Radio technology may soon replace bar-coding at big retailers

RFID ensures improved supply chain management, tracking of shipments, monitoring of product status on Net

Come radio identification, exit bar code. With proposed entry of global giants like Wal-Mart, retailers in India are looking at improving digitisation in supply chain management by using state-of-the-art radio frequency identification RFID technology instead of the 30-year old bar coding.

RFID enables tracking of shipments, making shipment status available over the Internet to allow retailers and suppliers to immediately respond to disruptions in the flow of goods while bar coding simply provides information on manufacturer and product type.

A single RFID tag costs 0.15-0.20 around Rs 6-8, which acts as a cost deterrent for most Indian retailers prohibiting its usage till now. However, with international retailing giants like Wal-Mart coming to India, RFID is likely to replace bar coding.

An estimated 40 per cent of perishable commodities are lost from the farm to the retailer due to an inefficient supply chain management using manual practices. 8220;The whole problem lies in the manual movement of physical goods right from the factory level to the retailer leading to delays and errors,8221; said Mathur.

The fast moving consumer goods FMCG segment saw a shift to global standards coding, whereas the other sectors seem resistant. 8220;Globally 5-10 per cent of sales get hit because of supply chain inefficiency. In India, this figure can only be worse,8221; said Mathur.

The retailers have started using proprietary automation instead of standardised automation, which doubled the expenses, and finally this cost is passed on to the customer, added Mathur.

8220;Lack of technology like Electronic Data Interchange EDI leads to a mismatch between retailers buying products unlinked to purchase or sales order causing chaos at the warehouse,8221; Yogesh Arya director Indo Arya, a logistics company. EDI is the transmission of machine-readable information between computers at two or more organisations.

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At present, Reliance uses the global standards for bar coding at its outlets. Industry insiders point out availabillity of cheap labour that can be engaged in manual operations as a reason for using manual practices instead of automating the supply chain.

However, these practices are set to change as global giant Tesco also pointed it at a retailer summit recently as the reason for Tesco8217;s cautious entry in Indian retailing, according to a reuters report.