Inventory Management through RFID

(Published in The Express Tribune, September 20, 2010)

Without bar codes it would be near impossible to track in-store inventory, checkout lines would be a nightmare and product management would be severely handicapped. Bar codes, however, are not without their shortcomings.

Checkout queues

Long checkout queues are not only bad for customer experience but also bad for business as the process is nearly not as efficient as it could be. Retail stores work around this by providing express checkout lines for customers with fewer items to reduce their frustration and expedite the procedure.

More often than not, retail stores will also invest in multiple tills and checkout personnel. In fact, in the US and Europe there is a rising trend towards self-checkout counters where customers scan and bag their own goods while a single supervisor keeps an eye out or provides assistance, if required.

RFID

RFID or Radio Frequency Identification tags are like barcodes, but with one major difference. They do not need to be scanned by a laser gun. Instead, they operate like bluetooth devices and can be detected from up to a few feet away.

This means that the contents of an entire shopping cart can be read all at once using a RFID scanner. Not only does this solve the problem of long checkout queues but it also paves way for further innovation.

RFID has been useful in tracking livestock where a scanner installed at barn gates can automatically keep track of cattle going in and out along with identifying and profiling each one.

Walmart uses RFID to great success for its supply-chain and warehousing since the contents of an entire carton can be scanned without ever needing to open it up. It also becomes much simpler to locate goods within a warehouse by sniffing around for the correct RFID signal.

Similarly, in retail stores, tags make it possible to perform a complete inventory check in one pass around the store, reading tags on all products. It also becomes possible to tally up the total value of inventory in a store, finding misplaced goods that ended up in the wrong section or fell behind shelves.

RFID chips are continuing to become cheaper and more secure. Korea is promising RFID tags that can be printed using magnetic dyes and carbon nanotubes at a cost of 3 cents per tag – a price that still does not make the technology feasible for smaller items but the trajectory does look promising.