Using RFID to Improve Inventory Accuracy in Apparel Retailing Industry - Paper Example

Introduction

Inventory accuracy is a prolonged challenge in the retail industry. Retailers maybe focus concentrate on what is known as perpetual inventory; name to depict a gauge of stock, in light of different frameworks and strategies for following items. There is a large gap between perpetual inventory - what administrators believe is available - versus the substantial number of things in a store, either on racks or in a stock room. Attaran (2012, p. 144- 160) claims that different studies have discovered that retailers, for the most part, have exact information data on just 35 percent of their items perpetual inventory. Perpetual inventory can be downplayed or exaggerated. Downplayed, in some cases called concealed stock, implies that ceaseless stock shows fewer items than what is every the store. Alternately, exaggerated, also called phantom inventory, depicts a store in which perpetual stock illustrates more stock than items on hand. Erroneous manual alterations by staff, stolen items, harmed not recorded in that capacity, returned items not legitimately represented, off base shipments from conveyance focuses and clerk mistake are the six noteworthy reasons for stock incorrectness, which can prompt out-of-stock things or overabundance stock. In light of stock incorrectness, frameworks may arrange pointless item or neglect to arrange pieces that are required. It is estimated that a retail shop can make up to a loss of 10% with such flaws in inventory.

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In the current Omni-channel trade domain, consumers remain in charge. They have encompassed social media, operational exploration, and mobile applications, giving them immediate access to products information to help in making a purchasing decision. Customers are controlling a trade atmosphere where quick fashion translates to great speed goods exchange and a considerable figure of stock storage units to be controlled (Loebbecke, Palmer & Huyskens, 2006, p.34). To the supply side, retail manufacture is complicated and international in a range where producers comparable get material and labor from a universal set-up of suppliers. This vibrant retail production calls for better teamwork crossways the supply chain for improved rapidity to market competencies and productivity. Associates in the appeal, fashion, and footwear and location looking for inventory, managed procurement steps to help provide improvement. The purpose of this work is to determine the benefits of RFID in enhancing the accuracy in the record in the apparel retailing industry according to Macy's, Lululemon, and, Uniqlo's case studies.

Macy's Case

Macy's was one of the country's premier Omni-channel traders. On 23 February 2016, the company operates about 870 stores, the region of Columbia. Macy's different workstation comprises of almost 166900 workers (Sen, 2008, p.580). Late 2011, the company got on a three years Omni-channel quality expedition. Searching to improve color, size, and inventory visibility and to keep sales at the great-recognized stage. The shoe company started using EPC endorsed machinery to perform more numerous circle amounts also to improve sample brand loyalty in women's ad as well as men's shoes. Marcy's has cooperated with industry interchange associates in increasing industry finest performs and motivating adoption.

From 2011, the acceptance of RFID has progressed from transformational machinery to a primary obligation aimed at inventory optimization; also, it has developed to all 800 and above Macy's and Bloomingdale's stocks. They stretched out RFID usage from renewal to fashion areas and saw their transactions capacities improve above 200%. In 2014, they finished their single opinion of inventory scheme upgrades. Currently, Macy's has one "view" of a portfolio, that is, accurate inventory over RFID with an emphasis on improving in-stock account to content customer request. By changing to a particular view inventory stood facilitated by leveraging several GS1 values comprising, not limited to GTIN, SSCC-18, EDI, as well as EPC/RFID. Within three years, the results of using RFID were evident, these include: inventory optimization in their Omni-channel contentment procedures, release the latest one GTIN to be sold as an alternative of functioning with inceptions and lowest divisions or places before making it obtainable for trade through their e-com network (Clayman, 2012, p. 1100), RFID was able to sustain 95% item accuracy at the size or color level; this is a significant improvement from 75% and, It was able to increase the selling of shoe sample compliance from 70% representational style to 95% and above, there was an increase in sales development in RFID labeled products classifications also an increase in the high distinct digits ton low paired digits versus the non RFID equivalent control sets, and, both customers and sales experienced increased satisfaction through enhanced in-store accessibility and boosted Omnichannel success.

Uniqlo's Case

Uniqlo clothing retailer in Japan, which offers US $16 Billion, set in the third in the worldwide market, following ZARA and H&M. In February 2017, Uniqlo opened brand new 200,000-square-foot branches over its appropriation distribution center in Tokyo. This task was meant to drive the clothing giant's new procedure to change its plan of action from "Selling what we produced "to "Creating just what we can sell." As portrayed by Tadashi Yanai, the CEO of the organization, the technique symbolized a move from "Made for All" to "Made for You" Wang and Li, 2018, p. 301). through a computerized combination of arranging, producing, and sales. The new branches are intended to encourage such joining by setting its 1,000 representatives from various divisions in a similar workspace-for example finding the majority of the arranging, showcasing, generation, and coordination divisions on the same floor - and interfacing them through a typical computerized platform. RFID attached to Uniqlo retailing shop can offer an active real-time deception of inventory and sales. Exact sales figures, in turn, will assist stores to adjust inbound shipments and exploit the collection of everyday items. Purchasers can locate what they need more efficiently, and inventory space is preserved.

