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BenefitsofimplementingRFIDinSupplyChainManagementRFIDArena

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BenefitsofimplementingRFIDinSupplyChain
Management
14November2013
RFIDArenaGuestBlogger
Supplychainmanagementisgenerally
seenascomplexandknowledge
intensiveprocess.InthisarticleRoksana
Parvin,asupplychainmanagement
professional,elaboratesonthebenefits
ofimplementingRFIDinsupplychain
management.

BENEFITSOF
IMPLEMENTINGRFIDIN
SUPPLYCHAIN
MANAGEMENT
ThetermSupplychaincoversallpossibleprocessesinvolvedintheflowofgoods
frommanufacturingtocustomerincludingmanufacturing,distributionand
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transportation.Thus,supplychainmanagementcoversallthesestepsincombination
withmarketingdecisions,customerdemand,inalignmentwithgeneralcorporate
strategyandgoals.Usuallyconsideredasacomplexandknowledgeintensiveprocess,
managementofsupplychaincanbenefitsignificantlyfromtheimplementationof
RFIDtechnology.

RFIDtechnologyhasrisentobecomearevolutionaryelementinsupplychain
management.Itisnotjustareplacementforbarcodes.RFIDensuresthattheright
goodsareavailableintherightplacewithnodiscrepanciesandzeroerrors.Itmakes
thesupplychainconsiderablymorepreciseandimprovestheefficiencyandreliability
oftheentirechain.Asrealtimeinformationismadeavailablealsoadministrationand
planningprocessescanbesignificantlyimproved.

ThisarticleaimstogiveinsightsintothebenefitsofRFIDusageinsupplychain
managementprocesses.Forsimplification,theprocessesaredescribedintheorder
theytakeplace.WechosetodescribetheprocessesoftheFMCG(fastmoving
consumergoods)industryinthisarticle.However,thebenefitsofRFIDinsupply
chainmanagementcanbereapedalsoinotherindustries.

