Retail and Technology

As technology improves, companies are trying to solve their traditional problems by using new technology. RFID can be an answer for retail companies to locate and track their orders.

Some of the biggest problems retail companies face are stock outs, limited visibility into their supply chain and theft. All these problems could be solved through RFID. This leads to the interesting discussion on how much of technology is necessary for a company. Is it necessary to track a single can of coke; the answer might vary depending on the industry, the company and the products. Normally it would be enough to track a case or a lot but the need to track an item as closely as possible was highlighted in a recent food contamination case where such information was valuable in tracking the source of the contamination.

Many times technology requires infrastructure and in this case too, the technology a company can implement is limited by the amount of infrastructure they are willing to invest in. More granularity in tracking means more data stored and that means larger and more complex datwarehouse systems.

There are a lot of benefits realized by companies today by the visibility into their supply chain by technologies like RFID s and location radars. Demand fluctuations can be minimized by knowing what exactly they sell and even their inventory can be reduced drastically by knowing where exactly their products are. Also recently, one of the major transportation companies found out that their trucks were losing a lot of time and fuel trying to make left turns at traffic lights. They worked out an algorithm where the trucks mainly take right turns which are much faster and found out that it gave them both time and cost benefits.

But such implementations would separate the suppliers who could afford such technologies from those who could not. For some of the leading suppliers this might be a good thing because they could get a lock in from the retailer which would ensure business for them but this would also make it harder for smaller suppliers to compete. It is really tough for the retail companies to bring out any new initiative throughout their supply base unless they have a buyer power like Wal-Mart. Most of the retailers bring out new technology in phases by targeting the suppliers with high volumes initially and then gradually roll it out to the smaller players.