The Bottom Line

By Mark Roberti  |  Posted 2003-09-15 Print this article Print

The ability to know where every item is in the supply chain and store could save retailers billions of dollars per year. Heres an estimate of what Wal-Mart might save annually when RFID technology is deployed throughout its operations.

  • $6.7 Billion: Eliminating the need to have people scan bar codes on pallets and cases in the supply chain and on items in the store reduces labor costs by 15 percent.
  • $600 Million: Even with the most efficient supply chain on earth, Wal-Mart suffers out-of-stocks. The company boosts its bottom line by using smart shelves to monitor on-shelf availability.
  • $575 Million:Knowing where products are at all times makes it harder for employees to steal goods from warehouses. Scanning products automatically reduces administrative error and vendor fraud.
  • $300 Million: Better tracking of the more than 1 billion pallets and cases that move through its distribution centers each year produces significant savings.
  • $180 Million: Improved visibility of what products are in the supply chain-in its own distribution centers and its suppliers warehouses-lets Wal-Mart reduce its inventory and the annual cost of carrying that inventory.
  • $8.35 Billion: Total pre-tax saving is higher than the total revenue of more than half the companies on the Fortune 500.

    Next page: RFID resources.


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