Bill HardgraveAuburn University

U.S.A.

Note: this document is copyrighted ( 2013) and confidential; do not distribute or cite without explicit permission.

2003 – 2006: pallet -> case; Wal-Mart, Metro, DoD• Issue: inventory management in the supply chain;

unprecedented ‘affordable’ visibility• Epiphany: most problems at the store• Result: shift to store-level visibility and item-level

2006 – present: item-level apparel/footwear; American Apparel, Dillard’s, Bloomingdale’s, J.C. Penney, Walmart, Macy’s, several in Europe• Issue: inventory accuracy, loss prevention, etc.• Epiphany: multi-use technology, start at the store and

go up supply chain• Result: more adopters, broader adoption

AKA evolutionary is one that introduces only minor changes to the status quo

Small improvement to existing processes Focuses on cost or feature improvement

in existing processes Generally based on an established

technology, used for years, refined, stable, few (if any) technology challenges.

Fairly predictable

AKA revolutionary or transformational is one that allows for great improvement in existing processes and the development of new processes

Generally, based on new technology or significant refinement of existing technology.

High uncertainty; unpredictable

A ‘disruptive’ technology is one that changes the bases of competition by changing the performance metrics along which firms compete.

It lacks refinement, often has performance problems, appeals to a limited audience, may not have a proven practical application (early on).

Highly uncertain and unpredictable

Disruptive

Revolutionary

Evolutionary

Is it Incremental? Is it Radical? Is it Disruptive?

YES!

RFID = “barcoding on steroids” Originally used as supply chain

technology Pallets and cases Single use cases

•Out of stocks•Cycle counting as a replacement for hand

counting Examples: Walmart, American Apparel

Average Weekly OOS by Treatment -Test Stores

376328

444

0

100

200

300

400

500

No RFID

Partial RFID

Full RFID

Barcode

RFID = “barcoding on steroids” Originally used as supply chain

technology Pallets and cases Single use cases

•Out of stocks•Cycle counting as a replacement for hand

counting Examples: Walmart, American Apparel

Item level Multiple, aggregated use cases

•Cycle counting• Inventory accuracy•Out of stock•Shelf replenishment•Loss prevention•Dressing room management•Price change management

Examples: Macy’s, Walmart

Based on multiple studies …

Before RFID:

Based on multiple studies …

After RFID:

Inventory Accuracy

Forecasts

SalesCustomer satisfaction

Replenish-ment

Store execution

Theft

OOS

Dressing room

Faster checkout

Locating product

Excess inventory

Item level Multiple, aggregated use cases

•Cycle counting• Inventory accuracy•Out of stock•Shelf replenishment•Loss prevention•Dressing room management, etc.

Examples: Macy’s, Walmart

Disrupted Disruptor

Professional inventory counting

RFID

Electronic article surveillance (EAS)

RFID

Barcodes RFID

Healthcare RFID and other sensors

Food safety / food quality RFID and other sensors

Traditional retail Omni-channel retail – enabled by RFID

Don’t pave the cow paths …

Don’t pave the cow paths … Don’t settle for process improvement

when you can process enable. This may require best practices or standards.

Let awareness lead to prevention/solutions

Move to 0HIO (zero human intervention in operations)

Don’t start with Six Sigma processes

The people … will want it to be incremental

Upper management … will want it to be disruptive

RFID can be all three types•Within the same company•Along the supply chain

Early adopters viewed it as incremental, which hampered adoption. Now, many are using as radical and disruptive …

Bill Hardgravehardgrave@auburn.edu