RFID-Enabled Item-Level Inventory Management System

UPM Raflatac, Seeonic™ and Alliance, a RockTenn company, announced the deployment of a new generation of Alliance’s MAXRPM™, an inventory management system for retail promotional items that uses RFID technology to provide retailers and manufacturers with real-time business insights of retail promotion performance at the item level.

The solution, said to be an industry first, pairs a free-standing, RFID-enabled MAXRPM retail display, developed, built and sold by Alliance, with Seeonic’s SmartWatch™ service and UPM Raflatac UHF Gen2 DVD Spine tags, to create actionable intelligence that business users can use to optimize the manufacturing, distribution, management and marketing of high-margin promotional inventory such as entertainment DVDs. The MAXRPM system will make its debut at RFID Journal Live 2009, April 27-29, in Orlando, Florida.

While retailers have long used retail promotional displays to market entertainment DVDs and other promotional items, these units have never provided business intelligence, forcing staff to count inventory manually and increasing human error and labor costs. As a consequence, retailers have lacked access to accurate, timely data that would help them ensure stock availability, fine-tune ordering strategies and drive consumer products merchandising sales by making changes to product packaging or marketing strategies. Meanwhile, manufacturers have lacked data that would enable them to match production to consumer demand, anticipate demand spikes and distribute inventory efficiently, while reducing production and logistics costs.

The new MAXRPM inventory management system solves these challenges by providing real-time, web-accessible data and analytical and modeling tools retailers and manufacturers can use to optimize and evolve production and sales strategies on a continuous basis. In addition, the MAXRPM system provides leap-ahead benefits over disposable promotional displays. A free-standing, battery-powered and semi-permanent unit with intelligent shelves, the MAXRPM system functions autonomously, can be easily deployed in any retail environment and can be customized with new banners. As such, it provides retailers with a versatile, reusable and environmentally sustainable tool to showcase retail promotions, while measuring their success.

“RFID technology provides an unprecedented level of insight into consumer demand and behavior,” says Jan Svoboda, Sales and Marketing Director, Americas, RFID, UPM Raflatac. “The business intelligence provided by the MAXRPM system improves the ability of manufacturers and retailers to collaborate on forecasting demand, maximizing product sales and per-store revenues.”

The MAXRPM system contains an embedded inventory management system that uses SightWare™, an electronic module with an UHF Gen2 RFID reader to read RFID-tagged merchandise stored on display shelves. This data is captured in real-time and communicated wirelessly to a secure, web-accessible business intelligence service and relational database, SmartWatch™, hosted by Seeonic. SmartWatch provides powerful analytical and modeling tools, SmartPlan™, to help business users track and manage inventory and reduce out-of-stocks. The MAXRPM system can also be paired with RFID-enabled loyalty cards to motivate consumer behavior, such as visiting stores at specific times to receive special offers or merchandise giveaways.

“The MAXRPM system provides business users with resources that take the guesswork out of inventory management,” says Harley Feldman, President and CTO, Seeonic. “The Seeonic platform allows manufacturers and retailers to make informed decisions about production and ordering and adapt instantly to changing conditions.”

The MAXRPM display system is currently installed at the Sam M. Walton College of Business RFID Research Center at the University of Arkansas as part of the global leading retail test center. “Our research studies have demonstrated that retailers achieved a 16 percent reduction in product out-of-stocks with merchandise identified and tracked using RFID EPC technology,” says Dr. Bill Hardgrave, Director of the RFID Research Center and Executive Director of the Information Technology Research Institute. “In addition, RFID-enabled stores were 63 percent more effective in replenishing out-of-stock products than control stores not equipped with the technology. Essentially, this meant fewer total out-of-stock items and fewer occurrences of empty shelves when the merchandise was in the back room.”

“Manufacturers and retailers have long known that they have a short window of time to drive sales of new product releases before prices fall,” says Jim Einstein, Executive Vice President and General Manager, Alliance. “The MAXRPM system enables them to make the most of this ‘golden hour’, delivering a superior customer experience and optimizing the sales of these important, high-margin products.”