RFID is an incredibly versatile technology, with applications from one end of the supply chain to the other. Short for Radio Frequency Identification (RFID), these tags and readers save and transmit data through radio waves about an item, such as a product #, expiration date, manufacture date, temperature, and more.
The technology has evolved quite a bit since its first application many years ago. Now major brands and retailers like Walmart, Amazon, H&M, and Nike use RFID tags to track inventory and provide a better customer experience. Here are the benefits of RFID and how this technology helps supply chains - from one end to the other.
The Benefits of RFID for Supply Chains
Before running through how RFID is used in the supply chain at different stages, here is a broader list of benefits that this technology offers to supply chains.
1. Better Inventory Management
One of the biggest challenges online retailers and warehouses face is inventory management. RFID systems offer a fast and reliable way to keep track of how much of each product you have in stock. When integrated with a warehouse management system (WMS), you get real-time data about your inventory levels and can even set up automated reordering.
2. Improved Asset Tracking
In the same way you can track inventory, RFID tags also enable a business to keep track of its assets. Whether it is forklifts, handheld tablets, or packaging materials, this solution can prevent loss or theft as well as issues that arise when you run out of vital materials that support the business.
3. Saves Time
RFID is one of the building blocks for automation. Combined with RFID scanners and a WMS, a well-designed system can eliminate some of the labor-intensive tasks in a business, such as recording incoming or outgoing products.
4. Boosts Accuracy
When data is recorded manually, there is a greater chance of human error. RFID technology avoids errors in transcription, missed items, and duplication of data when it is used for data collection.
5. Enhances Health and Safety
An RFID system allows organizations to verify when vehicles and equipment have been serviced or inspected, even restricting the equipment’s use when a list of conditions aren’t met. This is an ideal way to manage assets, comply with various regulations, and improve the overall health and safety record of the business.
6. Better Production Control
Because RFID has the ability to identify individual components or items, it’s the perfect system for customized or complex storage and manufacturing processes. This helps improve efficiency and reduce waste.
7. Improved Traceability
There is a growing need for more visibility and transparency in the supply chain. Consumers want to know where their stuff comes from and even track shipments from the warehouse. Retailers and distribution centers likewise require more visibility to address bottlenecks in the supply chain and provide a better customer experience. RFID technology can provide real-time data about an item’s location.
8. Shorter Processes
RFID technology can be integrated with other supply chain and manufacturing technology - such as automated picking systems and voice solutions - to reduce the time it takes to process and deliver orders.
9. More In-Depth Insights
Because all stakeholders can get access to data in real-time with RFID, this provides businesses with more in-depth insights about product movement and trends. Businesses can use this information for strategic planning.
10. Increased Revenues
By improving inventory management, boosting efficiency, and creating a safer workplace, employers can reduce costs, improve customer satisfaction, and achieve better margins.
How RFID is Used at Each Stage of the Supply Chain
An end-to-end view of the supply chain using RFID means just that - the technology is used everywhere, not just in the warehouse. Here is how RFID solutions can be employed at each stage of the supply chain.
Items at the manufacturing level can be encoded with RFID tags, where the tracking can begin. The first read even happens when the item is tagged, and data is entered about it. As items are checked for quality at the factory, they get scanned again. And a final scan happens as the products leave the factory and begin the journey to the warehouse or distribution center.
Warehouse / Distribution Center
A warehouse is the foundation of an eCommerce business. When goods arrive directly from a factory or third-party distributor, the RFID tags are scanned automatically at the receiving dock. This allows for instant reconciliation against inventory order lists.
Within the warehouse, RFID tags play a vital role in the picking and packing process. Workers can use technology solutions like wearables and voice devices to automate some of these activities. Using a warehouse management system, the solutions tell the worker which items to pick and pack as well as where those items are located.
As soon as the worker acknowledges the completion of a task, the system updates the processing status. A final scan happens as items move through the shipping area and begin to make their way to the store or the customer.
Store or Customer
Whether products are going to a retail outlet or the customer, RFID provides real-time tracking throughout the shipping process. Once the item(s) arrive at the destination, a final confirmation is done for inventory accuracy and to provide the best possible customer experience. In the case of retail outlets, this data is useful for inventory control and to provide real-time data to customers about product availability in the store.
What is Involved in Implementing RFID Technology?
RFID technology has been in use by businesses for decades. But the technology has recently become a go-to solution for supply chains that wish to improve efficiency, boost visibility, and drive better overall results. RFID systems also make it easier to make important decisions about inventory and the overall business because of the availability of insights.