Expert Column: Addressing Grocers' Supply Chain Challenges with RFID Tech

October 7, 2014, 01:20 am By Su Doyle, Checkpoint Systems

As food retailers expand merchandise categories to increase customer shopping frequency and market share, they face challenges in applying the right technology mix to meet the needs of merchandise expansion. High on their list: Being able to track high-risk and perishable items from source to store to customer purchase, so they can reduce retail shrink while increasing sales and ensuring product safety.

For example, as supermarkets add in-store pharmacies for customer convenience, they're subject to the same regulations as stand-alone pharmacies and increasingly need to track drug quality and safety, including thwarting counterfeit products. RFID technology can automate the traceability of pharmaceuticals. By applying tags at source manufacturing, pharmacies can follow the chain of custody of individual medications and ensure the drug pedigree of items entering their stores. Once there, supermarket pharmacies can ensure the quality, authenticity and safety of prescription drugs and quickly know if and when they expire.

Meaty Issues

Even more central to food retailers are meats, particularly new premium categories. In markets outside the United States, particularly Europe, meats are among the most stolen items, while in North America, retail theft is actually exceeded by spoilage as the highest source of shrink.

As supermarkets expand fresh meat and seafood selections in their stores, and carry more premium meat products, they must ensure quality and safety in store and in the supply chain. Many supermarket chains control quality "from farm to fork" by owning their own farms or having exclusive/select arrangements with vendors. Despite that, many challenges remain.

Once meats are packed in refrigerated trucks, they may still be exposed to varying temperatures that enable the growth of pathogens. These disease-causing agents are increased during hand-offs in the supply chain at distribution centers and supermarkets. Some supermarkets are already tracking temperatures in trucks, noting how much time perishable products spend at specific temperatures.

Once meat arrives in stores, there's a critical need to know just how much time remains before it must be sold or destroyed. Since supermarkets regularly package meat in individual portions at the stores, it's relatively straightforward to add an RFID tag within each package. Once the meat is placed in display cases, employees can quickly scan individual packages with RFID readers to uncover which packages are past the sell date (in which case they're removed) or nearing the sell date (in which case, they're rotated to the front/put on sale). This mitigates the risk of selling product past its expiration date, and also saves employee time, reduces waste and increases sales.

An additional benefit is that by tracking which meat is spoiled or sold, supermarkets can be smarter about ordering, because they know their store needs precisely. This is particularly useful when premium meats might move more quickly in some store locations than in others.

How it Works

How might this RFID process work? Consider this fresh meat tracking supply chain example. Once meat inventory reaches a distribution center, an associate applies to each shipment an RFID tag that's encoded with lot code, SKU and expiration date. In addition, a temperature log is activated. RFID tags are then read as the meat is packed and shipped to stores. As the meat is received at the receiving dock, it's scanned again. Store personnel are alerted if the product has a low shelf life. It's then scanned again as it goes through the cooler and meat prep area. Temperature history is also downloaded to ensure that there's no spoiled product. Once in the meat display area, personnel with scanners can quickly determine whether there's any expired or soon-to-be expired meat and take the appropriate action. And as the meat is sold, the right amount of replacement can be ordered.

Adding new merchandise categories can be challenging because of high risk and spoilage factors. By using RFID, supermarkets can decrease food loss, increase sales and ensure customer satisfaction.