Mr. Yanai, the CEO of the company in one of his press interviews once claimed that digitalization makes segregation of industries not worthy. In such a situation, data can be used as the most vital source that can create a competitive edge for any industry. For apparel industries, the products are data on their own. Uniqlo saw the need to modify its supply chain framework by utilizing digital technology as their approach to overcome the challenge from digital giants. Therefore, from 2016, the company commenced implementing supply chain transformation. It was after realizing that under the old system the company was using to decide the procure material, design, and, manufacture products and deliver them to their branches had a lot of mismatch cases between the client's need and the items, with loss of sales chances and excessive inventories. Nevertheless, since 2017, when the company started to instill RFID label to all their items and to link RFID data to its digital platform, Uniqlo's goal of producing accurate daily sales predictions at each branch and to plan and build its items in real-time will come true.

Lululemon's Case Study

Universal athletic accessories company Lululemon claims that it has improved its in-store income by adopting a radio frequency identification scheme to entice product undertaking as they reach in the stocks, placed on the sales floor for display and later sold out. According to Jonathan Aitken, the CEO, claims that the company's inventory has significantly improved the accuracy of up to 98% because of the system, and it is a reason why the company's income is up (Messinger and Ge, 2018, 50-64), because the stores are aware of the things that are present in the back chamber to be replaced on the trade's floor and bought. The company is capable of accessing RFID established inventory statistics and decide on either to sell the products online or through stores accounted for 8% of e-commerce income for the stores.

Moreover, by adopting RFID, Lululemon attempted to minimize the quantity of time that its store workers spent totaling inventory and increasing stock visibility within each of its branches, hence allowing customers in the stores and online to locate what they need at the position where it ought to be. The system comprises of Tyco Retail Solutions' RFID Sensormatic readers, TrueVUE Enterprise Software, Avery Dennison RFID printers, and tags, Technology Solutions (UK) Ltd. (TSL) handled RFID readers and Zebra Technologies (Motorola Solutions) RFID reader antennas in the back room and RFID handhelds at the point of sale (POS) (Dorman, 2013, 11-13).

Since the company instills RFID up to date, Lululemon has marked over 3.5 million products at its three headquarters and a third- party warehouse. With tags offered by Avery Dennison, its dealers tag another 6.7 million units every year (Thuynsma, I.F., 2016, pp. 8-9). In 2013, the RFID system was introduced to the company as experimental, where the firm researched the technology's efficiency for almost a year. Centered on the pilot's prior success, the project was enlarged to 12 locations in 2014. Launched in April 2015, Lululemon promptly rolled out its RFID-enabled inventory system at all North America and Hong Kong stores in duration of six months, fully implementing in the third year. Currently, RFID is present at all new store openings in North America. Lululemon decided to move forward. The CEO at Tyco Retail Solutions claimed that the move was swift-paced business and the challenge the company has remained with is to maintain customer service and sales-floor replacement because the store employees move very swiftly in the whole day (Chen and Mersereau, 2015, p. 84)

Conclusion

In the field of textile and garments, radio frequency identification is a standout amongst the most encouraging technological developments; it is utilized in manufacturing, stock control, warehousing, conveyance, coordination, programmed product following, and production network the executives. Different retailers and makers of apparel just as buy merchandise, for example, Macy, Uniqlo, and, Lululemon, are presently actualizing the innovation and investigating the effect of the change on their business. RFID innovations may improve the potential advantages of production network the execution through a decrease of stock misfortunes, an increment of the productivity and speed of procedures and improvement of data precision. The essential of achievement lies in understanding the innovation and different highlights to limit the potential issues. Even though the change existed for quite a while, the mechanical difficulties and cost issues are the significant obstacles for the across the board utilization of RFID.

References

Attaran, M., 2012. Critical success factors and challenges of implementing RFID in supply chain management. Journal of supply chain and operations management, 10(1), pp.144-167.Retreved from:

https://www.researchgate.net/profile/Mohsen_Attaran/publication/281331964_Critical_success_factors_and_challenges_of_implementing_RFID_in_supply_chain_management/links/572a36e208ae2efbfdbc1b78.pdf

Chen, L. and Mersereau, A.J., 2015. Analytics for operational visibility in the retail store: The cases of censored demand and inventory record inaccuracy. In Retail Supply Chain Management (pp. 79-112). Springer, Boston, MA. Retrieved from: https://link.springer.com/chapter/10.1007/978-1-4899-7562-1_5

Clayman, H. 2012. U.S. Patent No. 8...