MANAGING A RETAIL FASHION PRODUCT WITH RFID-ENABLED INVENTORY VISIBILITY

Year 2019, Volume: 8 Issue: 2, 796 - 809, 31.07.2019

Özgen Karaer

https://doi.org/10.28948/ngumuh.598174

Abstract

   One of the main promises of Radio Frequency Identification Technology
(RFID) is reduction in inventory record inaccuracy at retail stores, and thus
to help achieve inventory visibility in the system. In this paper, we investigate
the impact of RFID-enabled inventory visibility for a retailer that sells
fashion merchandise, such as trendy apparel. Because the retailer already
commits to a total quantity for the item before the season begins, an increase
in sales cannot be expected. Here, we formulate the value of inventory
visibility as an increase in revenue generated from the product. We
characterize the components of this impact and how it changes with respect to
the retailer and product characteristics. We also consider the possibility of
imperfect performance of an enabler technology like RFID, and analyze how it
affects the ROI of the technology.

Keywords

Retail, inventory, fashion, perishable, imperfect read rate, RFID

Thanks

This research was funded in part by METU BAP #BAP-08-11-2012-124. The authors thank seminar participants at the 2014 IFORS Meeting in Barcelona, Spain, 2014 ISIR Symposium in Budapest, Hungary, and ICORES Meeting in Lisbon, Portugal, 2015 for their valuable comments. An earlier version of this work was in proceedings of the ICORES 2015 Conference.

RFID İLE SAĞLANMIŞ ENVANTER GÖRÜNÜRLÜĞÜ İLE MODA PERAKENDE ÜRÜNÜ YÖNETİMİ

Abstract

   Radio Frequency Identification (RFID)
teknolojisinin sanayiye sunduğu başlıca değerlerden biri envanter
kayıtlarındaki stokla gerçek envanter durumu arasındaki tutarsızlığı yok
etmesi, bu şekilde de sistemde envanter görünürlüğünün elde edilmesini
sağlamaktır. Bu makalede, hazır giyim gibi moda tarzı ürün satan bir perakendeci
için RFID ile sağlanmış envanter görünürlüğünün etkisi irdelenmiştir. Satış
sezonu başlamadan perakendeci toplam sipariş miktarını sabitlemiş olduğundan
RFID kullanımı satışlarda bir artışa neden olamayacaktır. Bu durumda, erişilen
envanter görünürlüğünün etkisi üründen elde edilen toplam gelirdeki artış
olarak formüle edilmiştir. Bu etkinin bileşenleri tanımlanmıştır ve perakendeci
ve ürün özelliklerine göre etkinin nasıl değiştiği nitelendirilmiştir. Ayrıca
RFID teknolojisinin kusurlu performans göstermesi de göz önüne alınmıştır ve bu
kusurlu performansın teknolojinin getirisine etkisi incelenmiştir.

