PWC CITES DOLLAR IMPACT OF AUTO-ID

MICHAEL GARRY

NEW YORK -- Retailers who apply MIT-developed, product-ID technology to reduce out-of-stocks on their shelves stand to reap $98,000 per store annually, according to one of two studies released publicly last week by Pricewaterhouse-Coopers Consulting here.

In the two studies, or white papers, which focus on what is known as Auto-ID technology, PwC Consulting developed hypothetical business cases that estimate for the first time the potential financial gains and costs of the technology if implemented by retailers and consumer goods manufacturers. Auto-ID has been touted as a revolutionary technology that, by tying product identification and tracking to the Internet, could one day replace the bar code and radically streamline the supply chain.

The two white papers were published in conjunction with the technology's creator, the Auto-ID Center, a three-year-old nonprofit group based at the Massachusetts Institute of Technology, Cambridge, Mass. The papers can be viewed at no charge on www.pwcconsulting.com and on www.autoidcenter.org.

The $98,000-per-store benefit noted in the store study, titled "Focus on Retail: Applying Auto-ID to Improve Product Availability at the Retail Shelf," is based on an application of EPC (electronic product code) tags to cases of products with an average price per item of $1.75.

The other study, titled "Focus on the Supply Chain: Applying Auto-ID within the Distribution Center," reports that retailers stand to reap annual savings of about $23 million at the case level across five DCs.