RFID tags on every single item in stock? You must be crazy!

Sure, slapping RFID tags on pallets or even crates has been shown to save time and money in supply chains for a variety of industries. Then there’s your Wal-Marts and other big box businesses that might get even a little more mileage out of the tags and readers.

But until now, cost has been a big factor in implementing RFID on a per-unit level. One major national retailer — American Apparel Inc. — has changed all that. For that business, it’s now worth the investment to buy the equipment and spend the time tagging every item.

Why? It’s all in the name of inventory accuracy. Many items look alike and are easily confused by employees. That means a lot of product ends up where it’s not supposed to be — which takes a lot of time to rectify.

But RFID is easier to implement and less costly than it was even a couple of years ago.  The payoff? For this business, inventory accuracy jumped from 80% to 99%. A lot of companies would be willing to spend a little extra if it meant getting those numbers.

Tags: accuracy, RFID, supply chain