RFID in the distribution center: Why store success begins in the DC

Executive summary

Many store problems don’t start in the store. They start earlier: in goods receipt, in picking, in the distribution center or when shipping to the store.

When deliveries are incorrect, incomplete or late, store operations, omnichannel, replenishment and inventory accuracy suffer. RFID can help DC to detect errors earlier, check shipments more automatically and improve data quality between the supply chain and store.

Checkpoint® also positions RFID solutions for supply chain and logistics. The company describes that smarter data and end-to-end traceability can help companies make faster and more informed decisions, reduce inefficiencies and ensure that products and assets are where they need to be.

The central message: The store can only work as well as the supply chain that supplies it.

1. Store success starts in front of the branch

Store teams are often blamed for problems they didn’t cause. An item is missing from the area because it was never delivered. A size is not available because it was picked incorrectly in the DC. Click & Collect fails because the inventory was incorrectly posted to the branch.

RFID in the DC can help make such errors visible earlier.

2. The invisible costs of incorrect deliveries

Delivery errors affect several areas:

• incorrect store inventory
• Search time
• Refill problems
• Customer frustration
• Complaints
• manual clarification
• Omnichannel cancellations
• Overstock or understock
• worse forecasts

A mistake in the DC is often expensive in the store.

3. Goods receipt in the DC

RFID can support goods receipt processes by making items, boxes or pallets more quickly validatable. What is crucial is the comparison between expected and actually read goods.

Questions:

• What was announced?
• What really arrived?
• Are there any shortages?
• Are there any traditions?
• Are there wrong variants?
• Does a deviation have to be clarified immediately?

The earlier errors are detected, the lower the consequential damage.

4. Goods issue and store delivery

Outgoing goods is a critical control point. This is where it is decided whether the right goods go to the right branch.

RFID can help validate shipments before leaving the DC. This is particularly relevant for:

• high variant complexity
• fast delivery cycles
• Omnichannel needs
• Promotional goods
• Fashion and shoes
• branch-specific picking

5. RFID tunnels, gates and handhelds

There are different forms of recording in the DC:

• stationary gates
• RFID tunnel
• Handheld readers
• Desktop Reader
• mobile testing stations
• Packaging or picking stations

The right solution depends on the process. A tunnel is not necessary everywhere. A handheld is not enough everywhere. The decisive factors are the throughput, the error costs and the desired automation.

6. Item level or case level?

Not every DC process needs the same level of granularity. Sometimes cardboard or pallet level is enough. Sometimes item-level accuracy is needed.

Item-level RFID becomes particularly strong when:

• Store inventories must be precise
• Omnichannel is relevant
• Variants are critical
• Loss prevention needs data
• Error costs are high

Case level can be useful if speed and packaging units are a priority.

7. Data quality between DC and store

RFID in the DC not only improves physical control. It also improves data flow.

Good DC data helps the store:

• Better plan goods receipts
• Update inventories sooner
• Detect delivery deviations more quickly
• Better to prepare refills
• To keep online availability more stable

8. Advance Shipping Notice and RFID

When shipping data is more accurate, stores and systems can be better prepared. An Advance Shipping Notice is only as good as the data on which it is based.

RFID can help match shipment data with physical goods. This turns an announcement into a verified flow of goods.

9. Omnichannel and DC

Omnichannel doesn’t just depend on the branch. The DC must also deliver goods reliably and move inventory correctly.

RFID can help make the entire flow of goods from the DC to the store more transparent. This is particularly important when stores are used as fulfillment nodes.

10. KPIs for RFID in DC

Important key figures:

• Goods receipt time
• Goods issue time
• Picking error
• Delivery deviations
• Claims/complaints
• ASN accuracy
• Shipment Accuracy
• Throughput per hour
• manual clarification time
• Store inventory corrections after delivery

11. Typical mistakes

Error 1: Consider DC and Store separately.

Error 2: Only test RFID in the store, although errors occur in the DC.

Mistake 3: Not defining a clear level: Item, Case or Palette.

Mistake 4: Not integrating data into ERP, WMS and store systems.

Mistake 5: Not setting exception processes for delivery discrepancies.

12. Checkpoint® Perspective

Checkpoint® addresses RFID from labels and inlays to hardware and software. For DC processes, it is particularly important that the labeling, reader concept and data logic fit together.

The right solution can be a handheld process, a gate, a tunnel, or a combination. What is important is not the form of technology, but rather the benefit of the process.

13. Conclusion

The store is the visible end of the supply chain. But many store problems arise before that.

RFID in the DC can help detect errors earlier, validate shipments better and make store inventory more stable.

> Better store processes start with better delivery quality.