The benefits that accrue from RFID tags in this industry
The automatic ID system (RFID) has won over the retailers’ use of barcodes in their operations. The effectiveness of radio frequency identification has proven to be very efficient especially in stocktaking. Radio frequency ID is automatic, and cans scan multiple items at the same time such that no physical scanning is required. Through RFID, it is easier to locate all the items needed within a very short time.
The ability of the RIFD tags to contain more information, which can be changed or added, helps companies such as Zara in keeping up records especially when pricing. That implies that, RIFD helps companies in monitoring their sales including what sells best and what remains standstill. The cost of labor is also highly reduced. For instance, considering the speed of the RFID systems and efficiency, few labourers are required to help along with the scanning job.
The downsides of the RFID tags in this industry
Even though RFID systems are dependable, there are drawbacks noted that come along with its operations. For example, acquiring and installing the RFID systems to be used by a corporation is very expensive and could be a challenge to smaller businesses. Besides, scanning more than one item at the same time could create problems if the tags collide.
The collision could result to a breakdown in case many signals are picked up at the same time. Additionally, there are RFID systems that are not able to scan metallic items besides being unable to go through water as they are easily diffused. Therefore, it shows that while scanning of items is automatic, other items are scanned manually to avoid any due damages.
On the other hand, labour reduction is also a disadvantage to the employment seekers. Due to the speed of the systems, only a few personnel are considered necessary to help in the scanning division.
Wal-Mart slowed its use of RFID
Wal-Mart was determined in developing a more efficient electronic based RFID, which could enable companies do all tracking for all their products. Unfortunately, it faced a few challenges before it could fully settle down to use the RFID. For instance, the operation was to be a way of eliminating manual scanning that was used earlier in such operations.
However, doing away with the initial system meant that employees had to be trained on the usage of RFID, which meant incurring additional costs. At the time of this discovery, other technologies had emerged promising the same quality of services. The ‘Arkansas based’ RFID had been announced at the same time with the Wal-Mart’s RFID and had its shortcomings. Their systems (Arkansas) failed to work with metallic items as well as in water.
Conversely, among the items to be tagged by Wal-Mart, there were also products that had slender margins that needed tagging. The tagging operation of these items proved to be much expensive. The products’ approximation of their worth tagging was bound to bring both profit and losses. In addition to the tagging expenses, there were also the maintenance expenses that had to be catered for by Wal-Mart, other inventory groups and tag readers. Bearing these costs seemed to be much of a loss than profitable.
Wal-Mart still faced a great challenge even after the sales spread of RFID. The company experienced technical problems including poor network, which failed to activate. Apart from that, they experienced refrains from suppliers and retailers who lost confidence in their systems. Due to this, Wal-Mart sales never grew despite spending more on the production while everything turned profitless.
The stage that RFID got into named ‘the furrow of disillusionment’ seemed to be the worst given that the required output was mined by the system. The stage almost got RFID stagnated. The only ground that Wal-Mart offered to keep it going was the ability to single-tag items that were being produced in the retail industry. The situation proved tough in that loss continued to add up despite the huge investments made in the industry.