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Sub Bot Post

How RFID Track & Trace Improves Inventory Management

Nov 2, 2021
4 min read
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Every organization that receives, holds, and/or ships items hopes to achieve track and trace perfection—complete and accurate information about the inventory: what you have, how much you have, where it is, how fast it’s moving off, which items are most popular, and about a dozen other data points that affect overall supply chain efficiency.

Responding to today’s supply chain challenges—where customers and consumers demand products same-day or next-day and want the ability to choose shipping/delivery methods—requires broad and deep visibility; that kind of visibility, in turn, requires sophisticated tools that capture the information needed to make proactive business decisions.

However, too many organizations are still using the traditional pen-and-paper method to track and trace, or they use multiple apps that create a complexity that’s bottlenecking operations. Both approaches offer only limited data—not the detailed, real-time picture that’s necessary if you want to react wisely as market conditions and customer needs change.

In this article we take a look at how inventory is tracked using traditional methods in a retail environment to illustrate the downsides inherent in this approach.

Retail Track and Trace Using Traditional Methods

Many retailers do a manual physical inventory count of items in stock to verify that the stock data they have on paper matches the inventory that’s actually in the store. It’s recorded with pen and paper and transferred to an Excel sheet, or captured with a mobile device. The process is time- and labor-intensive:

Step 1: Map the store, identifying all racks, displays, walls, and shelves where products are placed.

Step 2: Label stockroom boxes and shelves. This helps ensure that all merchandise is accounted for.

Step 3: Account for all “odd” products, such as merchandise that’s expected from suppliers, products that have been returned by customers, items that are pending fulfillment (like those headed for curbside pickup), and damaged products.

Step 4: Train staff how to perform the count to help minimize errors.

Step 5: Conduct a time-consuming inventory count, and cross your fingers that items aren’t missed and calculations are done accurately.

When a retailer is done with this kind of inventory count, they may know whether or not the stock in-store aligns with what they expected...but that’s about all they know. There are no deeper data points from which to gain insights that enable them to take action to improve their supply chain performance.

Fortunately, pen-and-paper inventory methods are falling by the wayside, being replaced by more sophisticated tools, one of the most robust of which is RFID, which stands for radio frequency identification. Today, RFID is used widely in a variety of industries for asset tracking and inventory management because it offers a far higher level of efficiency and accuracy—which, in turn, leads to:

  • Improved worker productivity
  • Greater insights into inventory mix and stock levels
  • Improved fulfillment and shipping
  • Reduced labor costs (less manual labor)
  • Improved asset security (assets are accounted for at all times, making theft less likely)
  • Greater compliance with regulatory and compliance standards

How Does RFID Work?

RFID systems use short-range radio waves to send data from your RFID-tagged assets to “reader” devices that capture the information you need.

  • RFID tags are affixed to each asset and constantly transmit data to an antenna (either integrated into the reader, or separate from it). RFID tags can store a wealth of information, such as manufacture date, handling instructions, condition, temperature, serial number, location, movements, storage requirements, how long it’s been in the warehouse, how many times it’s been accessed, and its status (“awaiting pickup” or “held for customer,” for example)
  • There are three types of tags. Which are used depends on the use case:
    • Active tags are battery powered and have a range of up to around 50 feet
    • Passive tags are powered by the RFID reader or antenna and have a lower signal range than active tags
    • Semi-passive tags are a hybrid of these two, having both internal batteries and an antenna and RFID chip. They’re typically used in situations where the asset is in close proximity to the RFID reader
  • RFID readers use internal antennas to emit radio waves in order to get signals from the RFID tags (or, in more complex systems, connect wirelessly to the antenna in order to get the information). Readers can be handheld or mounted. These readers assess information in real time and can relay the data to a software system to be stored and referenced as needed

Not only do they capture an abundance of information, but RFID systems offer unique features that make them highly versatile:

  • Workers don’t actually have to be in the line of sight of the items they’re scanning. Tags can be read up to 40 feet away, and up to 200 can be read simultaneously. That means a worker can scan an entire room filled with pallets in just seconds
  • The technology works indoors and outside. Temperature and humidity don’t affect the relay of data (though water may)

What Can I Do With RFID?

RFID can be used to:

  • Track both product components and finished products. RFID tags make it possible to track parts from suppliers as they move through every point in the supply chain. Every step—from supplier to satellite sites, to 3PLs to gate in/gate out, to elevator lift, to shipping containers—is a point at which the tag and its information is scanned
  • Optimize shipping. A company can see exactly what has been put on and removed from a truck (some limitations apply) and get it to where it needs to be, when it needs to be there, by tagging and scanning shipments. This minimizes the risk of expedited carrier fees and of having product sit too long on a trailer in the doc
  • Reduce misplaced assets and theft. Every year, construction and other industries suffer significant equipment and supply losses. By tagging these items, owners can pinpoint their locations at all times
  • Optimize warehouse layout. An RFID system will reveal which products are fastest-moving and which are stagnant; with this information, you can reconfigure your layout so that workers can quickly access those products that are needed most often
  • Ensure product safety. RFID tags can be used to prevent expired or compromised products from entering the system; sensors can detect temperature issues that lead to spoilage

It’s not an overstatement to say that the capabilities that RFID track and trace affords—and the improvements you’ll see using this technology—could determine whether or not you survive the difficult global supply chain challenges we’re seeing today.

Lack of visibility into your inventory only compounds the shipping and fulfillment roadblocks standing in your way as you try to get goods where they need to be, when they need to be there. Not only does RFID speed inventory counts and improve accuracy, but it provides you with a wealth of information—information you need to make the decisions that will improve the performance of your supply chain.

Want to learn about RFID best practices? Take a look at our free whitepaper, Best Practices for RFID Implementation, now!

Read Our Whitepaper Here!

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