Cost reduction
The cost reduction value case is a
target area of many consumer packaged
goods (CPG) companies, retailers and the
United States Department of Defense (DoD).
These enterprises expect to reduce
inventory and inventory management
expenses by billions of dollars over the
next several years.
Examples of cost-reduction objectives
for an RFID program include:
- Lower inventory stock levels
- Reduce waste
- Reduce manual checks
- Reduce inventory handling costs
- Reduce logistics costs
- Reduce claims and deductions
- Improve asset utilization
Increase
revenue
Both large and small retailers and
manufacturers are developing RFID
deployments to drive sales. The
utilization of RFID empowers these
companies to design innovative solutions
with tangible benefits, including:
- Reduced out-of-stocks
- Improved order fill rates
- Reduced shrinkage
- Improved inventory turns
- Enhanced in-store customer
support
Counterfeit
product shielding
Quality manufacturers across the
globe are losing sales, profits and
their quality image from the expanding
flow of counterfeit products. Equally
important, counterfeits of many products
(such as pharmaceuticals, currency,
passports and aircraft parts) represent
a safety and security hazard for
customers across the globe. There are
several pilots in place to identify
counterfeits using RFID. These RFID
tagged products, coupled with real-time
databases, represent a viable
information platform to prevent the
distribution and sale of counterfeit
products.
Shrinkage,
theft and diversion prevention
High-value consumer and industrial
products face the large risk of theft
and diversion. RFID has shown
considerable progress in:
- Identifying theft and diversion
at the shelf level
- Identifying theft and diversion
points in the supply chain
As the price points of RFID products
decline, this technology will provide a
widely used tool to prevent theft along
the supply chain-from the factory floor
to the storefront.
Competitive
advantage
Any business case or profit
improvement program is intertwined with
a company's business goals and
competitive advantage. Understanding
competitive advantage can be reduced to
a simple question: are we better than
our peers in key performance areas?
Several leading companies believe that
RFID is the key to increasing
competitive advantage. Sources of
advantages include:
- To increase distribution center
productivity
- To increase yield per end user,
customer or site
- To create a flexible, adaptive
supply chain
- To create a cost advantage in
logistics
- To reduce the impact on prices
of recycling legislation for
electronics
- To reduce the impact of homeland
security measures (e.g., country of
origin)
- To target an additional point of
margin by 2007
