Research & Trends: Real-Time Inventory Accuracy And Visibility

By Sahir Anand and Russ Klein, The Aberdeen Group

Store-level RFID (radio frequency identification) has a direct relationship with inventory management. Aberdeen Group data reveals that an astounding 70% of retailers rate themselves “average” or “below average” on their inventory management processes. Aberdeen’s May 2009 Retail Inventory Optimization benchmark report revealed that, while 75% of Best-in-Class retailers indicate the ability to provide enterprisewide visibility into SKU level availability, only 40% of Laggard retailers currently possess similar capabilities. Moreover, only a third of retailers are using traceability tools for inventory tracking. Aberdeen data from the Item-Level RFID Tagging in Retail: Improving Efficiency, Visibility, Loss Prevention, and Profit report indicates that for 38% of retailers the costs associated with the slow movement of inventory is one of the top pressures in stores. This means that visibility into product movement (on-hand and in-transit active, inactive, discount, clearance, and discontinued merchandise) is imperative for creating cohesive replenishment, merchandising, and sales forecast plans, as well as overall execution of sales and operations plans (S&OP).