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KM makes inroads into retail

This article appears in the issue February 2008 [Volume 17, Issue 2]
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Retailers are incorporating knowledge management into their processes to gain advantage over their competitors, enabling executives and lower level managers to quickly run reports on sales and other performance measures, to handle inventory better and to gain a clearer understanding of their products.

New BI tool easier to use

For example, Ace Hardware is in the process of integrating WebFOCUS, a business intelligence (BI) application from Information Builders into its systems. The technology enables employees, suppliers and partners to run or write reports on a daily basis, if desired, compared to the previous system, which had capacity and scalability issues.

Brian Cook, Ace software engineering consultant, says, "We had a tool that we had been using for several years, but we decided to move away from it because the cost was continuing to increase, and we were having some problems with development. It was difficult writing to the tool, so projects were taking longer than they should have."

Much of the problem with the previous technology was that anyone wanting to generate reports had to do Structured Query Language (SQL) querying via the tool, creating a learning curve for even those who knew SQL coding, because they had to learn the nuances of the business intelligence technology, according to Cook.

With WebFOCUS, coding can be written in the tool or in SQL itself, enabling the company to generate any volume of reports in any number offormats, Cook says. Additionally, there are no licensing restrictions regarding the number of users, which was not the situation with the previous tool.

The reports can be used to help Ace’s independent store owners with inventory needs, and marketing and sales with business intelligence. Most of the benefits have yet to be realized, according to Cook, who expects the tool to be fully incorporated into the hardware retailer’s systems in the next few months. Ace also wants to explore mobile capabilities for the WebFOCUS application.

RFID is coming of age

RFID (radio frequency identification) is another technology that is providing knowledge management capabilities overseas and is making inroads in the retail supply chain in this country, according to Dan Mullen, president of AIM Global, a trade group that supports innovation and growth in identification and mobility technologies.

Metro Group, a European retailer, has deployed in-store, point-of-sale RFID technology in its high-end Galeria Kaufhof department store in Essen, Germany. The technology enables the retailer to track merchandise from the distribution center to store shelves to checkout.

That allows Metro Group to better manage inventory, ensure shelves are properly stocked and to quickly check out a customer without the need to search for barcodes, because the RFID tags can be read at a distance.

"Galeria Kaufhof’s deployment is the first large-scale application of near-field UHF [ultra-high frequency] RFID to track retail merchandise from distribution through point of sale," said Michael Liard, research director, RFID and Contactless Practice, ABI Research.

At Metro’s Neuss warehouse, tagged goods are read and recorded via Checkpoint Systems’ RFID/UHF hanging conveyor and packing table antennas, as well as Checkpoint UHF dock door portals. Checkpoint portals in the store’s receiving area and stockroom continue the tracking. Checkpoint has also deployed its dual EAS/RFID antennas for security monitoring at the entry/exit and fitting room areas, as well as point-of-service deactivation.

Money's an issue

The downside of RFID continues to be cost. Whereas barcodes cost fractions of a cent, RFID tags run from 8 cents to 12 cents, according to Mullen. While that’s a relatively insignificant increase on a $100 product, it adds a significant percentage on a lower-priced item.

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