Keywords

Perakende, envanter, RFID, moda, ölümlü, kusurlu okuma oranı

References

• [1] STAFF, “The best thing since the bar-code”, www.economist.com, 2003. (erişim tarihi 07.05.2017)
• [2] BERNARDERS, W., “RFID Is the Solution for Omnichannel Sales”, www.rfidjournal.com, 2017. (erişim tarihi 07.05.2017)
• [3] PRINCE, N., “Prime Vision to Offer RFID-enabled Packaging System”, www.rfidjournal.com, 2017. (erişim tarihi 07.05.2017)
• [4] SWEDBERG, C., “Russian Tag Company Reaches for a Worldwide Audience”,
• [5] www.rfidjournal.com, 2013. (erişim tarihi 07.05.2017)
• [6] SWEDBERG, C., “Polish Retail Chain Keeps Food Cool With RFID”, www.rfidjournal.com, 2017. (erişim tarihi 07.05.2017)
• [7] ZAINO, J., “The New ‘It’ Tool for Branding Products and Services”, www.rfidjournal.com, 2013. (erişim tarihi 07.05.2017)
• [8] DEHORATIUS, N., MERSERAU, A.J., SCHRAGE, L., “Retail Inventory Management When Records are Inaccurate”, Manufacturing & Service Operations Management 10 (2), 257-277, 2008.
• [9] DEHORATIUS, N., RAMAN, A., “Inventory Record Inaccuracy: An Empirical Analysis”, Management Science 54, 2008.
• [10] KANG, Y., GERSHWIN, S. B., “Information Inaccuracy in Inventory Systems: Stock Loss and Stockout”, IIE Transactions 37, 2005.
• [11] HARDGRAVE, B.C., ALOYSIUS, J.A., GOYAL, S., “RFID-Enabled Visibility and Retail Inventory Record Inaccruacy: Experiments in the Field”, Production and Operations Management 22 (4), 843-856, 2013.
• [12] HAND L., Hand, L., “RFID for Better Store Level Inventory Replenishment (and other Retail Use Cases)”, IDC Retail Insights (www.idc-community.com), 2012. (erişim tarihi 07.05.2017)
• [13] STAFF, “Macy's, Inc. to Accelerate Adoption of RFID Technology”, Macy's, Inc. Press Release
• [14] (www.macysinc.com), 2011. (erişim tarihi 07.05.2017)
• [15] LOEB, W., “Macy's Wins with Technology”, www.forbes.com, 2012. (erişim tarihi 07.05.2017)
• [16] ROBERTI, M., “Wal-Mart Relaunches EPC RFID Effort, Starting With Men's Jeans and Basics”, www.rfidjournal.com, 2010. (erişim tarihi 07.05.2017)
• [17] O`MARAH, K., “Blockchain for Supply Chain: Enormous Potential Down the Road”,
• [18] www.scmworld.com, 2017. (erişim tarihi 07.05.2017)
• [19] FOX, J., “Your Clothes Will Be on the Radio”, www.bloomberg.com, 2017. (erişim tarihi 07.05.2017)
• [20] TAYLOR, G., “Macy's RFID Rollout Improves Inventory Accuracy, Display Compliance”, www.retailtouchpoints.com, 2017. (erişim tarihi 07.05.2017)
• [21] SWEDBERG, C., “EECC Tests Find Big Performance Differences for Tags Read in Bulk”,
• [22] www.rfidjournal.com, 2010. (erişim tarihi 07.05.2017)
• [23] SWEDBERG, C., “EPCglobal US Survey Finds Strong RFID Foundation in CPG Sector”,
• [24] www.rfidjournal.com, 2010. (erişim tarihi 07.05.2017)
• [25] PIQUE, S., 2012, “The Truth About RFID Read Rates”, www.rfidjournal.com, 2012. (erişim tarihi 07.05.2017)
• [26] MERSERAU, A. J., “Information-Sensitive Replenishment when Inventory Records are Inaccurate”, Production and Operations Management 22 (4), 2013.
• [27] KÖK, A. G., SHANG, K. H., “Inspection and Replenishment Policies for Systems with Inventory Record Inaccuracy”, Manufacturing & Service Operations Management 9 (2), 185-205, 2007.
• [28] FLEISCH, E., TELLKAMP, C., “Inventory Inaccuracy and Supply Chain Performance: A Simulation Study of a Retail Supply Chain”, International Journal of Production Economics 95, 2005.
• [29] LEE, H. L., ÖZER, Ö., “Unlocking the Value of RFID”, Production and Operations Management 16 (1), 40-64, 2007.
• [30] KARAER, Ö., LEE, H. L., “Managing the Reverse Channel with RFID-Enabled Negative Demand Information”, Production and Operations Management 16 (5), 625-645, 2007.
• [31] GAUKLER, G. M., ÖZER, Ö., HAUSMAN, W. H., “Order Progress Information: Improved Dynamic Emergency Ordering Policies”, Production and Operations Management 17 (6), 599-613, 2008.
