Major retailers are aligning with Walmart’s RFID initiative – Target, Macy’s, Nordstrom, Dick’s Sporting Goods and Dillard’s are just a few of the big names leading the charge. Suppliers who proactively adopt RFID tagging processes in-house stand to gain significant operational and financial benefits. From reducing chargebacks to improving supply chain accuracy and visibility, below are the key advantages of embracing RFID tagging at the source.
Reduce OTIF Chargebacks
Incorrect counting and kitting can result in non-compliance with On-Time In-Full (OTIF) requirements, leading to shipment rejections or chargebacks – sometimes amounting to nearly three percent of the invoice value. RFID aggregation solutions can enable 100 percent shipment accuracy by supporting fast and automated multi-level audits. Identifying and correcting errors early in the logistics process before goods leave the supplier’s facility is far more cost-effective than dealing with penalties after delivery.
Prevent Miscounts by Proving Chain of Custody
Retail personnel may occasionally miscount items upon receipt, wrongly flagging a shipment as non-compliant. RFID technology enables suppliers to maintain a detailed electronic history of each item’s journey from storage, picking and packing to palletization and final shipment. This chain of custody acts as irrefutable proof that the correct product, in the right quantity and configuration, was delivered, helping suppliers dispute and avoid unjust chargebacks.
Minimize RFID Labeling Errors
Mistakes in RFID tag encoding can lead to rejected shipments and costly chargebacks. Some retailers have indicated penalties as high as $5 per item for incorrect RFID labels. RFID reading, relabeling and reprogramming solutions help suppliers validate tags before shipping by enabling:
- Correction of programming errors
- Placement of new labels over incorrect tags
- Assurance that all RFID tags meet compliance standards
This validation at the source ensures compliance and dramatically reduces the risk of chargebacks related to tag errors.
Transform Retail Supply Chain Efficiency
RFID aggregation software ensures items are accurately counted, verified and corrected before shipment. When paired with data auditing tools, the solution offers a robust trail of each shipment. In cases of declared miscounts or compliance disputes, suppliers can access detailed shipment data to identify discrepancies, validate deliveries and protect against financial penalties.
Build Competitive Advantage Across Retail Partners
Suppliers who adopt RFID tagging internally not only meet compliance mandates but also become more efficient in handling similar requirements from other retail partners. Benefits include:
- Faster item aggregation
- Automated, accurate shipment processing
- Increased operational efficiency
- Reduced reliance on manual, error-prone processes
RFID also enables suppliers to track the identity and location of every item within a pallet, improving shipment visibility and human error correction through data-driven insights.
Drive Operational and Financial Gains
Efficient palletization and packing directly impact overall supply chain efficiency, which in turn improves supplier performance metrics. With RFID:
- Fast-moving goods are identified more easily
- Inventory is restocked quicker
- Chain of custody is maintained for each item
- Chargebacks are reduced or eliminated
These improvements support better business outcomes and stronger retailer relationships.
Long-Term Impact of Walmart’s RFID Mandate
Retail RFID mandates are designed to build a more responsive and accurate supply chain. Over time, the following long-term advantages are expected:
- Enable Accurate, Automated Payments: RFID-based electronic proof of delivery (EPOD) enables automatic vendor payments, streamlining financial processes.
- Support Blockchain Integration: RFID data can power blockchain-based transactions, enhancing trust and streamlining financial reconciliation between Walmart and its suppliers.
- Accelerate Vendor-Managed Inventory (VMI): With RFID insights, suppliers can automate replenishments based on store-level inventory thresholds, ensuring higher on-shelf availability.
- Encourage Local Sourcing: RFID enables better responsiveness, which supports Walmart’s initiative to work with more local vendors, improving agility in meeting consumer demand.
- Optimize Warehouse and Manufacturing Integration: Automated receipt validation, kitting, palletization and Zero Error Shipment verification ensure efficient processing from manufacturing to distribution with complete visibility and minimal errors.
By adopting RFID tagging in-house, suppliers can significantly enhance shipment accuracy, minimize chargebacks and gain a competitive edge in today’s complex retail environment. Turning compliance into an operational strength allows suppliers to boost efficiency, improve partner satisfaction and future-proof their supply chain strategy.
At enVista, we understand the complexities and opportunities that come with RFID adoption. Leveraging strategic partnerships with Zebra Technologies and InThing’s visbility platform brings together the right pieces to help you minimize chargebacks, improve shipment accuracy and unlock real-time inventory visibility – all while building agility and scalability into the supply chain.
Learn about how enVista can help – let’s have a conversation.®
