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7 benefits of RFID in supply chain management and logistics

RFID can help companies in their supply chain operations by assisting with product tracking and potentially improving product availability. Learn some of RFID's other benefits.

RFID has existed for many years, but the technology still has applications today and can potentially help companies improve their supply chain operations.

RFID provides logistics managers with multiple ways to track and manage products and assets in the supply chain. RFID tags and scanners can potentially improve product and materials handling inside and outside the warehouse environment, with applications ranging from inventory management to automation.

Here are some of the benefits RFID can bring to the supply chain. 

1. Improves product tracking through WMS integration

Warehouse management systems (WMSes) track the receipt, storage and distribution of goods. A WMS stores data about inventory levels, product locations, reordering details and other information that users may require for supply chain management.

Users can integrate RFID technology with a WMS to potentially make product tracking faster, easier and more accurate. When goods arrive in a warehouse, employees can use an RFID scanner to scan the goods on each pallet and add the new stock to the WMS. As employees store products in the warehouse, they can scan the product and the bin number to enable location tracking. In addition, when pickers select goods, the pickers can scan each RFID tag, then mark the item as leaving the distribution center.

2. Improves product handling efficiency

RFID tags can also help with route planning and goods handling within and between supply chain locations.

Warehouse employees can put RFID tags on logistics assets like trucks, containers, forklifts and other material handling equipment so workers know the location of equipment at all times and can quickly retrieve it to transport products.

3. Increases inventory counting speed

RFID tags and scanners can help speed up inventory counting and reconciliation, because warehouse employees can use handheld RFID devices to easily and accurately scan RFID tags. Some scanners count tags one-by-one for every individual item, while others can near-simultaneously count all the tags in a particular location. 

Faster and more frequent inventory counting can result in more accurate inventory management as well.

4. Helps fix incorrect inventory counts

RFID technology makes it easier to identify the source of issues with receiving, storing or distributing products. Warehouse employees can use RFID to trace an individual product's movement and investigate why a discrepancy occurred. For example, if an employee stored an item in the wrong location, an RFID scanner may identify the tag elsewhere and alert the user. 

Since RFID provides information about how the problem occurred, it can potentially help warehouse managers take steps to prevent the issue from recurring.

5. Helps improve product availability

Today's customers expect all goods to be available at all times, and combining consumer demand information with RFID's product tracking can help suppliers ensure their products will be in stock when needed.

Suppliers, manufacturers and retailers that use RFID know products' locations at all times because RFID can track products throughout the supply chain. These groups can then match the number of products in a certain location and ensure they have enough to meet expected sales levels and forecasts.

RFID can potentially help improve customer experience because combining it with consumer demand information can lead to increased product availability.

6. Helps automate product receipt, storage and distribution

Today's warehouses often use automation to attempt to speed up goods receipt, inventory storage, picking and distribution, and RFID enables robotics and other technologies to identify, handle and route products.

Product tags help robots sense products and store them in or retrieve them from a specific location, and packaging tags enable automated technology to select the ideal package types for particular items. Equipment tags help robots move products using specialized picking and packing technology.

Automation technology can reduce the need for human labor, which may reduce a company's overall costs.

7. Helps optimize the manufacturing process

RFID can help lower manufacturing costs and increase manufacturing speed while still maintaining quality standards.

Suppliers can use RFID tags to track raw materials and parts within their facilities, potentially reducing the need for reordering if a part believed to be lost is found. In addition, manufacturing machines can use RFID to identify and select components and construct them into consumer-ready goods.

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