RFID to Drive Supply Chain Efficiency

RFID to Drive Supply Chain Efficiency

Efficiency, is a word often associated with automation, time savings, productivity, and now Radio Frequency Identification (RFID). “Driving Efficiency” is a frequently used term in the office, usually followed up with the question; How do we achieve this? One of the technologies that is more recently seeing expansive and creative use to drive efficiency in the Supply Chain world is RFID.

What is RFID and how does it work?

RFID methods use radio waves to read and capture information with an RFID reader, that is stored on a tag or smart label containing an integrated circuit and an antenna. RFID is being used in a number of different industries to store information and track movement of products, materials, and other assets.

No matter what your use for RFID is, it works off of the same general principals. RFID technology automatically identifies objects, collects data about them and enters it directly into a database, requiring little or no human interaction.

An RFID tag is first attached to an object and coded with information, much like a barcode. As the tag passes by a reader within range, the information is automatically collected and sent to a database or enterprise system to be recorded. A simple example of RFID in use would be, a forklift that carries a pallet of product through a warehouse to its designated location, RFID readers would pick up information from all RFID tags attached to the products and record data about the amount of product, and its current location.

Why is it better than barcoding?

The capabilities of RFID far surpass those of barcodes. One of the most significant benefits of replacing barcodes with RFID tags is the ability to scan multiple tags at one time. In the previous example given about a pallet being moved through a warehouse, you could identify that it was comprised of mixed goods, leveraging the many different tags. Without having to directly scan each item, as you would with a barcode, the signals from all RFID tags are instantaneously picked up when they are within range of a reader, saving your company valuable time and money.

RFID tags are also capable of being read or scanned by a reader without being within line of sight of the reader, and can store far more information that a single barcode can. Barcodes can often be damaged or hidden causing them to be unreadable, causing a loss in efficiency. RFID readers cannot only be read more easily, but can also have read and write ability. A typical barcode only has the ability to be read, the information on it cannot be edited. In the rapidly evolving global supply chain of today, RFID tags open a world of possibility with being able to be “written” on; allowing tags to show logistical movements of assets.

How is it being used?

There are many ways RFID tags are used every day by yourself and those surrounding you. Do you have an electronic keycard that you use at work, or to get into your gym? Most likely this is an RFID tag that you are using. Think about the amount of time you save not having to look for a key, or perhaps having to wait to check-in. Have you used electronic tolling like E-ZPass, Nexpress, or SunPass? These tolling systems also use RFID technology to communicate with transponders within the tollbooth.

RFID technology not only saves us time in our personal lives, but can be a huge asset in supply chain visibility. This technology sees the most use in the tracking of assets; including inventory locations, tracking goods through the manufacturing process, tracking shipping containers, and tracking other assets such as company computers and office equipment.

Although Walmart started requiring its largest suppliers to begin using RFID tags in 2005, many businesses have yet to adopt this technology. This could be due to the higher cost as compared to barcoding. However, those who have adopted the technology as an integral part of their business have shared that it has increased accuracy, efficiency, and is part of the future of their supply chain.

What are the benefits to supply chain?

Tracking goods, materials, containers, and the many other assets that relate to your supply chain is no small task. As mentioned before, all of these relate to the buzz word efficiency, but that isn’t the only benefit, what about cost savings?

RFID tags help achieve efficiency in many ways. Just like RFID keycards, RFID tags on inventory can save time too. When either adding or moving materials and goods in a warehouse, someone must take time to either write the change down, enter it into a system, scan the barcode of every product, or perhaps forget to do any one of these things. If tracking is forgotten, hours can be spent looking for missing goods and materials. The rate of error increases every time a human is involved in entering or changing data as well. Having RFID tags on containers or goods allows them to be automatically read as they pass by readers without any human interaction, leaving you with a great deal of time savings.

How do you save money, when RFID tags are more expensive? RFID tags allow for the tracking of otherwise difficult to locate assets. This includes things like company owned laptops, or even returnable containers. Most companies that use returnable containers will admit that they are extremely difficult to track and are often unable to locate missing containers. Attaching RFID tags to returnable containers can give you information about when they are shipped and to whom they were shipped, as well as returning them to inventory when they arrive back at your facility. An RFID tag can be re-written many times allowing these tags to be used over and over, saving money by eliminating shrinkage in your warehouse returnable container inventory, and other valuable assets.

The biggest advantage to your supply chain, is the ability to create efficiency through better visibility of company assets. Visibility creates time and cost savings, that ultimately benefits the entire supply chain and its efficiency.

-William