RFID Technology in Logistics

The advantages of RFID technologies enable it to boost the efficiency of logistics, manufacturing, warehousing, and distribution in the modern era of supply chain automation. RFID is an abbreviation for radio-frequency identification. The technology has been around for decades but only recently has it started to be used to automate a wide range of logistics activities. RFID is here to stay. As costs reduce and new technologies advance, RFID will increasingly be used in logistics supply chain management worldwide.

The basic function of RFID in logistics is to track products as they move from point A to point B. Once the product is in transit, it can be scanned using a transponder and then tracked via a computer terminal or a cellular phone. Depending on the RFID system being used, information such as the date it was purchased, the serial number and the company the item was purchased from may be accessed. For some companies, this information is accessible by consumers via the Internet, while for other businesses, this information is accessible only by authorized employees. In addition, because of RFID’s ability to transmit data at high speeds, costs associated with tracking are dramatically reduced. This means that RFID in logistics is fast becoming an important component of the supply chain.

Most significant advancements in RFID technology have come from developments within the software systems used by logistics companies. These software programs enable real-time tracking of shipments and allow for the real time updating of inventory, pricing and location of inventory. With this improved ability to instantly locate and update inventory, supply chain managers are able to better handle their logistics businesses.

Tracking of goods as they enter and leave a distribution facility helps managers manage their inventory more efficiently. With the ability to rapidly identify each product as it is checked in and shipped out, companies are able to increase their overall efficiency. By using handheld devices or printers, they are also able to print out custom tags for each particular item. In addition, to improving efficiency, the printing process is also a cost effective way to label and track items as they enter and leave the warehouse. While these improved systems may seem costly to implement at first, the long term savings realized on overhead and labor costs greatly offset any initial capital outlay. Once these initial costs are recovered, the increased efficiency and productivity translate directly into financial profits.

For the logistics industry, RFID is not the only technology that is proving beneficial. Improved bar code technology is another application that is gaining popularity among distribution facilities. Bar coding is a method of manufacturing product inventory that verifies the bar code, which is located on each product, for each unit of product that leaves the plant. This system helps reduce fraud, as products are sold based on their unique bar code rather than on quantity.

While RFID has proven useful for numerous applications in the logistics industry, its real-time capabilities have an additional advantage. The ability to quickly obtain detailed inventory data, even of the most distant shelves in a warehouse, is another advantage of RFID. This capability allows for the rapid identification and tracking of out-of-date or otherwise lost inventory. In addition, RFID can be programmed to send out real time alerts when inventory reaches a certain threshold. When this threshold is exceeded, the alarm is triggered, and action is taken to replenish or otherwise replenish the inventory, as per normal procedures.

RFID does present some potential threats to the logistical systems of a facility. Some RFID applications, such as automated replenishment, present the possibility of a “top-down” inventory management approach. This means that because RFID tags are not attached to individual products, it is easy to allow for fraud or for merchandise to be moved from one shelf to the other while inventory is not being verified. Additionally, RFID may prevent timely delivery of goods due to the time required to scan barcodes and verify the validity of the goods being transported. These concerns are particularly important in light of the increased frequency with which international shipments are delivered these days.

Overall, the benefits of RFID in logistics seem to outweigh any drawbacks that it may have. With an increasing number of goods being shipped internationally and the possibility of fraud, tracking of product and inventory can easily be managed using an RFID system. Additionally, efficient, real-time inventory management is possible thanks to RFID, and the potential for automated replenishment of product is also becoming more prevalent. It is likely that RFID will continue to become a part of the logistics landscape for years to come.