Whenever organizations test out a new technology there is inevitably a lot of trial and error involved. But an ongoing project at Canada-based Staples Business Depot is proving to be that rarest of technology initiatives: a trial without error, at least as far as one of the key deliverables is concerned.
For the past year and a half, the office products retailer has been piloting a real-time inventory tracking system based on Active RFID tags. These tags use a battery as a continuous source of power and require only low-level signals from the reader, whereas Passive RFID tags reflect energy from the reader or borrow a tiny amount of it to generate a response.
Active tags have a number of advantages over Passive ones. For example, they can be continuously monitored at a distance of 100 metres or more, whereas Passive tags can only be read when they are scanned, and must be within three metres of the reader.
The Active tag technology hasn't gained much of a foothold in the Canadian retail market, due largely to its relatively high cost (about CA$14 per tag; tags are reusable and have a life of about five years). But this will no doubt change as retailers figure out how to take advantage of the enhanced capabilities. Believing it had found just such an application, Staples Business Depot began piloting the technology in May 2007, using it to track high-ticket items such as laptops and printers.
"As soon as we receive high-value goods at one of our pilot locations, we put Active RFID tags on them before placing them in the store," said Jeff Williams, vice-president, Information Systems. "The goods are tagged not only at a SKU level but also at an individual item level -- so it's not only an HP computer, it's this particular HP computer, and we can associate the serial number of the computer with that tag."
Two key objectives of the initiative were to reduce shrink and cut down on the time it takes to check inventory. And as this case study confirms, the company has been quite successful in meeting both of these objectives.
A Flawless Performance
Like most other retailers, Staples is always interested in looking at technology that can improve customer service or allow it to take cost out of operating its stores. So when Fujitsu Transaction Solutions Inc. presented a compelling argument for the use of the intelliTRACKER inventory tracking system from AbsoluteSKY, it caught Jeff Williams' attention.
"We saw some promise in this technology," he said. "Even though it's fairly expensive, we looked at the return on investment and return on capital, and it appeared workable. Our internal returns had it paying for itself in a little over three years. And our hope is that as more organizations adopt the technology, it'll become cheaper and we'll be able to get a higher rate of return."
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