The 7 Benefits of RFID Inventory Management
Radio Frequency Identification (RFID) technologies have evolved from experimental use in the '50s and '60s to commercially available technologies over the past few decades. Today there exist well defined technology standards for commercial use, however high-cost of RFID software and custom implementation has been a road-block for nearly all small and medium size businesses.
Recently there's been a breakthrough in RFID software and technologies that cut the cost of software and implementation by nearly 90%. At Optivity Group, we have partnered with the maker of the only fully integrated off-the-shelf RFID software for Intuit QuickBooks.
There are numerous tangible benefits with optimized RFID software... higher productivity, increased sales opportunities, retention of customers, reduced inventory requirements, and extension of Customer Lifetime Value are just a few. The return on investment (ROI) for many businesses can exceed 300% in the first year of use.
Reduced Working Capital Requirements – Because of increased accuracy with optimized RFID solutions, businesses typically require 10%-20% less inventory on hand to meet their goals. This can translate into huge savings in working capital and free up cash for other important business needs.
Increased Sales – Information is power and quality live data leads to better results. Whether on the phone or in person, when salespeople know precisely what is available to sell, they sell more. Case studies show businesses using RFID typically experience a 1%-10% increase in sales. With trusted inventory counts, salespeople spend less time "checking" and more time with customers. Helping them focus on their "real job" also leads to increased employee satisfaction.
Increased Customer Lifetime Value (CLV) – When customers place an order and later the order cannot be fulfilled due to inventory inaccuracies, it's very likely that the customer will find another source with a competitor and will not return. Your average CLV is an important management concept and it can improve greatly with live, accurate inventory managed with a RFID solution.
Increased Labor Efficiencies – Most businesses experience significant labor savings after investing in RFID. With increased efficiencies, a RFID solution integrated with QuickBooks helps minimize staffing requirements, which can mean big savings.
Reduced Inventory Shrinkage – Most businesses experience a 50%-70% reduction in inventory shrinkage after switching to RFID inventory management. Most shrinkage comes from internal theft or breakage and inappropriate disposal, which typically stops after deployment because employees are aware things are being tracked live.
Improved Management Decisions – Better information leads to fewer out of stock issues, and fewer bad management decisions arising from inventory distortions. Even merchandising improves. With RFID technologies in place, the number of SKUs per square foot can be increased by 10%-50% with a more accurate understanding of what is on the floor, deploying thinner stocks and replenishing more frequently.
Reduced Audit Costs – Businesses where audits are required typically save $3,000-$30,000 per year in audit fees per location because RFID counts are considered more accurate (99%) than physical counts. The complexity required to conduct an audit is substantially reduced, and many businesses are able to decrease or eliminate audit requirements altogether.
What will be Your Benefits and ROI with RFID?
Learn more today!
Call for a discussion about your business and RFID opportunities.
We'll provide you with a no-cost report from our special Return On Investment Modeler.
Every day that you delay results in non-recoverable opportunity loss.