BENEFITSOFRFIDIN
MANUFACTURINGPROCESSES
ThemarketofFMCG's,fastmoving
consumergoods,isoneofthefastestmovingmarketsintheworld.IntheFMCG
industry,productshavetobecountedseveraltimesalreadyinthemanufacturing
process:duringthestagesofproduction,washing,andpacking.Traditionally,these
operationsareperformedmanually.ButbyutilizingRFIDtagsandreaders,products
canbecountedinseconds.ThisisduetothefactthatRFIDtagscanbeautomatically
scannedwithoutbeinginthelineofsightofanRFIDscannerandmultipletagscanbe
scannedsimultaneously.Formanufacturersthistranslatesdirectlyintocostreductions
aslaborintensivetaskscanbecarriedoutfasterandmoreaccurately.
Inadditiontofasterauthenticationofproducedgoods,manufacturerscanalsobenefit
fromincreasedinformationgatheredwiththehelpofRFIDtechnology.RFIDtagscan
storefarmoreinformationthanconventionalbarcodelabels.Thisinformationcanbe
usedtooptimizeproductionprocesses.Accurateknowledgeoftherealtime
movementsofrawmaterialsandthetimeneededforspecificproductionstepscanbe
integratedintoefficientproductionplanning.
WiththehelpofRFID,manufacturerscanalsobenefitfromincreasedinformationin
regardstorepairandmaintenanceoftheirmachinesandequipment.Thisallows
manufacturerstohavevisibilityintovaluabledatasuchas:whichmachinehasbeen
repairedorundergonemaintenanceandwhenhasthisbeendone?Thisinformation
helpstoplanmaintenanceschedules.Hence,maintenancecanbecomepartof
productionplanningandhelptopreventcostlyproductionbreaks.
RFIDinmanufacturingprocessesmeans:
lessmanualwork
lesscosts
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improvedvisibility
improvedplanning
RFIDBENEFITSINWAREHOUSEMANAGEMENT
Onceproductionhasbeencompleted,FMCGproducerspacktheproductsintocartons,
anddeliverthecartonstothewarehouseofthefreightforwarderorthebuying
company.Afterthecargoreachesitsdestination,itisnotuncommonthatitendsupin
awarehousefirst.
Keepingtrackofthelargenumberofcartonsisaverycomplexaswellastimeand
laborconsumingprocess.However,RFIDcanbeimplementedtoeasethesituationas
itcanimproveinformationmanagementconcerningcargoflow.Usually,readwrite
equipmentisinstalledattheentrytoawarehouse.Everycargounitisequippedwith
RFIDtagsandalltheinformationrelatingtothetagsisstoredinthecentralcomputer
ofthewarehouse.Whenthecargoismovedinoroutofthewarehouse,thereadwrite
equipmentregistersitandforwardsthedatatothebackendsystem.Thisallowsthe
managementcentertomanagethevastamountsofproductsgoingintoandleavingthe
storage,recognizecargoandhelpwithplacementofthecargointhewarehouse.
Incaseswherereadwriteequipmentisplacedwithinthewarehouse,allinhouse
movementsareadditionallyregisteredinthesystem.Thisallowsforstrategicplanning
ofproductlocationswithinthewarehouse.
TheinformationthatisgatheredwithRFIDcanleadtosignificantimprovementsas
thetrackingandhandlingoftheproductscanbedoneinrealtimeandwithgreat
accuracy.Inthewarehouse,productsareeasilylocatedasallproductmovementsare
trackedandthisinformationisautomaticallyregisteredinthesystem.Whilststockis
accuratelytrackedvaluableinformationconcerninglossesisalsorecorded.
RFIDinwarehouseprocessesoffers:
visibilityofaccuraterealtimeinformation
fastlocatingofproducts
possibilitytorecordlosses
abilitytoplanproductlocationsstrategically
RFIDBENEFITSINTRACKINGANDMANAGINGOFSHIPPING
CONTAINERS
Aroundtheworld,themostpopularwaytotransportlargeamountsofcargoistouse
shippingcontainers.Containertransportsareoftentimeschosenastheyensuresafeand
securedtransportation,lowcosts,standardpackagingandhightransportdensity.
CompaniesthatuseRFIDintrackingandmanagingofshippingcontainersareableto
trackcontainersineachlinkofthesupplychain.ActiveRFIDTagscanbeusedto
trackcontainersinrealtimeinyardsanddocks.UltrahighfrequencyRFID
technologyhaslongidentificationdistanceandspeedsupidentification.
RFIDincontainermanagementandtracking:
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offersvisibilityofrealtimecargomovement
improvesefficiency
increaseaccuracy
BENEFITSINDISTRIBUTIONPROCESSES
ImplementationofRFIDtechnologycanalsoaddadvantagestodistributionprocesses.
UsageofRFIDwillgreatlyacceleratethespeedofdeliverymanagement,improve
efficiency,andincreaseaccuracyinselectionanddistributionprocesses.Itwillalso
reducedistributioncosts.WhenproductsembeddedwithRFIDtagsentera
distributioncenter,theRFIDreadwriteequipmentattheentrygatecanregisterthe
RFIDtags,andsendtheinformationtothedistributioncenters'backendsystem.This
informationcanbeusedtoputthecartonsinproperplaces,sortthemquicklyand
efficiently,anddispatchthecartonstotheretailingcentersinlesstimewithimproved
accuracy.UsageofRFIDalsoensuresaccurateinventorycontrol.
Astheproductsreachtheirfinaldestination,akathestore,theyarescannedand
registeredautomaticallyattheentrance.Formoreinformationaboutinstorebenefits
ofRFID,checkoutthelinksintheendofthisarticle.
RFIDindistributionprocesses:
acceleratesthespeedofdelivery
improvesefficiency
increasesaccuracy
reducesdistributioncosts
RETAILBENEFITSFROMIMPLEMENTINGRFIDINSUPPLYCHAIN
Overthelastfewyears,moreandmorecompaniesareintegratingRFIDtechnology
intotheirstrategicplanning,sinceitprovidessignificantadvantagestosupplychain
performance.TherearefarmorebenefitsgainedbyRFIDimplementationintosupply
chainandlogisticsoperationsthanjustimprovingidentificationofproducts,
shipments,andassets.Neverthelessalreadythemostcommonbenefitsprovethat
RFIDisworththeinvestment.
ThisentrywaswrittenbyRFIDArenaGuestBlogger,postedon14November2013
Bookmarkthepermalink.Youcanpostacomment.

