RFID is conquering the last yard in retail

IIPM Programme :- SUPERIOR COURSE CONTENTS

RFID is streamlining inventory management & improving customer service for retailers the world over

Amit Mukherjee,
Group Chief Information Officer, RPG Enterprises

Retail is one of the largest industries in India, accounting for over 10% of the Indian GDP and more than 8% employment. Industry analysts say that it is on a high growth trajectory with a projected $453 billion potential by 2011(E), fuelled by the Government of India’s (GoI’s) increasing focus on achieving 9-10% growth in GDP, and the growing consumer income level and aspirations. With such a huge demand and an operations-intensive supply side, Indian retailers are gradually realising the power of technology as a key growth enabler. Retail organisations are leveraging information technology (IT) to reduce costs, improve performance, and create competitive advantage. A key technology player would be Radio Frequency Identification Device (RFID), which is proliferating rapidly throughout the retail industry. This is also good news to the Indian software players as they can now look inwards for business. With a broader market for RFID & more software players with expertise, it is also becoming viable for small retail players as well.

The retail fever gripped India in 2000, but the automation process started only a couple of years back. The main reason for the technology laggardness was the lack of scale. The industry was very nascent, share of organised retail was a miniscule percentage of the total market base and the retailers were still experimenting. As the industry grew by leaps and bounds, the high performance companies started rethinking the fundamental business processes and strategies that can be enabled by RFID - and started using these to differentiate them in the marketplace by developing cost-effective and efficient supply chain applications and capabilities.

Major impact on supply chain can be created through RFID - automated devices can keep track of a product from distribution centre to the store. This enables adequate inventory management and advance planning so that demand can be met timely. Proper planning would ensure economies of scale while a product is being ordered, better tracking would mean better control of shrinkage and therefore result in a lot of savings, part of which can be transferred back to the consumer. So RFID will also have a positive impact on consumers, as well. No wonder, global retail giants like Wal-Mart focus so much on RFID technology and they had in fact implemented such technology some twenty years back.

Even though, RFID adoption in India is comparatively new but statistics show that India’s growth in organised retail has been much faster than in the other matured markets of US and Europe. As the Indian retail players grow and acquire scale in operation and as they wake up to the benefits of technology and become more and more savvy, we will see significant investments in RFID adoption. It is difficult to forecast accurately, but within five years, investment in RFID would be to the tune of Rs.50-100 crore.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
IIPM Ranked No. 1 B-School In Global Exposre - Zee...
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...