In the past, I’ve discussed the use and benefit of technology in the Lean supply chain. One of the technologies that has really started to significantly impact the supply chain is RFID (radio frequency identification).
For those of you not that familiar with RFID, it is technology that uses radio waves to automatically identify people or objects. Data is contained on a microchip attached to an antenna (the chip and the antenna together are called an RFID transponder or an RFID tag). The antenna enables the chip to transmit the identification information to a reader, which converts the radio waves from the RFID tag into digital information that can then be passed on to computers.
According to an article at RFID Arena entitled, “Benefits of Implementing RFID in Supply Chain Management,” RFID is “not just a replacement for barcodes. RFID ensures that the right goods are available in the right place with no discrepancies and zero errors. It makes the supply chain considerably more precise and improves the efficiency and reliability of the entire chain. As real-time information is made available also administration and planning processes can be significantly improved.”
Products throughout the supply chain are counted numerous times and with RFID tags, product can be counted in seconds (with the added benefit of reductions in labor required). Additionally, there is the benefit of increased, real-time and very detailed information as RFID tags contain much more information than bar codes (which basically have the manufacturer and item code on an item).
RFID is helpful beyond manufacturing into the distribution of finished goods. It can accelerate the speed of delivery management, improve efficiency, visibility and increase accuracy in selection and distribution processes as well as reduce distribution costs.
RFID in retail store operations (e.g., apparel tagging) can aid in cycle counting and triggering replenishment from the back end to the front end of the store.
The opportunities for RFID to increase speed and efficiency throughout the extended supply chain seem endless.