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In this article, we’ll dive into the role of Radio Frequency Identification (RFID) technology in supply chain management, demystifying its importance, potential benefits, costs, and challenges. We’ll discuss how RFID can solve significant supply chain problems, highlight its diverse applications in various sectors, and provide insight into real-life case studies to illustrate the technology’s effectiveness and versatility.<\/p>\n
Key Takeaways:<\/strong><\/p>\n RFID in supply chain: an unnecessary expense or the answer to all your supply chain management problems?<\/p>\n <\/p>\n RFID offers exciting possibilities. It solves some of the biggest problems in supply chain management, like:<\/p>\n Of course, RFID tech is an up-front investment and it\u2019s not a cheap one. The cost of RFID has come down significantly over the past couple of decades<\/a>, making it more attractive for downstream retail operations. However, it\u2019s still important to assess exactly how RFID can deliver the most bang for your buck.<\/p>\n Before implementing an RFID solution in supply chain, assess your budget and define your business goals and priorities.<\/p>\n Approaching RFID this way helps you process all the dazzling applications of RFID in context. Because the truth is: RFID is pretty cool, and it brings the serious potential to transform your business, but it all comes at a cost.<\/p>\n <\/p>\n In this guide, we\u2019ll help you understand:<\/p>\n <\/p>\n <\/p>\n BONUS:<\/strong> Before you read further, download our Warehouse Management Whitepaper to see how Logiwa uses real-time data to help you get up to 100% inventory accuracy and execute advanced fulfillment strategies like wave planning.<\/a><\/p>\n RFID uses radiofrequency waves to transfer data wirelessly and without contact.<\/p>\n So, what\u2019s the difference between RFID and barcodes?<\/p>\n A barcode is a set of black and white lines, which represent information. A barcode has special anatomy that, when scanned with a laser, allows computers to make sense of it and understand the difference between a box of cake mix and a box of brownie mix.<\/p>\n Functionally, barcodes are different from RFID scanners because the scanner needs a line of sight to the barcodes. RFID scanners don\u2019t need a line of sight\u2014they communicate with the RFID tags on items without needing to see them individually.<\/p>\n This alone is a mouthwatering proposition for warehouse managers and global supply chain executives. Imagine slashing your receiving time by checking inventory without<\/em> opening every box to scan individual items or being able to easily track fast-moving goods in your warehouse. An RFID tag ensures a manufacturer can track every single part it uses in its goods, providing visibility over every moving part in the supply chain.<\/p>\n The wondrous world of RFID tech extends well beyond supply chain management.<\/p>\n At Wells Fargo data centers, RFID scanners in laptops indicate whether a computer is leaving with its rightful owner, preventing data breaches and thefts. At a chain of popular kaiten-sushi restaurants in Seattle, where dishes circle on a conveyor belt for customers to grab, the owners use RFID to keep tabs on the freshness of food circling around. Meanwhile, a legal office in Washington D.C. uses RFID tags to manage more than 20,000 paper files.<\/p>\n In other words, RFID, with its multitude of uses, helps companies maintain control in a chaotic, fast-moving world.<\/p>\n The supply chain consists of four elements<\/a>, each of which presents an opportunity to leverage RFID technology:<\/p>\n Good integration\u2014communication and information sharing\u2014 is key to a successful supply chain, especially a global supply chain. Failing to integrate your supply chain is like trying to run a restaurant where the servers have to fill out four forms to submit an order to the kitchen staff. It makes no sense, and it won\u2019t get you very far.<\/p>\n It\u2019s simply ludicrous not to integrate your supply chain. The easier it is to share information between suppliers, warehouses, and transportation companies, the smoother your supply chain moves goods. A tighter supply chain is a stronger supply chain.<\/p>\n With RFID technology, sharing and accessing data is easier. RFID tags allow organizations to quickly account for goods in transit and capture data about them, which is then shared with other supply chain partners.<\/p>\n Some companies require suppliers to use RFID technology, making it a worthy investment for businesses who want to win bigger clients.<\/p>\n Even so, RFID technology is not a perfect solution for integrating supply chain operations in every industry.<\/p>\n For example, in 2003, Wal-Mart mandated all suppliers include RFID tags on its shipments within 18 months for its top 100 suppliers and by the end of 2006 for its remaining suppliers. The project ultimately failed, primarily because there didn\u2019t seem to be a discernible benefit. Since RFID doesn\u2019t pass through metals and liquids, the highly accurate read rates promised by RFID tech didn\u2019t materialize.<\/p>\n In other words: It didn\u2019t seem all that much different from barcodes.<\/p>\n RFID technology is well suited for industries whose products don\u2019t interfere with RFID readability, such as:<\/p>\n Day-to-day operations can make or break a company\u2019s supply chain. A famous quote captures it like this: \u201cWe are what we repeatedly do. Excellence, then, is not an act, but a habit.\u201d Supply chain managers who focus on excellent day-to-day operations build a supply chain that is greater than the sum of its parts and that achieves two key objectives simultaneously:<\/p>\n Performance data allows supply chain managers to understand how well they are functioning on a daily basis. Which processes are improving worker productivity? Where are more processes needed? Where are there unseized opportunities?<\/p>\n RFID scanners help companies easily monitor how goods move through their warehouses. Inventory management becomes significantly more efficient since companies receive real-time information about what\u2019s in the warehouse, what\u2019s on its way to the warehouse, and what\u2019s been sent to customers.<\/p>\n RFID integrations with supply chain management system<\/a> allow enterprises to receive real-time information while integrations with warehouse control systems (WCS) provide the future possibility of drone<\/a> capabilities. What could this look like? Essentially, drones would fly around warehouses capturing data from a few centimeters away to keep track of inventory. While we\u2019re still some time away from widespread adoption of this practice, it\u2019s an exciting indication of the potential of RFID technology in warehouses.<\/p>\n Zara is an example of a well-known company that\u2019s used RFID tags to achieve operational excellence. As a fast-fashion retailer, Zara\u2019s entire business model relies on its ability to deliver cost-effective alternatives to trendy, pricier pieces. One of the major drawbacks of this business model is that trends come and go, but suppliers may need a few months\u2019 notices to produce enough inventory.<\/p>\n To keep track of its massive inventory in real-time, the global retailer uses RFID tags across the supply chain. Zara encodes garments from the manufacturing stage, enabling end-to-end tracking. Inventory managers can easily check whether items are out-of-stock, while also enabling Zara to respond quickly to fast-selling items and produce more. It\u2019s also worth mentioning that Zara manufactures its own clothing.<\/p>\n <\/p>\n\n
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A Rundown of RFID Technology<\/h2>\n
How Businesses Incorporate RFID Into The Supply Chain<\/h2>\n
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Integration<\/h3>\n
When RFID Fails<\/h3>\n
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Operations<\/h3>\n
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RFID and Fast Fashion<\/h3>\n