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6 examples of RFID supply chain use cases
RFID tags can help improve inventory management, product and asset tracking, goods authentication and cross-docking. Learn more RFID in supply chain examples.
RFID has long been a useful tool for better supply chain management. It still is.
While RFID is a comparatively older technology, industry analysts predict RFID use in the supply chain will keep growing. To understand why RFID is a powerful tech, it helps to understand where companies employ it. Organizations use it for inventory management, goods and asset tracking, returnable asset tracking, authentication of goods and cross-docking.
An RFID system is composed of a transponder, which is the RFID tag; a scanning antenna and a receiver, which are usually put together to create a reader; and the network that stores data and sends it to wherever it's needed. RFID tags have various supply chain applications.
Over the past decade, the cost of RFID tags has dropped as their accuracy has increased, which has led to positive ROI for companies that invest in the technology, said Abdil Tunca, senior principal analyst in the logistics and customer fulfillment team at Gartner.
Learn more about how companies can use RFID tags to improve their supply chains.
1. Inventory management
RFID tags enable real-time visibility into the specific items in a facility, which can give workers more insight into information about products, such as products' locations and their movements.
RFID tags also make it possible for workers to access that data without needing to walk to a different section of a warehouse to find the item.
Inventory management is one of the most common supply chain-related use cases for RFID, Tunca said.
Possessing insight into item locations can help supply chain leaders carry out better operations planning as well.
Amber Schwiesow, vice president of procurement and supply chain at a telecommunications company and board member of the Association for Supply Chain Management, said her company uses RFID tags to verify which high-value assets are in which facilities at a given time. The data helps ensure that employees have access to the right items when needed so they can fulfill their work orders.
2. Goods tracking
RFID tags are also helpful for tracking goods over longer distances.
Organizations can use RFID tags to track individual containers filled with goods as the containers are transported across oceans or long stretches of land, Tunca said. Supply chain leaders could also decide to track each item if the items are high value enough to warrant the cost of so many RFID tags.
RFID tags could help provide supply chain managers with peace of mind.
Supply chain managers can use RFID tags to gain more insight into products' locations when the items are being handled by third parties, such as customs brokers and third-party logistics carriers, said Jonathan Colehower, managing director of the global operations and supply chain practice at UST, a digital transformation software provider located in Aliso Viejo, Calif.
3. Asset tracking
RFID tags can give insight into not only the location of warehouse equipment, but also its past use history, as well as its upcoming maintenance needs.
When RFID is combined with analytics and other IoT technologies, RFID can store and transmit data about where and how equipment is used, Tunca said. The data can reveal information, such as the need for upcoming maintenance for a forklift.
The data can also provide insight into how warehouse employees are using the equipment so their supervisors can issue corrections if needed, he said. For example, the data may reveal that workers are using a forklift for a certain task when a more energy-efficient pallet jack does the job better.
This, in turn, can support corporate sustainability efforts.
4. Returnable asset tracking
RFID tags can provide insight into the location of items that are supposed to be returned to their company.
Some supply chain managers are using RFID-enabled systems to track reusable assets, such as bins, containers and pallets, that are often shipped with inventory to other destinations with the expectation -- and agreement -- that the recipients return them, Tunca said.
"In a warehouse environment, most of the time, these items aren't returned when they should be," he said.
RFID can help save the company money by increasing the chances that the items are returned.
5. Authentication of goods
RFID tags can help confirm the authenticity of products.
When a person scans an RFID tag for a product, the tag can confirm that an item came from a certain manufacturer and show its origin point.
This use of RFID technology is most commonly found in the pharmaceutical industry, Tunca said.
6. Cross-docking operations
RFID tags can potentially be helpful during the process known as cross-docking, in which goods that are received at one dock are immediately shipped out to waiting vehicles on another loading dock, bypassing the warehouse.
Cross-docking has gained popularity as supply chains have grown more complex.
The process can be challenging, but RFID tags' insight into products' locations can help ensure that items are sent to their correct destinations, Tunca said.
Mary K. Pratt is an award-winning freelance journalist with a focus on covering enterprise IT and cybersecurity management.
