Let’s face it, the modern industrial age thrives on data. Data has led to process efficiencies that could only be dreamt about 30 years ago. It has helped us develop paths for better communications, innovated warehousing and inventory management, and increased visibility into the entire supply chain which has made concepts like “just-in-time” and “lean” a possibility. However, data-driven decision-making is strengthened or weakened by the integrity and timeliness of data, a continuous challenge that whole departments of employees usually have to manage before the data can be useful for decision making. For supply chain and logistics, RFID is revolutionizing the industry and providing immediate insights into company supply chains and into the future of their companies.
What is an RFID?
Radio Frequency Identification, or RFID, is a method of communication that helps relay information via unique magnetic signatures that are “programmed” to the ID tags. The RFID’s unique magnetic field can be detected by “readers” at up to 30ft, with incredible accuracy and speed. The reader can handle thousands of tags in at any given time, allowing users to gain immediate insight into current inventories, products in transfer, and endless amount of metrics based on the creativity of the manager and the consultants.
How is RFID applicable to Logistics and Supply Chain Managers?
Per a 2015 study conducted by Zurich and the Business Continuity Institute, 70% of “Supply Chain Managers” lacked visibility over their whole supply chain, making their businesses more susceptible to disruption, the top risk identified for four consecutive years by the Allianz Risk Barometer. Whether managing risk, improving performance, increasing quality, minimizing losses, or increasing visibility for decision making, RFID is a powerful system to ensure your data is accurate and timely.
With RFID’s there are many potential scenarios for data tracking, that it really comes down to the creativity of the managers. But some key application benefits are:
- Real-time tracking of shipments
- Inventory management
- Minimizing errors that may cause supply chain disruption
- Minimizing impacts of recalls or production errors by isolating the timestamp of the production errors to the impacted items, or to the goods that were found to be defective.
- Reducing theft and inventory loss
- Meet compliance standards which require transparency throughout your entire supply chain
- Pre-designed Alerts and Workflows designed to ensure Managers are notified about key issues and/or decisions
What do you need to implement RFID?
The answer is multiple items, but this depends on your goals. The basic setup is an RFID reader that is positioned where you desire to collect data or track an item’s location. RFID readers are able to read up to a 30ft distance, so to ensure your data is accurate and meeting the goals of your program, you need to ensure the coverage of readers is effectively designed to read the tags at their key tracking locations. The next are the RFID tags located on the goods, package, or components that you are wanting to track. You will also need the software necessary to interface with the readers that contains the RFID data and coordinates the data into your software and/or database systems. Lastly, you will need a network that connects all these systems together, i.e. wifi, internet or a cellular connection. The components are oftentimes purchased in isolation, which tends to be costlier due to implementation and scalability, or with systems that are pre-integrated and are scalable based on your growth or implementation.
Tracking shipments of components or final goods
Depending on your control over your supply chain, data tracking attained by shipments and processes through RFID can be quite robust. Let’s say you have a manufacturer overseas that is working on a widget that will be shipped to for assembly at your U.S. plant. If you can implement partner end-to-end tracking, imagine the following setup:
Tagging the Goods
The RFID tag can be placed on the item individually or on the box that is being shipped. The choice here is really based on the type of tracking that is needed and the costs associated with the RFID tags added into the process. Conducting an ROI assessment will be tantamount as a variety of factors can lead to cost viability, such as minimizing lost or stolen goods, eliminating counterfeits, minimizing impacts of recalls, reducing labor hours, maximizing efficiencies, and increasing customer satisfaction.
Accurate Tracking of Outbound Goods
For tracking outbound goods, the readers can be placed around the loading bays of the outbound trucks. When the tagged goods reach the loading location, the RFID readers will automatically log the movement of the tagged boxes or goods and note when the items are loaded and when they exit the facility. Here are some examples of information and benefits can be gained by tracking the outbound goods:
- Accurate tracking and inventorying of goods being shipped
- Ensuring the correct goods are loaded on the correct truck via automatic notifications
- Verification that shipment orders are complete by auto-logging against the manifest
- Reducing manhours by automating logging of outbound goods against inventories
- Depending on your RFID reader coverage, automatically locate goods for transport to loading bays whether stored in their correct location or if misplaced
Freight and Shipping
If your goods are being shipped via freight or cargo ships, then RFID can be a good solution for ensuring your shipments are received and transported. Working with the transportation company or if inhouse, you can place RFID readers at key locations to determine if your trucks have entered the facility and have delivered their cargo. The trucks can be scanned as they enter the shipping site and the contents can be verified against the manifest. This ensures the entire cargo was received and did not exit the facility.
Once the shipment reaches its location, RFID readers will ensure the contents are checked, the quantities are verified, and the shipment is loaded on the correct truck and sent to the correct location. Additionally, the time the delivery took to get from the outbound loading bay to the shipment yard can be tracked based on time of exit to time of delivery.
Inbound and Receiving
When the truck arrives at the warehouse, distribution center, manufacturing plant, retail location, etc. RFID readers will log the shipment arrival at the loading bays, verify the contents, ensure the quantities are accurate, and log the items into the inventory database. Once received, the forklift operator or receiving team will notified automatically where the tagged goods storage locations are and send them straight from the loading bay to the correct receiving location.
Monitoring and Tracking the Received goods
Once the shipment is received, a variety of workflows can take place, depending on the time-sensitivity of the tagged goods. Here are a few examples:
Warehousing and storage: If the goods are to be stored, data will be collected about the item that may be highly valuable. If the goods are perishable, the storage date and time-on-shelf can be tracked and managed to ensure spoilage does not occur. The location of the goods can also be logged and traceable via mapping systems that can be integrated with the RFID system software, ensuring that they can be easily found and located, even if accidentally misplaced.
Manufacturing: If the goods are needed on the assembly line, the production manager will be notified automatically of the goods arrival, so the manager can prepare her/his team to receive and process the items for use. This can lead to immediate production efficiencies and effective resource allocation based on real-time data.
Retail: When the items arrive, the items will be automatically logged into the store’s inventory and will notify the managers immediately. Once onsite, the inventory can be tracked throughout the entire store, ensuring the goods are correctly placed, and remain onsite until purchased or transferred.
Importance of Encouraging Partner End-to-End Adoption
The more RFID is embedded throughout your entire supply chain, from manufacturers to logistics providers to retail customers, the more effective your tracking and data will be. Much of the scenarios discussed in this article are based on the ability to implement RFID tracking systems throughout your supply chain, including your suppliers, logistics providers, and retail customers. Encouraging the adoption of these systems will help gain efficiencies clear across all of your partner companies’ operations and help mitigate unnecessary labor, costs and inefficiencies.
RFID is giving managers new insights into their supply chain and providing data that is clean and reliable. Managers are able to make effective data-driven decisions that fit real-time on-the-ground scenarios to minimize lost time and costs. RFID systems are giving customers higher quality service, while helping streamline processes throughout the entire organization.