Macy’s has taken advantage of the
RFID movement that has allowed them to improve visibility into the organization. RFID is known as a means for tracking pallets
of product that come into a fulfillment center.
Rather than tracing pallets and boxes, Macy’s has brought RFID to the
store and considers it a method to help better serve their customers. Tracking products in the store allows for
Macy’s to use its stores for potential fulfillment centers for online and phone
orders. Because the cost of this
technology is better and since it is easier to incorporate this type of
tracking into a business, there is more of a reason for other retailers to
incorporate this technology into retail stores. Improving the accuracy of inventory is a main
goal of this system with Macys.
Macy’s senior VP of logistics and operations indicates that “inventory
accuracy deteriorates about 2-3% a month.
At the start of the holiday season in November, most retailers’
inventory is 60 to 70% accurate which means that as retailers go into their
peak season they are the most inaccurate”.
Retailers tend to take inventory
after the holiday season in January and again before spring. Using RFID has allowed Macy’s to take
inventory throughout the year and shows that inventory accuracy could be
maintained at 97%. Macy’s uses this
technology to scan items on the floor, allowing them to know what is being
stored in the back so that it can be brought to the front for sale.
Macy’s is also working on streamlining the RFID process by
implementing this with their suppliers. Since
inventory accuracy has improved greatly by tracking in store, Macy’s feels it
is motivating to their suppliers to invest in the technology since Macy’s is helping
them generate more sales and create more efficiency. The senior VP of logistics and operations
indicates that the cost of the tags outweighs inaccuracy, missed sales, and
margin erosion when managing the inventory and implementing this system.
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