Analysis: RFID - Wal-Mart's Network Effect - ' The Bottom Line '
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The ability to know where every item is in the supply chain and store could save retailers billions of dollars per year. Here's 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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