I've been reading your articles for several years and appreciate your brief, informative commentary on current topics.  Wal-Mart profit, though not as high as indicated in your recent editorial, would still result in a significant ($58 MM) increase to the bottom line.

The RFID hype has definitely created high expectations.  I've been working with a pharmaceutical client that has looked at, and tested RFID on a small scale, with poor results.  The pharma industry perceives the cost of many improvements (manufacturing, distribution, or IT) as a minor cost when compared to their profit margins.  The decision to not pursue RFID was not based upon the cost of implementation.   RFID is just too unreliable (at this time) for tracking drugs in a highly regulated (DEA / FDA) environment. 

You met your goal of stimulating some thinking!

Mark Hamburg

Lockwood Greene

This paragraph says it all:

“The main driver of this improvement was a change from traditional methods of replenishing store shelves, which rely on workers noticing a shelf spot is empty, or scanning an item in the back store room and querying the system about room on the shelf to accept the product. With RFID, the store system uses data about store receipts and movement to the store shelf from RFID scans, combined with POS data, to drive "autopick" lists of what needs replenished. In short, this is a change from associate-driven replenishment to system-driven replenishment.”

The benefits stem from better visibility and control of the inventory within the store and how the shelf replenishment process is managed. This could be achieved without RFID by simply recording when items move from back of store to shelf, reducing shelf quantity from POS scans and creating replenishment tasks when a shelf approaches a trigger point. The use of RFID in store to record a product move from back room to shelf simply eases the data collection. Recording the arrival at the store by reading RFID tags doesn't help here at all.

In fact the process as described sounds strange as well. Why not automatically create the tasks and simply send them to the users RF device as a group of tasks. Just like a WMS would if it was replenishing a group of pick faces in one walk by having the user collect several cases in a walk and then empty them in to pick faces in a convenient sequence.

The process of having a user scan an item in the back room and then have the system tell him it can be picked for a replenishment seems odd - unless the store system doesn't actually know what is in the backroom!

Nick Turner

Columbus OH

Why so much concern over out-of-stocks (OOS) items? Surely having a small percentage of them indicates a healthy supply chain and a robust market?

If you're a retailer and never OOS of anything, you must be carrying too much inventory. There is no way to second-guess the buying public's need in any hour, let alone day, week or month. The real question is, which items are critical and which are merely important. Some items can easily be substituted, others not. It seems
to me that the closer a company gets to the culmination of the supply chain (i.e. the customer interface), the less intelligence is applied to the exercise. Stores cram items too closely for effective browsing or display them in such profusion that shoppers delay the purchasing decision. More attention should be paid to POS displays and to shopper comfort than gnashing one's teeth over the occasional OOS situation.

One thing though: when OOS of any item, it can be a good idea to actively suggest a suitable alternative and (when asked) do try to offer a firm restock date.

Richard Rix
WMB
Toronto

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Do you have additional comments on the Wal-Mart out-of-stock study, our review, or any of these reader comments? Let us know your thoughts.