Debunking Myths about RFID

RFID, or Radio-Frequency Identification, is more than just a fancy term. It’s a tech revolution that’s transforming the retail world. RFID can improve every aspect of your business, from inventory management to customer experience, and it’s taking charge to save you significant costs. With its ability to streamline operations, optimise store layouts, and enhance efficiency, no wonder we talk about it so much!
In this blog, we’ll debunk some of the myths that might be holding you back, and explore how RFID, for a start, can save your business money by eliminating inaccuracies.

First off, we wanted to talk about some myths.

Debunking 5 RFID Myths for Small Businesses: Despite its proven benefits, many small business owners still hold misconceptions about RFID technology. Let’s break down five common myths that could be preventing you from harnessing its full potential:

1 .RFID is expensive: While initial setup costs may seem like a significant commitment, RFID technology is more affordable than ever. The return on investment is clear: by reducing stock errors, reducing stocktaking costs, and increasing operational efficiency, RFID quickly pays for itself.

2. RFID is too complex to implement: RFID systems have become increasingly user-friendly, and they can be easily integrated into existing business operations provided your ERP system is up to date. RFID solutions can be tailored to fit the specific needs of each business.

3. RFID only benefits large retailers: RFID is scalable and can be adapted for a range of businesses that often benefit greatly from RFID’s ability to streamline processes and reduce operational inefficiencies that are harder to manage manually. Vertically integrated businesses stand to gain the most from RFID, when stock can be tagged and tracked through from the point of manufacture.

4. RFID isn’t secure: Many believe that RFID tags are vulnerable to theft or tampering, but modern RFID systems feature encryption and security measures to protect against unauthorized access and ensure product authenticity.

5. RFID is just for inventory management: While RFID is widely used in inventory management, its applications go far beyond that. It can enhance customer experiences, streamline the checkout process, improve product tracking, enhance store security and offer valuable insights into sales trends.

Let’s focus on the biggie though, if you haven’t adopted RFID yet, think about starting with Inventory Management, and here’s why… 

Inventory inaccuracies are one of the most significant hidden costs retailers face today. These errors, whether from stockouts, overstocks, or shrinkage, can dramatically impact a business’s bottom line. But there’s a smarter way to do it – RFID technology is stepping in to take charge and tackle these issues head-on. From large retailers to small businesses, RFID is revolutionizing how inventory is managed, offering real-time tracking and reducing human error. Yet, many small business owners are hesitant to adopt this technology due to misconceptions about its complexity and cost.

The Hidden Costs of Inventory Inaccuracies: The costs associated with inaccurate inventory can be staggering. Stockouts, for example, result in missed sales opportunities and lost customer trust, while overstocks tie up capital and take up valuable store space. Additionally, inaccurate inventory records can lead to increased labor costs as employees spend unnecessary time on manual checks or fixing errors. All of these inefficiencies contribute to the “hidden costs” of inaccuracies that erode your profits.

Let’s put it into layman terms: Ever wished you could wave a magic wand and instantly stock-take the piles of boxes sitting by the check out counter in your beautiful store? Instead of paying your employees to go through receipting one item at a time, RFID gives you the ability to wave that magic wand, and in seconds entire shipments are allocated and ready to be put on the shelves!

According to studies, retailers using RFID tags have up to 13% more accurate stock levels than those relying on manual counts⁵. By automating the inventory process, RFID provides real-time visibility into stock levels, drastically reducing errors caused by manual entry. This improved accuracy means you can make better stock management decisions, avoid stockouts, reduce shrinkage, and ultimately improve your profitability.

A Real NZ Success Story

One New Zealand business utilizing RFID technology is EastPack, a kiwifruit packing and cool storage company.

EastPack’s RFID Implementation

EastPack is a significant player in the New Zealand kiwifruit industry, responsible for packing and storing kiwifruit for various growers. The company faced challenges related to inventory management, particularly in tracking the movement and storage conditions of their products.

EastPack’s Approach:

• EastPack implemented RFID technology to automate their inventory processes.
• Each kiwifruit pallet is tagged with RFID labels, allowing for real-time tracking throughout the supply chain.
• The system uses forklift-mounted RFID readers and cameras to record pallet identity, movement, and specific locations. Ceiling-mounted visual markers are used to determine precise locations1¹

Outcome:

• The implementation led to improved visibility of inventory levels and locations.
• RFID technology allowed EastPack to monitor the storage conditions of kiwifruit, ensuring optimal quality control.
• The system achieved an accuracy rate exceeding 95% for data capture, with pallets identified to within 20cm of their exact locations³.
• EastPack saw large, early efficiency gains in storage and retrieval of fruit, and improved capacity to deliver on shipment requests¹.
• The implementation contributed to a 28% cost saving in the company’s processes and plant operations over four years¹.
• This was New Zealand’s first significant commercial roll-out of EPC/RFID and possibly the first whole-of-operation use of the technology in the Asia-Pacific region¹³.

Reaping the Benefits:

1. Increased Efficiency: By automating inventory tracking, EastPack reduced the time spent on manual counts and improved operational workflows.
2. Enhanced Traceability: RFID provided real-time data on the location and condition of kiwifruit, which is crucial for maintaining quality standards and compliance with food safety regulations.
3. Reduced Waste: With better tracking of inventory, EastPack could minimize spoilage and waste by ensuring that products were moved and sold in a timely manner.
4. Data-Driven Decision Making: The data collected through RFID allowed EastPack to make informed decisions regarding inventory management, leading to better planning and forecasting.
5. Improved Customer Satisfaction: By ensuring that high-quality kiwifruit was consistently available, EastPack enhanced its reputation among growers and customers alike.

EastPack is leading the charge in RFID adoption for the food industry, illustrating how New Zealand businesses can leverage RFID technology to overcome operational challenges, improve efficiency, and enhance product quality in the competitive agricultural sector.

RFID’s flexibility means a solution like EastPack’s can be developed for most product businesses. Talk to our Vitag team today to see if RFID can support you to greater efficiency, profitability, and smoother operations.