How RFID is Transforming the Supply Chain

Posted by Advanced Mobile Group on Nov 25, 2022 8:00:00 AM


The supply chain is the flow of materials from suppliers to manufacturers to warehouses to consumers. Each company has a unique supply chain, and this is something that businesses are constantly working to improve in terms of accuracy and efficiency. 

Accurate and real-time data is vital to an effective supply chain. To manage their inventory properly, businesses must be able to track their goods at all stages of the supply chain process. This can now be accomplished using RFID technology. Here is what you need to know about RFID and the ways it is transforming the supply chain.

What is RFID?

220329-the-many-benefits-of-rfid-for-supply-chainsRFID stands for “radio frequency identification.” The technology captures digital data stored on smart labels, called RFID tags, using a specialized reader. RFID is similar to the concept of bar codes but a bit more advanced. 

Everyone has seen the challenges checkout clerks experience trying to scan bar codes in a checkout line. RFID tags don’t need to be placed directly under a scanner for reading. And, unlike barcodes, an RFID scanner can read multiple RFID tags simultaneously. 

The concept of RFID tag has been around since World War II when the British used it to track its airplane manufacturing systems. But the first patent for the technology wasn’t issued until the 1970s. Today, major retailers like Walmart spend tens of millions on the technology to transform their supply chain efficiency. 

How RFID Technology Works

RFID is part of a technology group called Automatic Identification and Data Capture (AIDC). The function of AIDC is to automatically identify items, gather data about them, and record that data directly into a designated system without human intervention. RFID solutions use Bluetooth technology or radio waves to achieve this. 

Simple RFID systems use several components - an RFID tag, an RFID reader, and an antenna. RFID tags consist of an embedded transmitter that sends and receives signals and an integrated circuit that stores and processes data. RFD readers are used to send a signal that activates the RFID tag to transmit information. Some RFID tags have batteries, and others don’t. 

Ways RFID is Transforming the Supply Chain

Supply chain management and logistics are implementing RFID solutions as a means to enhance visibility between various touchpoints. Each supply chain participant is using the technology in different ways. 

Inventory Management

RFID_file_trackingManufacturers need to keep track of their raw materials and finished products. Inaccuracy in any of these functions can lead to errors and delays, which impacts delivery dates, trust, and overall results. 

RFID technology can transform a business’s inventory management system. These tags can be read automatically, giving manufacturers and partners further down the supply chain valuable data to help them make the best business decisions. 

Warehouse Management

Warehouses might be stopping points between manufacturers and customers. But they also play a vital role in the supply chain in terms of order fulfillment. RFID has emerged as a critical component of efficient warehouse operations. 

Warehouses can use RFID technology to automatically record incoming and outgoing products. The technology can also be combined with other solutions, like automated picking and packing and voice solutions for warehouse operations. 

Retail Sector

221129-how-rfid-is-transforming-the-supply-chain-1RFID technology continues to be a revolutionary tool adopted by the retail industry. This country’s largest retailer, Walmart, continues to use RFID tags to keep up with massive consumer demand. 

RFID helps retailers with inventory control, which boosts customer satisfaction. This technology also helps improve the checkout experience because an RFID reader can scan an entire cart of products without requiring a human to pick up a single item. 

Benefits of RFID Technology for Supply Chain Partners

Supply chains have been suffering from a variety of issues since the start of the COVID-19 pandemic. Even though the economy has shown signs of recovery, supply chains must continue to innovate to prevent similar breakdowns in the future. Organizations adopting RFID technology are realizing a host of lasting benefits. 

Asset Visibility

With RFID technology, supply chain partners never again have to wonder where their shipments are in the supply chain. They get real-time data about location and other aspects of products, so managers and employees know the amount and location of every asset. Improved visibility allows businesses to resolve issues that result in mistakes, oversight, and misplaced materials during manual processes. 

Labor Reduction

One of the major challenges in the supply chain is labor shortages in various sectors. RFID allows businesses to automate certain processes, which can reduce the need for manual labor. For example, RFID tags are read automatically, which makes inventory control a seamless process. 

Technology Integration

221122-allowing-visibility-to-become-trust-in-deliveriesRFID can work as a standalone technology. It can also integrate seamlessly with other technology solutions, like warehouse management systems (WMS), voice solutions, and blockchain. 

Theft Mitigation

Some industries struggle with theft issues at various points in the supply chain. But, using RFID tracking devices on products, supply chain managers and partners can keep eyes on their products 24/7 when they are being transported and stored. This can reduce theft and improve the apprehension of bad actors when criminal activity occurs. 

Productivity Enhancement

When RFID is introduced into the supply chain, it enhances productivity for workers. For example, RFID is ideal for telling warehouse workers whether their stock is at an optimum level or in danger of running out. An RFID tag can also notify workers of temperature changes or record location changes when products are picked and packed for order fulfillment purposes. 

RFID has proven to be a game-changer in tasks like identifying, tracking, and maintaining objects within the supply chain accurately and efficiently. This technology has produced profound results for supply chain partners in every industry. By implementing RFID into the workflow, businesses achieve greater visibility and increase collaboration, improving overall results in the short- and long term. 

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Topics: RFID, Inventory Managment, Supply Chain

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