• [32] DE KOK, A. G., DONSELAAR, K. H. V., WOENSEL, T. V., “A Break-even Analysis of RFID Technology for Inventory Sensitive to Shrinkage”, International Journal of Production Economics 112, 2008.
• [33] ŞAHIN, E., BUZACOTT, J., DALLERY, Y., “Analysis of a Newsvendor Which Has Errors in Inventory Data Records”, European Journal of Operational Research 188, 2008.
• [34] REKIK, Y., SAHIN, E., DALLERY, Y., “Inventory Inaccuracy in Retail Stores due to Theft: An Analysis of the Benefits of RFID”, International Journal of Production Economics 118, 2009.
• [35] ÇAKICI, O. E., GROENEVELT, H., SEIDMANN, A., “Using RFID for the Management of Pharmaceutical Inventory - System Optimization and Shrinkage Control”, Decision Support Systems 51, 2011.
• [36] FAN, T., CHANG, X., GU, C., YI, J., DENG, S., “Benefits of RFID Technology for Reducing Inventory Shrinkage”, International Journal of Production Economics 147, 2014.
• [37] REKIK, Y., JEMAI, Z., ŞAHIN, E., DALLERY, Y., “Improving the Performance of Retail Stores Subject to Execution Errors: Coordination versus RFID Technology”, OR Spektrum 29, 2007.
• [38] REKIK, Y., ŞAHIN, E., DALLERY, Y., “Analysis of the Impact of RFID Technology on Reducing Product Misplacement Errors at Retail Stores”, International Journal of Production Economics 112, 2008.
• [39] KETZENBERG, M. E., GEISMAR, N., METTERS, R., VAN DER LAAN, E., “The Value of Information for Managing Retail Inventory Remotely”, Production and Operations Management 22 (4), 811-825, 2013.
• [40] BALLESTIN, F., PEREZ, A., LINO, P., QUINTANILLA, S., VALLS, V., “Static and Dynamic Policies with RFID for the Scheduling of Retrieval and Storage Warehouse Operations”, Computers & Industrial Engineering 66, 2013.
• [41] WEI, J., LEUNG, S. C., “A Simulation Modeling and Analysis for RFID-enabled Mixed-product Loading Strategy for Outbound Logistics: A Case Study”, Computers & Industrial Engineering 61, 2011.
• [42] CONDEA, C., THIESSE, F., FLEISCH, E., “RFID-Enabled Shelf Replenishment with Backroom Monitoring in Retail Stores”, Decision Support Systems 52, 2012.
• [43] METZGER, C., THIESSE, F., GERSHWIN, S., FLEISCH, E., “The Impact of False-Negative Reads on the Performance of RFID-based Shelf Inventory Control Policies”, Computers & Operations Research 40, 2013.
• [44] THIESSE, F., BUCKEL, T., “A Comparison of RFID-based Shelf Replenishment Policies in Retail Stores under Suboptimal Read Rates”, International Journal of Production Economics 159, 2015.
• [45] PIRAMITHU, S., ZHOU, W., “RFID and Perishable Inventory Management with Shelf-space and Freshness Dependent Demand”, International Journal of Production Economics 144, 2013.
• [46] GRUNOW, M., PIRAMITHU, S., “RFID in Highly Perishable Food Supply Chains - Remaining Shelf Life To Supplant Expiry Date?”, International Journal of Production Economics 146, 2013.
• [47] KULL, T. J., BARRATT, M., SODERO, A. C., RABINOVICH, E., “Investigating the Effects of Daily Inventory Record Inaccuracy in Multichannel Retailing”, Journal of Business Logistics 34 (3), 189-208, 2013.
• [48] GAUKLER, G. M., SEIFERT, R. W., HAUSMAN, W. H., “Item-level RFID in the Retail Supply Chain”, Production and Operations Management 16 (1), 65-76, 2007.
• [49] ÇAMDERELI, A. Z., SWAMINATHAN, J. M., “Misplaced Inventory and Radio-Frequency (RFID) Technology: Information and Coordination”, Production and Operations Management 19 (1), 1-18, 2010.
• [50] HEESE, H. S., “Inventory Record Inaccuracy, Double Marginalization, and RFID Adoption”, Production and Operations Management 56 (2), 343-355, 2007.
• [51] WHANG, S., “Timing of RFID Adoption in a Supply Chain”, Management Science 56 (2), 343- 355, 2010.
• [52] LEE, I., LEE, B., “Measuring the Value of RFID Investment: Focusing on RFID Budget Allocation”, IEEE Transactions on Engineering Management 59 (4), 551-559, 2012.
• [53] SARAÇ, A., ABSI, N., DAUZERE-PERES, S., “A Literature Review on the Impact of RFID Technologies on Supply Chain Management”, International Journal of Production Economics 128, 2010.