Monday, November 24, 2014

Implementing RFID in Supply Chain

RFID has become a revolutionary technology in supply chain management. It is not just a replacement for barcodes. RFID ensures that the right goods are available in the right place with no errors. It makes the supply chain considerably more precise and improves the efficiency and reliability of the entire process. As real-time information is available because of RFID, administration and planning processes can be significantly improved as well.
RFID in Production
The market of fast moving consumer goods (FMCG) is one of the fastest moving markets in the world. In this industry, products have to be counted several times already in the manufacturing process: during the stages of production, washing, and packing.  Traditionally, these operations are performed manually. But by utilizing RFID tags and readers, products can be counted in seconds. This is due to the fact that RFID tags can be automatically scanned without having to be put in a line and multiple tags can be scanned simultaneously. For manufacturers, this directly reduce the costs as labor intensive tasks can be carried out faster and more accurately.
In addition to faster validation of produced goods, manufacturers can also benefit from increased information gathered with the help of RFID. RFID tags can store far more information than barcode labels. This information can be used to optimize production processes. Accurate knowledge of the real-time movements of raw materials and the time needed for specific production steps can be integrated into efficient production planning.
RFID in Inventory Management
Once production has been completed, FMCG producers pack the products into cartons, and deliver the cartons to the warehouse of the freight forwarder or the buying company. After the cargo reaches its destination, it is not uncommon that it ends up in a warehouse first.
Keeping track of the large number of cartons is a very complex and time and labor consuming process. However, RFID can be implemented to mitigate this situation since it can improve information management. Usually, read-write equipment is installed at the entry to a warehouse. Every cargo unit is equipped with RFID tags and all the information relating to the tags is stored in the central computer of the warehouse. When the cargo is moved in or out of the warehouse, the read-write equipment registers it and forwards the data to the backend system. This allows the management center to manage the huge amounts of products going into and leaving the storage, recognize cargo and help with placement of the cargo in the warehouse.
The information that is gathered with RFID can lead to significant improvements as the tracking and handling of the products can be done in real-time and with great accuracy. In the warehouse, products are easily located as all product movements are tracked and this information is automatically registered in the system. While stock is accurately tracked valuable information concerning losses is also recorded.
RFID in Shipping and Distribution
Around the world, the most popular way to transport large amounts of cargo is to use shipping containers. Container transports are oftentimes chosen as they ensure safe and secured transportation, low costs, standard packaging and high transport density. Companies that use RFID in tracking and managing of shipping containers are able to track containers in each link of the supply chain. Active RFID Tags can be used to track containers in real-time in anywhere. Ultra-high frequency RFID technology has long identification distance and speeds up identification.
Implementation of RFID technology can also add advantages to distribution processes. Usage of RFID will greatly accelerate the speed of delivery management, improve efficiency, and increase accuracy in selection and distribution processes. It will also reduce distribution costs. When products marked with RFID tags enter a distribution center, the RFID read-write equipment at the entry gate can register the RFID tags, and send the information to the distribution centers' backend system. This information can be used to put the cartons in proper places, sort them quickly and efficiently, and dispatch the cartons to the retailing centers in less time with improved accuracy. Usage of RFID also ensures accurate inventory control.

[1] Barcode & RFID in Supply Chain Putting the Pieces Together.

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