Manufacturer Questions

1. What are the key benefits to providing source tagged merchandise to retail?
2. Can the source tagging application process be automated?
3. How do manufacturers know where to apply EAS labels on different types of packaging?
4. Will manufacturers need to carry separate inventories to accommodate different EAS technologies or non-EAS retail channels?
5. How do manufacturers recoup the cost of source tagging?
6. Should manufacturers wait for an RFID item tagging standard before adopting an EAS source tagging program? Will RFID ever replace EAS for item level theft prevention?
7. What is the difference between Phases’s I, II and III source tagging?
8. How does the Visible Source Tag (VST) benefit soft goods manufacturers?
9. What is the Source Tagging Council and how can manufacturers benefit from participating?

Source tagging allows manufacturers the opportunity to increase sales, improve brand visibility and recognition and minimize packaging requirements. Examples include:

• Merchandise arrives at the store floor-ready since no additional security applications are required. Faster to the retail floor translates to quicker sales transactions.
• Integrated tagging ensures pristine product delivery without possibility of an EAS label detracting from your packaging or covering important product information.
• By minimizing out-of-stocks due to theft, reorder rates occur more frequently and accurately. A consistent reorder flow translates into increased sales for the manufacturer – a definite competitive advantage.
• When source tagging is utilized, products can be openly displayed with confidence, often in highly visible retail areas such as end-caps or near the POS. Consumers with access to desirable, highly visible merchandise tend to buy more. Impulse purchasing increases and longer term brand loyalty may be realized.
• Environmental sustainability can be achieved by using smaller, more recyclable packaging combined with the security of source tagging.

Yes. Packaging and integration engineers have coupled with applicator companies to ensure automated application runs seamlessly. The application process, occurring in the main manufacturing facility or deeper into the supply chain to the packaging supplier is by far the most efficient and cost effective method of applying labels, “AT SOURCE”. Multiple EAS label formats are available to ensure both manual and high speed application processes are the highest efficiency levels.

To ensure proper placement, retailers require their suppliers who will be source tagging to send the products to one of the global Authorized Certification Centers. During the certification process, Sensormatic® conducts multiple tests to achieve the optimal tagging location. When complete, Sensormatic returns the products to the manufacturer with specific information on where to place the tag, photos showing correct tag placement and certification documents. Certifying products gives retailers peace of mind that products arriving at their stores will properly activate the EAS system and deactivate at the point of sale.

Depending on your agreement with your retail partners, today, there are several options available:

• Retailers prefer separate inventories in order to avoid possible tag pollution issues whereby live tags of a different technology are released into the marketplace causing false alarms and reducing the integrity of EAS.
• Fractional tagging whereby the supplier tags alternating technologies on alternating products.
• Dual technology tagging on the same product is the most challenging for the marketplace. It requires that one form of deactivation occur at the Point of sale, and another form of deactivation at the point of manufacture to avoid live tags in the open market.

While no single inventory management practice exists for all manufacturers, it is possible to minimize or eliminate multiple inventories by using bulk deactivation systems. When multiple inventories or dedicated production runs are not possible, both Acousto-Magnetic (AM) and RF EAS labels can be applied simultaneously. Shipments designated for AM retailers have their products bulk deactivated for RF labels. The same process is used on AM labels for RF retailers.

In-line bulk deactivation systems can be configured for both conveyors and pallets to ensure maximum product production and shipment efficiency. Contact Sensormatic to determine the best solution for your operation.

Source tagging translates into increased sales opportunities for both manufacturers and retailers. Source tagging also helps expedite the reorder process for out-of-stocks since theft is reduced and retail inventory management becomes more accurate. ROI occurs from increased product revenue and more efficient inventory reordering.

While RFID technology has made significant progress in recent years related to supply chain management, current tagging practices are limited mostly to case and pallet level applications. Individual RFID-tagged items at retail level are virtually non-existent, and it’s unlikely that RFID technology will replace EAS in the near future for item level theft prevention. Item level RFID applications are much more costly and do not provide the same level of security as Sensormatic EAS. With a long standing, successful track record of retail shrink control, Sensormatic has proven to be the most robust technology in combating theft attributed to shoplifting.

• Phase I - label application on the outside of the product packaging. No longer accepted by retail for most products.
• Phase II - label application on the inside of the product packaging. The most common phase used by most manufacturers today.
• Phase III - label application incorporated into the actual product. Offers the highest level of security against theft. For environmental sustainability, Phase III source tagging allows for reduction or elimination of packaging and associated costs.

• Merchandise arrives at the store floor-ready.
• Increased sales are realized by minimizing out-of-stocks due to theft. Reorder rates occur more frequently and accurately.
• Application is damage-free since tag placement is consistent.
• In retail stores, garments hang more attractively or fold more neatly due to consistent tag placement.
• Brand image is preserved.

The Source Tagging Council (STC) is a forum created by retailers and their business partners to discuss and share best practices as it relates to Source Tagging and other Shrinkage initiatives. Annual conferences are held in various countries around the world with the participation of leading retailers, product manufacturers, packaging companies, industry experts and VARs. The STC provides a unique venue for all companies to understand retail market trends, shrink challenges; new packaging initiatives and other retail related topics. The STC allows manufacturers the opportunity to review source tagging issues directly with their largest retailers. See calendar of events for the STC conference dates around the world.

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	Glossary Of Terms Manufacturers Getting Started Retailer FAQ's Source Tagging Overview Source Tagging Industry Events

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