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RFID Chip-Based Serialization for Retail

Posted March 23, 2012

An alternative to IT solutions for managing item-level tagging

Item-level radio frequency identification (RFID) using standard Electronic Product Codes (EPCs) is rapidly becoming a key factor in improving retail inventory management. The main driver for adoption is quite simple—taking inventory with RFID is 25 times faster than with bar codes. RFID is faster for two reasons. First, it does not require line of sight access to the tag. Second, the person operating the reader does not have to ensure that they only scanned each tag once.

The key difference is that RFID uses radio waves to count large numbers of tags simultaneously, even if a stack of garments covers the tags or if they are inside a box. During the inventory process, readers often scan each tag several times. For this reason, accurate counts are only possible if each tag carries a unique serial number. In addition to rapid counting, serialization enables the tracking and tracing of individual items throughout the product lifecycle—an additional benefit for some product categories.

As major retailers like Walmart, J. C. Penney, and Macy’s roll out item-level RFID, brand owners must find a low-cost, reliable way to implement serialization. Because serialization is new for most apparel suppliers, it has the potential to be disruptive to existing packaging and labeling business processes. Chip-based serialization is a way to avoid disruption by IT projects, constrained supply chains, and extra serialization costs.

Serialization can be regarded as an IT problem that requires an enterprise software solution to allocate and distribute serial numbers, but it doesn’t have to be. Chip-based serialization is a non-IT alternative that preserves sourcing flexibility and uses the existing business process for tagging and ticketing. To help retailers understand serialization, this paper overviews EPC concepts for item-level RFID, reviews IT-based approaches to serialization, and introduces chip-based serialization as an attractive solution.

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