31commentsonBenefitsofimplementingRFIDinSupplyChain
Management
1.KentS.Fiebelkorn
Posted03January2014at20:49:52
Greatarticle,andaddressingelementarytopicsthatbenefitthekey
stakeholders...QuestionIhave,lookingforsuggestionsingettingall
stakeholdersintheecosysteminvolved....haveyouseenenoughbenefitsup
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streamthat,mfganddist'sarewilling
tohelptheretailinvestmentinthe
technology?
2.KirsikkaDrger
Posted13January2014at13:15:13
HelloKent,

thatisagreatandequallytricky
questionyouareasking.Beingable
toinvolvestakeholdersisaffectedby
manyfactors.Whatmotivatesor
raisescuriosityinstakeholdersmay
differwidely.Alsoitdependson
whatpartyinthesupplychainyou
represent.

Bestregards,Kirsikka
3.FabianFabito
Posted27January2014at19:15:22
describeRFIDandit'simportancein
supplychainmanagement.
4.KirsikkaDrger
Posted28January2014at09:21:14
HelloFabian,

hopefullythearticlecontainedwhat
youarelookingfor.Ifyouwouldlike
toreadmoreIrecommendyoucheck
thisarticle:

http://www.rfidarena.com/2013/4/23/rfidininternationalsupplychain
management.aspx

Othersupplychainarticlescanbecheckedhere:

http://www.rfidarena.com/rfidnow.aspx?groupby=Supply%20Chain

BR,Kirsikka
5.BrandonH.
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BenefitsofimplementingRFIDinSupplyChainManagementRFIDArena

Posted04March2014at04:31:23
Iwasjustwonderingandlooking
aroundfortheadvantagesand
disadvantagesascomparedtosimply
barcoding.Hopefullyyoucanshed
somelightintermsofpricing,
selling,andvariousareasyou've
pointedoutintheabovearticle.

Thanks,
Brandon
6.KirsikkaDrger
Posted04March2014at08:54:29
HelloBrandon,

wehaveanarticlewrittenbyJessica
SilonthetopicofBarcodevs
RFID.Youcancheckithere:

http://www.rfidarena.com/2013/12/2/6mostcommonfaqsofbarcodevs
rfid.aspx

Ihopethishelps.

Bestregards,

Kirsikka

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7.awol
Posted11April2014at10:47:20
Iwanttobriefexplainabouttheroles
ofLogisticsandSupplychain
management?
8.KirsikkaDrger
Posted15April2014at09:20:08
Awol,couldyoupleasespecifywhat
informationyouarelookingfor?For
avarietyoflogistics/supplychain
articles,youcouldcheckhere:
http://rfidarena.com/rfidnow.aspx?
groupby=Supply%20Chain
9.JohnWilliams
Posted17June2014at20:01:01
Dohaveanyarticlesreleatedto
RFIDtrackingofmultitasked
productionordersinmanufacturing?
10.KirsikkaDrager
Posted18June2014at09:13:43
HelloJohn,

Wedonothavesuchanarticle
availableontheRFIDArena.Maybe
youcouldfurtherspecifywhataspect
youaremostinterestedinreading
about?

BR,Kirsikka
11.WarehouseforLease
Posted13August2014at10:52:40
RFID?Howaboutinwarehousing
12.KirsikkaDrger
Posted25August2014at10:13:30
RFIDinwarehousingisavery
interestingtopic,haveyoureadupon
thearticleRFIDgates:RFIDgateswherearetheyandwhy?
(http://rfidarena.com/2012/10/23/rfidgates%E2%80%93wherearetheyand
why.aspx).WhataspectofthetopicRFIDinwarehousing,wouldyoubemost
interestedin?
13.Erkan.Pehlivan
Posted30August2014at15:14:36
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Whataboutcostofimplementation
ofRFIDinsupplychain?Isunit
priceofoneRFIDtagstill
expensive?Orwhatisaverageprice
foroneRFIDtag?Areall
internationalretailersusingit?What
isthemarketsituationforRFID
implementation?
Thanks
14.KirsikkaDrger
Posted04September2014at
12:35:02
HelloErkan,wehavearticles
availablediscussingRFIDinthe
supplychain

http://www.rfidarena.com/2014/1/9/intelligentlogisticsclosingtheloopon
transferableassetsinlogisticswithrfid.aspxaswellashowthetagpricehas
changed:http://www.rfidarena.com/2012/4/5/themagic5centspertag.aspx.
NeverthelessifyouareinterestedinthespecificpriceclassesofdifferentRFID
tags,pleasecontactatagsupplier.Withallthechoiceavailableinthemarket
theywillbeabletoansweryourquestionsbest.
15.SyedaShahanaYesmin
Posted17September2014at14:05:34
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hello
16.Ziadbarghouthi
Posted18September2014at
11:56:20
Myquestionisaboutthecontainer
tracking.Whenacontainerleavesa
distributioncenterandgoesintoa
foreignport,howistheinterface
donebetweenthisforeignport(for
instanceinSaudiArabia)andthe
exportingportlikeforinstancein
England?Doesthisrequirethe
destinationporttobeconnectedto
thesamebackendserverinEngland
tobeabletotrackthatcontainer
locationinthecontaineryardinSA?

