Item-level tagging (or
RFID
Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. An RFID system consists of a tiny radio transponder, a radio receiver and transmitter. When triggered by an electroma ...
item-level tagging, also known as ILT) is the tagging of individual products, as opposed to case-level and pallet-level tagging.
Item-level tagging is used to track individual items in order to better control
inventory
Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation.
Inventory management is a discipline primarily about specifying the sh ...
, by providing retailers with the ability to tag individual items on the retail floor.
Previously, RFID tags were used to track
pallet
A pallet (also called a skid) is a flat transport structure, which supports goods in a stable fashion while being lifted by a forklift, a pallet jack, a front loader, a jacking device, or an erect crane. A pallet is the structural found ...
s of
merchandise
Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more ...
, rather than individual items, through the
supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activ ...
. With the use of printed RFID tags, retailers are now able to track inventory at the item level, scan the tag, and know the location.
[
Retailers are pushing for tagging each individual item. In fact, large companies like ]Wal-Mart
Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarte ...
, JC Penney
Penney OpCo LLC, doing business as JCPenney and often abbreviated JCP, is a midscale American department store chain operating 667 stores across 49 U.S. states and Puerto Rico. Departments inside JCPenney stores include Mens, Womens, Boys, Girl ...
, and Dillard’s
Dillard's, Inc. is an upscale American department store chain with approximately 282 stores in 29 states and headquartered in Little Rock, Arkansas. Currently, the largest number of stores are located in Texas with 57 and Florida with 42. The ...
are issuing electronic product code
The Electronic Product Code (EPC) is designed as a universal identifier (using a idiosyncratic numerical code for each different commodity) that provides a unique identity for every physical object anywhere in the world, for all time. The EPC stru ...
mandates, where they request their suppliers to comply with these EPC EPC may refer to:
Government and politics
* Eastern Provincial Council, in Sri Lanka
* European Policy Centre, a Belgian think tank
* European Political Community (1952), a former political organization proposed in 1952
* European Political Co ...
protocols. In 2005, it was required that the suppliers use RFID
Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. An RFID system consists of a tiny radio transponder, a radio receiver and transmitter. When triggered by an electroma ...
tagging at the pallet and case level, but now it is required that they tag on the item-level as well. The reason why is it so important for them to implement this is because they want to avoid losing a sale over an out-of-stock item, which they believe accounts for a big part of their losses. Also, if they know where an item is at all times then it easier to move it to where it is supposed to be. By doing this they reduce transportation costs, they gain added shelf visibility and it drives down wasteful overstock
Overstock, excessive stock, excess2sell, B-stock, or excess inventory, is the result of poor management of stock demand or of material flow in process management. Excessive stock is also associated with loss of revenue owing to additional capita ...
.
Benefits
Item-level tagging provides a quick, automated, cost efficient and accurate way to track inventory through the supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activ ...
and in the retail environment.
Benefits to item-level tagging include better visibility and control of inventory and an expansion of customer experience capabilities.
Item-level tagging is critical in order to determine how much inventory is on the floor, what sizes and colors need to be restocked and what inventory is available in stock rooms. Other benefits include the ability to keep a fully stocked floor, increased time and labor savings, increase inventory accuracy, and reduction in clearance items due to incorrect inventory and excess ordering.[
]
Industries Using Item-Level Tagging
* Apparel
* Consumer goods
* Electronic goods
References
{{Reflist
Inventory