Managing The Reverse Flow: Speeding Recalls and Returns with Radio Frequency Identification

Overview

From a strategic perspective, we increasingly live in what could be termed a “Google Earth” world. To draw upon this analogy, just think how much our lives have been transformed by the power of information. A decade or so ago, if we were looking for a specific address in an unfamiliar area, how would we find it? Well, it would most certainly be done in a low-tech manner, by asking for directions or stopping at a gas station or a convenience store to ask for help.

Five years ago, we began to use Map-Quest and – to a lesser extent – other web-based navigation tools. This made it possible to leave our homes with a print-out that had complete, turn-by-turn directions from any point A to any point B. We then began to see in-car navigation systems like On-Star come of age, providing us graphical directions and even voice prompts telling us what road to take and where to exit, turn, and stop. Today, we can sit at our desktop or view a laptop propped on the passenger seat to use Google Earth and view incredibly detailed photos from the sky of exactly what we will see on the ground, enabling us to zoom in on the exact parking space of the building at the address we are heading to. Thus, for anywhere we could physically wish to go on the planet – from Boise to Baghdad – we can now expect to have incredible visibility and real-time information. We expect – and demand – to be able to instantly find the proverbial “needle in the haystack” anywhere, anytime.

RFID and the Retail Supply Chain

The same is becoming true – and necessary – in today’s retail supply chains. With the global supply chains necessary to stock Target’s store shelves in Wichita Falls or Walgreen’s in Memphis stretching back to Hong Kong, Managua and other far-flung locales, major retailers must seek to have global business intelligence systems in place, managing movements of goods from manufacturer through shipment to their distribution center, to the stock room, to the store shelf through checkout. But bar codes present a crucial limitation: whereas they can only identify a class of items – a type of box of cereal for example – RFID can uniquely identify the specific box of that cereal that you are holding at the moment or the dozen on the store shelf in front of you. The promise of RFID in retail is to provide ROI through increased sales, increased inventory availability, reduced stock-outs and labor cost savings and the ultimate “retail nirvana” – still probably a decade or so away – where every item is tagged with RFID and “smart stores” promise interactive shelves and “roll through” checkouts. All this is made possible through the increased visibility that RFID brings and the imagination to use this data to better manage retail operations.