In recent years, technological innovations have revolutionized supply chain management at all levels. One tool that’s becoming increasingly common and useful is Radio Frequency Identification (RFID).
RFID involves embedding information into a tag — everything from location data to order information — that transmits the information wirelessly to a dedicated reader. The information on the tag can be updated and transferred into any receiver, and integrated into other software programs, providing unparalleled information and insights into the supply chain. For example, RFID tracking provides real-time information about the whereabouts of stock at every point from the time an order is placed until it leaves the warehouse, reducing reliance on time and location tags within the warehouse.
Although RFID is still in the relatively early stages of development and use, it’s already leading to significant improvements in supply chain. Here are some of the ways that’s happening.
The Benefits of RFID to Supply Chain Management
Improved Inventory Visibility
Warehousing accuracy has improved significantly in recent years, and RFID is making it even better. In the past, shipments arriving in the warehouse needed to be manually checked in, sorted, organized, and then checked out when shipped. With RFID, much of the human element is removed from the equation. Scanners automatically track every item as it enters the warehouse, recording it’s exact location. When the tagged items are shipped out, that’s also tracked automatically, ensuring that all inventory is updated in real time and And when that system is effectively integrated with others, inventory shortages, backorders, and other problems are reduced or even eliminated. Surely, this can help you enhance inventory visibility and improve your company warehouse as a whole.
Reduced Loss and Theft
Loss and theft, or shrink, are problems in almost any warehouse or shipping operation. Sometimes, items are simply misplaced, only to be discovered later. Other times, items are stolen, by employees, burglars, or while in transport. Regardless of the reasons why or the culprits, the effect on the bottom line remains the same.
By implementing RFID, the likelihood of lost or stolen items decreases. The technology can track the location of any item in the warehouse, even if it’s in the wrong spot. And should items be stolen, it’s quickly detected. This allows for logistics to handle the issue, ensuring accountability within the organization. RFID helps you maximize efficiency in the workplace by minimizing human error, will have a significant impact on the supply chain down the line. Instead of relying on manual, analog processes to track and manage supplies, digital tools ensure that stock is counted correctly and placed where it belongs, preventing shortages, loss, and inefficiencies.
Companies lose thousands of dollars every year due to damaged shipments. By using RFID tags that provide location data with temperature sensors, impact and vibration sensors, and more, logistics managers can more easily identify when shipments have experienced conditions that could potentially cause damage. For example, medical equipment cannot be exposed to extreme temperatures or extended periods of vibration. Using RFID, it’s possible to determine whether the shipments have been compromised, and take proactive measures to handle the issue.
Food safety is also improved with the use of RFID tags. Manufacturers have implemented the technology to monitor food processing from harvest through shipment and delivery, making sure that it’s handled safely and appropriately. Should an issue arise, the data from the RFID tags can be used to investigate the source, and make corrections as needed — even preventing tainted or damaged business inventory from reaching store shelves.
Damage isn’t the only shipping problem that can drive up overhead. When shipments are incorrect, and need to be returned or require additional shipments to make up shortfalls, the costs can add up quickly. Incorporating RFID tags into the items adds an extra layer of accountability for shipments, identifying shortfalls (or overages) at both the carton and pallet level before they even leave the warehouse. This level of quality control increases customer satisfaction in addition to reducing your overhead.
Improved Employee Productivity
Of course, RFID technology can help you greatly boost employee productivity across your supply chain. Using RFID, employees no longer have to waste time conducting manual, labor-intensive processes. For example, RFID technology can help staff members with scanning barcodes, looking for misplaced resources, and calculating inventory amounts. Certainly, this helps you amplify task speed, escalate project turnover, and reduce labor costs throughout your facility. Moreover, this innovative technology can greatly increase organization by eliminating manual procedures in your business.
RFID is still in the relatively early stages of implementation, and has a ways to go before it’s used across the board within logistics and supply chain functions. However, with its potential to streamline and improve the accuracy of warehousing and shipping functions, it’s likely to revolutionize supply chain management going forward.