Supply chains are growing increasingly complex, with geopolitical and economic destabilisation forcing retailers to continually adapt. To highlight the scale of the issue, a Gartner survey in 2024, found that 42% of procurement leaders now considered supply disruption the greatest threat to procurement.
To further exacerbate these issues, the US continues to consider trade tariffs on a number of countries and products globally, which could further strain supply chains if not managed correctly. By increasing the cost and complexity of operations, many retailers are looking for solutions to create more reactive and agile supply chains.
One solution for developing a more agile supply chain is the use of item-level RFID solutions in distribution centers and stores. Using the technology allows retailers to manage inventory with greater than 98% accuracy. Increased visibility over the supply chain allows retailers to better prevent items from being caught in shifting shipping regulations and remain flexible during procurement. With accurate visibility of current inventory, supply chain operators can more accurately predict the stock required and generate tasks to move the products to where demand is occurring or where shortages exist.
Disruption is still hurting retail procurement and logistics
For retailers who are trying to procure and supply products, recent years have already created a long list of logistical headaches, including strikes across docks and ports in Eastern America and geopolitical tension in critical areas such as the Straight of Hormuz. To further highlight the scale of the existing issues, Resilinc revealed that supply chain disruptions increased 38% year-on-year in 2024, slowing down logistics and making procurement almost impossible to predict accurately.
Trade tariffs suggested by the US Government could worsen disruptions, with potential price increases on a range of items and rapidly changing rules that threaten to trap products in customs should retailers make mistakes during inventory distribution. To avoid situations that threaten sales opportunities, revenue, and ultimately, profit and customer service, retailers must be extremely accurate with where and when inventory is in place to maximise chances of meeting demand.
For retailers who are looking to procure and supply items globally, navigating evolving regulations and tariffs should be a top priority, with large costs for failing to meet requirements. The cascading effect of procurement and supply issues also presents itself on the shop floor, with stock-outs weakening customer loyalty and reduced sales opportunities. To avoid these disruptions, so that brand loyalty remains unaffected, retailers must deploy technology that helps accurately track products throughout the entire product life cycle.
How can RFID help during the procurement process?
With new tariffs and regulations expected to complicate logistics, successful retailers today are scrambling for a more accurate understanding of their stock at all times. This ensures that they are not expending resources on unnecessary procurement.
With item-level RFID deployed, retailers can manage their inventory through significantly improved accuracy throughout the entire supply chain. This allows retailers to continue to maximise product sales while optimising costs in manufacturing or procurement, transporting, and storage. The increased inventory accuracy from RFID also enhances the effectiveness of the use of their AI tools in driving optimisation.
With item-level RFID technology in place, procurement leaders can also see benefits by adjusting orders to suppliers by reacting to real-time inventory and demand. The technology delivers over 98% inventory accuracy in distribution and stores. As a result, retailers can clearly and accurately see stock levels across all locations. They know which items are required, leveraging accurate data to optimise purchasing costs. This streamlines the procurement process and reduces costs in the supply chain. In turn, retailers are able to mitigate financial loss through unnecessary procurement while maximising profit margins, even as challenges and additional complexity loom.
Refining procurement and supply logistics helps keep item sales price competitive. With increasing financial implications continuing across the globe, some retailers are offsetting their reduced margins by increasing consumer purchasing prices.
However, with RFID in operation, retailers can optimise costs and pass these savings on to consumers. With optimised product pricing strategies, retailers can better compete against competitor brands while building consumer trust, satisfaction, and loyalty.
Supplying accuracy to avoid disruption
Once a retailer has procured new stock or materials, they then have to move them quickly and accurately through the supply chain. Thanks to the high-level accuracy and instantly accessible data shared throughout RFID software, brands can understand the specific items in each shipment, empowering retailers to better comply with evolving regulations.
With items potentially coming from across the globe, staff in warehouses and distribution centers must be able to receive and process items quickly and accurately to prevent bottlenecks and shortages. RFID tunnels and manual audit stations can be used to process 100% of the inbound cartons of products entering a distribution center at 100% accuracy. This is a massive improvement over carton-level sampling that usually takes place at only 1% of cartons today.
Product availability is critical to retail success. A reliable and efficient supply chain facilitates this. While stock-out situations negatively impact customer satisfaction, reliable product availability is the key contributor to high-quality experiences. From here, retailers can strengthen customer trust and loyalty, and brands can deliver long-term business success – regardless of tariffs.
Keeping procurement and logistics agile in the face of new challenges
It is clear that even before decisions over US tariffs have been finalised, retailers will have to remain agile to continue the operation of their procurement and logistics without disruption.
With its 98% accurate data, RFID offers businesses a much better chance of achieving this, helping to prevent situations that can affect brand loyalty. Greater visibility will grant enterprises a level of agility and flexibility that will allow them to explore all opportunities to avoid disruption.
