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Benefits and Downsides of RFID
There are a number of benefits that accrue from the use of RFID chips in the fashion retail industry. First, fashion retailers are now able to track their supplies and restock their clothing racks more quickly and effortlessly due to the chips’ capacity to provide great stock visibility. Consequently, retailers in the fashion industry are able to know exactly where each garment is located and what needs to be replenished in real time.
Second, the successful application of the technology has resulted in a marked reduction in the number of employees used to take inventory. This brings substantial costs savings for firms within the industry due to the tags capacity to decrease the dependence on a large team of employees in inventory taking.
Third, fashion retailers within the industry are now able to manage their inventory in record time and hence benefit from the competitive advantage resulting from the firms’ capacity to ensure customer needs and expectations are met in time. Lastly, in the fashion retail industry, the RFID chips can be reused after removal from the items at checkpoint, hence enabling firms to save on costs while achieving the benefits related to effective inventory management.
Although the article fails to expressly state the downsides that may accrue in using the RFID chips in the fashion retail industry, it is evident that RFID systems are undeniably expensive due to their immense reliance on hardware, software, evolving architecture and intense management. This means that the chips may be expensive to deploy in the short-term, but their return on investment (ROI) may indeed be substantial in the long-term due to the noted benefits.
The second downside relates to the rapid shifts in technology. Here, firms often make immense investments in a particular RFID system only for the technology to change or become obsolete, leading to loss. The third downside relates to the amount of time and effort needed to educate and train users in maximising the effectiveness of RFID systems through adoption.
Firms within the industry must make heavy investments in educating and training employees on the effective use of the chips to achieve optimal outcomes in inventory-taking and stock replenishment. The last drawback relates to lack of internationally recognised standards for managing RFID, implying that many international firms within the industry may experience challenges when using RFID across borders.
Wal-Mart and Use of RFID
Wal-Mart, a well-renowned American multinational retail corporation, slowed its use of RFID chips due to a number of reasons related to the effective inventory management in the retailer’s warehouses and stores. Although the article does not go into specifics on why the global retailer scaled down its use of the chips, it is evident that the slowdown was triggered by most of the company’s suppliers who were unable to meet the deadline for the introduction of the information technology infrastructure needed to make radio tagging a success.
Another reason for the slowed use relates to the inability of the system to consistently read and update all the required information in factories, warehouses and stores without resulting in errors that make it difficult for the company to effectively track its inventory. Drawing from this elaboration, therefore, it is evident that Wal-Mart slowed its use of RFID due to supplier concerns, technological deficits, and inability of the chips to achieve 100 percent success in tracking inventory.
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