, and provide a familiar form factor for store associates. However, while handhelds are well suited for initial retail pilots, deploying them in scaled-up enterprise environments requires careful thought and planning.
Part of the issue lies with the fact that handhelds aren’t magic wands. You can’t simply wave them over your entire inventory and expect to achieve optimal results. While it’s true that store associates are comfortable with smartphones and tablets along with their associated apps, handheld inventory applications operate differently. Their success is much more dependent upon the hands of associates that hold them. Furthermore, because untrained temporary or seasonal store associates don’t see the big picture or have the same stake in overall store performance as do store managers, relying solely on what worked in a pilot can be a costly decision.
Given this and other challenges, what options do retailers have to make the most of their RFID investments during enterprise rollouts? Based on observations from scores of retail RFID implementations, here are several tips:
Selling Store Associates on Inventory Management
Face it, whether it takes several minutes each day or many hours once a year, cycle counting isn't a well-liked activity. Most associates treat it as an annoying task that's tolerated at best. As such, they may be tempted to skip over items or mistakenly duplicate others during inventory scans. Since a store associate’s first priority is to assist customers, cycle counting happens in stops and starts, resulting in inaccurate time stamps. Educating associates on the importance of inventory accuracy and providing training for all device users — including temporary and seasonal workers — is an important first step. RFID inventory management also represents a cultural change for store managers, many of whom became successful by running their store their way, regardless of corporate mandates.
Store associates and managers learn better from their peers. One approach that's worked is the use of internal ambassadors. Tech-savvy, outgoing employees early in their tenure are very effective in training other store associates, and reap personal and professional benefits from traveling to other store locations in different towns and regions.
Ensuring Process and Data Compliance
Even if your associates are better trained and motivated, you also need to ensure that inventory management processes are consistent and compliant. Using a task management system to schedule, balance and monitor the workload is generally more effective than expecting store associates to remember that “Wednesday is denim day,” for instance. RFID platforms that provide checks and balances for data compliance both at the store associate level and the store manager level can flag potential errors before submitting inventory counts to the system of record. In addition, if your company relies on inventory counts by thousands of store associates in different locations, it may be a good time to standardize inventory control processes, taking into account variations between store formats, regions and brands.
Enterprise Device Management
Since chainwide deployments may use tens of thousands of handhelds, along with fixed readers, pedestals, beacons and other devices, enterprise device management is key. Are all the devices working properly, and do they have charged batteries? Is device software updated with the latest versions and patches? Are devices uploading information to a common platform that can integrate all store information for an enterprisewide view? Each of these factors is necessary to ensure that retailers have accurate information at the store and enterprise level.
Prioritizing Merchandise Categories
Many retailers experience the 90/10 rule, whereby 10 percent of product categories generate 90 percent of sales. Focusing inventory management in core product categories provides the greatest benefit with the least amount of effort. For example, for some retailers, denim is the most sought out area of the store. If you don’t have a jean’s size and style in stock, a shopper may leave without making a purchase. For a retailer with a four-items-per-average transaction, a missing core product can result in the loss in sale of three or more complementary items.
Managing Inventory Earlier in the Supply Chain
Getting an accurate picture of incoming inventory before it reaches the store can save headaches and costly inaccuracies later. Source tagging at manufacturing sites ensures that accurate information about merchandise is available to you from the moment the goods leave the plant through distribution centers and into your back-room. By waiting to tag merchandise after it arrives at a retail store, you risk accumulated inventory inaccuracies that may be compounded even further before merchandise reaches shelves.
Supplementing Handhelds With Other Form Factors/Technologies
The number of fixed reader infrastructure options has expanded as well in recent years. Some of these include integrating either RFID or RTLS fixed readers into the store design. Whether it’s zone-based RTLS systems or passive RFID readers that include sophisticated algorithms, these devices can eliminate much of the human error. While the price of RFID and RTLS hardware made their use more limited in the past, costs have dropped considerably. In addition, many retailers have discovered that they can mix and match RTLS systems, RFID fixed readers and handhelds at areas such as point of sale, point of exit, between the back-room and sales floor, and in high-risk inventory areas, enabling them to obtain accurate inventory information without relying on handheld cycle counting or supplement store associate inventory counts with more frequent updates.
Recommendations
Since pilots involve smaller volumes of merchandise over short periods of time and generally engage more motivated associates, many of these issues may not emerge until you're in the midst of enterprise rollouts. By then, if you haven’t investigated other approaches, your chainwide implementation may experience growing pains. Therefore, consider ways to educate and motivate employees who will be scanning your inventory. Use automated tools for data and process compliance. Ensure that all devices are functioning optimally, and that data is accurate and consistent before it's rolled up into the system of record. Focus your efforts on the right merchandise — don’t try to boil the ocean. Consider tagging goods at the point of manufacture or at least at distribution centers, so when it arrives at the store, you’re starting with accurate inventory information. And look into the use of fixed reader and zone-based inventory options, which eliminate human error and have become more cost effective.
Experience has shown that if you follow these tips, you can smooth out your road to successful on-shelf availability and omnichannel fulfillment, while enabling store operations to focus on the customer.
Su Doyle manages industry programs at Checkpoint Systems, a global supplier of merchandise availability solutions for the retail industry. Su can be reached at SDoyle@oatsystems.com.
