Applications of RFID Technology in the Logistics & Supply Chain Industry

Radio-frequency identification (RFID) is a concept that was initially patented in the 1970s, but the technology to enable it was much too expensive to allow for commercial developments. RFID is the use of wireless signals to transfer data between microchips. The chips can be inserted in tags, cards, or even living beings.

RFID is already in use in multiple industries and for various purposes. The device in your car that lets you zoom by in the fast lane at a tollbooth, while deducting a dollar amount from your account, is an example of RFID technology in everyday use. Another instance of RFID usage includes implanting a microchip into your pet’s neck to allow you to locate it if he or she goes missing.

There are a number of different technologies one can use to create RFID tags. The simplest tags are labeled passive tags and need to be extremely close to a scanner to be read.

RFID technology was the key in getting 100% reliability about where a shipped item is at any given moment and when it got to its destination in real-time. This information is extremely valuable data to a logistics’ company.

Hozefa, Saylawala, the sales director at Zebra Technologies, agrees. He paints a scenario where a delivery truck is loaded with boxes that have a chip so that an RFID scanner can create an up-to-date and detailed list of exactly what has been put on and removed from the truck. This allows the company to know in real-time exactly how much space is occupied and optimize their deliveries.

Saylawala credits the early adoption of RFID by retail giants, such as Wal-Mart, for creating the impetus for adopting the technology by the logistics and supply chain industry. Wal-Mart asked their merchants to tag incoming skids. When these pallets entered Wal-Mart warehouses and back stores, they would be able to instantly see the contents of the skid.

As digital technology has advanced, RFID technology has become accessible even to small and medium sized businesses. For instance, a small area rug business can attach a tag to every carpet in their retail shop and can zoom the scanner over the rugs to get instant and accurate count of their inventory with all sorts of details, including size of the carpet, quality, country of manufacture, and so on. This eliminates the need for physical inventory counts, which are not only expensive, but rarely 100% accurate. The same principle applies in a warehouse of a supply chain management company. If their packages are tagged, they can find out in real-time all the details they need to know about any box.

Industry experts do point out that RFID will not be a replacement for barcodes, as almost every product in developed countries now has a barcode attached to it. Barcodes also help keep retailers inventory and analyze buying patterns, like the time of the day a product is sold the least. RFID tags are an improvement over barcodes, as the newer technology allows the data on a tag to be updated and changed. Yet, billions of transactions still occur annually with barcodes for them to simply disappear.

The future, though, belongs to new RFID applications that will be created with the advent of Internet of Things (IoT) and it will be interesting to see what kind of impact RFID can bring when combined with IoT technology. What do you think? Share your thoughts by commenting on our Facebook or twitter pages.

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