RFID (radio frequency identification) is poised to bring greater intelligence and productivity to the supply chain.
This is according to Jane Thomson, MD of Softworx, who says that RFID offers benefits such as the ability to automate inventory handling and reduce labour; facilitation of the flow and exchange of data as it moves through the supply chain from point of production to point of consumption; the provision of real-time status and visibility, improved service levels, reduced loss and waste, and improved safety and security.
“RFID technology is enabled by a combination of RFID tags and an open, global network for identifying goods with those tags. With microchips embedded in various types of media, companies can track any type of good that has an RFID tag attached to it, regardless of where that product is in the product life cycle or its location in the supply chain,” says Thomson.
She says RFID goes beyond barcode technology by bringing greater intelligence and productivity to the supply chain.
“It is an “always-on,” pervasive technology that allows supply chain partners to gain visibility regarding where their products are in the supply chain.”
Unlike barcode readers, which Thomson says can only read one tag at a time, RFID can read multiple tags automatically at the same time, which in turn improves productivity by eliminating manual scan processes.
Plus, RFID provides the ability to track inventory at the item level providing intelligent realtime inventory status.
She says vendors are recognising the importance of RFID technology in optimising supply chain performance and have taken the initiative by building RFID capabilities into supply chain solutions.
But, as much as we can wax lyrical about the technology, Thomson says it has to impact the bottom line and assist organisations to reduce costs, increase turnover and gain a competitive edge.
“It is only when this happens that customers will be truly interested in what technology such as RFID has to offer. If they can see a difference, companies will be far more compelled to examine existing business processes and reinvent or realign them to take full advantage of a new technology.”
Industry experts believe that much of the impetus for future waves of innovation in RFID can be credited to the mandates set forth by major retailers around the world. These mandates have created a ripple effect across the entire supply chain industry.
Mandates have caused all supply chain partners including manufacturers, packagers, distributors, logistics and transportation agents, retailers, and wholesalers to examine ways in which they can improve the efficiency of their own supply chain systems.
The general feeling is that RFID technology is already gaining good traction in certain areas of the supply chain such as warehouse management and inventory control.
However, most feel that we are far from a fully integrated supply chain model.
Although many technology and business leaders across supply chain enterprises agree that RFID offers tremendous promise, some argue that their short term return on investment does not justify the initial cost of adoption-process re-engineering, re-tooling, and integration.
Others are hesitant to make decisions without stronger standards, and most worry about privacy and related public relations issues.
Despite these concerns, analysts have predicted tremendous growth for RFID in supply chain management during the next several years.