Thanks.
17.Hajar
Posted19October2014at18:01:57
Greatpaper.Howcan'Ihavethis
paperinPDF?

Thankyou
18.SuviDaln
Posted22October2014at08:41:27
HelloHajar,thankyouforyournice
feedback!Wearenotabletoprovide
aPDFfile.Werecommendyouto
useyourownprogramsinorderto
printthearticleasaPDF.Ifyoufind
thetopicinteresting,pleasealso
checkthisarticle:

http://www.rfidarena.com/2013/4/23/rfidininternationalsupplychain
management.aspx
19.Harmen
Posted24October2014at11:32:44
Greatpaper,
Lotsofbenifitsaremadeclear.Aretherealsobenefitsfortheportauthority
proces??

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Grt
20.Adnanumer
Posted24October2014at14:57:58
wearestudentsofSUPPLYCHAIN
MANAGEMENTthisarticleisvery
helpfulforuskindlybrieflyexplain
theseterminologiesinsimpleword
thatastudentcaneasilypickall
contentofspecificfield
21.SuviDaln
Posted27October2014at08:40:58
HelloHarmen,thankyouforyour
comments!Unfortunatelywedonot
haveanyarticlesaboutportauthority
processes.Thebestwaytofindone
isperhapstogoogle.Ifyoufindone,
pleaseletusknowtoo!
22.AshokMaurya
Posted17December2014at
08:01:30
Veryinformativeblog.Iwouldbe
moreinterestedtoknowifthereare
RFIDtagsavailableinthemarket
whichcanworkin95%humidity
acrossfreshsupplychain
23.Giuliano
Posted12January2015at01:56:51
I'msearchingsomethingaboutthe
topicReidtechnologyinsupply
chainbutIdidn'tfindnothing.The
differentwebsitesconnectitwith
Rfidtechnologyinsupplychain.Isit
thesametopic?
24.SuviDaln
Posted12January2015at09:47:03
HiGiuliano,
RFIDcomesfromwordsRadioFrequencyIdentification.WhatdoesREID
meanmaybeyoushouldfindmoreoutwhereyouneedthatone.Ifyouare
lookingforRadioFrequencyIdentification,thenRFIDiswhatyouarelooking
for!
25.hifza
Posted10April2015at07:28:07
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verywellexplainedbutihaveone
questionthatwouldthistechnology
alsobeeffectiveforsmallbusinesses
aswellintermsofrevenue
generation?
26.Danjohnson
Posted10April2015at10:59:28
Greatarticle!Oneissuethatwehave
runintowithactiveRFIDtagswhen
usedoncontainersthatareshipped
viasurfaceisbatterylife.Theactive
tagwillsendouta"Ping"onceevery
hour,orhoweverprogrammed,and
sometimesthebatterywilldiewhile
intransitandyouwillonlybeableto
identifyit'slastknowlocation.

U.S.AirForceLogisticsOfficer
27.Ahmed
Posted07May2015at13:51:04
RFIDisagreattechnologythatwork
onefficiency/improvementofthe
Supplychainprocesseshoweverthe
onlybarrierimplementingsuch
technologyistherunningcostofthe
RFIDtags.
Asamobilephonedistributorwheni
studiedsuchtechnology
implementationIdiscoveredthat
eachphonewillcostaround15cent
whichisaconsiderablecostinsuch
industry.
28.Noor
Posted14May2015at17:51:38
CanRFIDcontroltheinventory
reconciliationprocessina
supermarket?AndHow?
29.PRAHLADPATEL
Posted19August2015at17:49:16
whatisrfid
30.SuviDaln
Posted20August2015at08:42:21
Hi,
RFIDcomesfromthewordsRadioFrequencyIdentification.Foryour
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information,wearesoonaboutto
publishanarticleexplainingthe
basicsofRFID.

br,
Suvi
31.ken
Posted25February2016at11:19:38
roleofrfidinsupplychain
performanceindistributionfirms,
caseofmaersk.canigetafull
projectonthistopickindlyreplyin
myemail.

Postacomment
Yourname:
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