The History and Benefits of Using RFID

Introduction

Radio frequency identification (RFID) is a modern-day wireless automatic identification and data capture technology that integrates radio waves to facilitate the automatic identification of objects and tracking of their location. The information-tracking technology provides real-time information crucial for facilitating continuous improvement in the supply chain operations and logistics. RFID utilizes electromagnetic fields that help in the automatic identification and tracking of moving objects. The equipped RFID systems have tags usually affixed to individual products with transponders that communicate to particular RFID readers on the identification of objects and the tracking of their location. This essay will discuss the importance of RFID technology in facilitating real-time logistics and supply chain visibility.

History

The RFID technology has substantial data volume storage and it provides accurate information within a short time. A significant number of industries use RFID as a tool for minimizing operation costs and finding profitable business opportunities. The supply-chain management, cattle ranching, payment systems, transportation, distribution systems, automobile industry, and military industries mostly use the technology to enhance their business operations. Commercial and government institutions have implemented RFID because of the system’s ability to provide correct data and the instant recognition of the inventory location. RFID facilitates the optimization of labor costs because the automated system does the work of human force within a short time with enhanced database accuracy. The technology works with large volumes of data, usually red and written within a short time, which reduces paperwork and enhances productivity. The additional real-time sensing data enhances the optimization of the business process and minimizes losses. For example, attaching the RFID tags to the consumable goods to monitor them during transit and in storage brings about the faster implementation of effective practical measures for managing any inconvenience that may lead to potential wastes.

The discovery of real-time inventory in 1939 during the Second World War in Britain aimed at identifying and locating the British jet fighters (Ustundag 5). The placement of the tags on the jet fighters at war facilitated the location of the aircrafts. The identity friend/foe system was the first application of the radio frequency identification. Corporations utilized the electronic data surveillance technology for the first time in the 1960s to ensure their products safety. RFID became an officially accredited standard -tracing technology for tautomatic identification in commercial landscapes in the 1970s. RFID is a widely used technology in many industries such as the automated vehicle identification (AVI) systems and livestock identification. Attaching the RFID tags to automobiles enables easier tracking of their movement throughout the assembly line. The implantation of the RFID microchips on livestock and pets allows faster identification of animals.

How RFID Enhances the Supply Chain Management

A supply chain refers to an association of companies that make products and services available for the consumers on the market. The chain involves the assembling of processes that facilitate the satisfaction of customer’s requirements either directly or indirectly. The supply chain is an integration of facilities and distribution methods that facilitate the execution of procuring, manufacturing materials, and distributing the products to clients. Supply chain management involves the harmonization of the management of the flow of goods and services to accomplish a high degree of responsiveness and effectiveness. The key objective of the supply chain management is to implement top quality chain process and strategies aimed at providing excellent customer services and maximizing the company profitability. A quality customer service involves reasonable rates on goods returned by clients, just-in-time delivery rates, and high order-fill rates. Supply chain management needs a continuous quality improvement to provide the high-quality customer service and efficient operations that enable the firm to achieve high turnover rates. The major challenge in supply chain management is maintaining an excellent customer service and the optimization of inventory while providing favorable costs of the goods sold. The rapid progressing of the modern-day business landscape characterized by stiff competition, the ever-increasing customer expectations, and limited market share requires supply chain management to implement the efficient technology for maximizing profitability and customer service. The need for a continuous improvement by having new techniques like real-time inventory and dynamic supply chain will help a company to achieve long-term viability and a competitive edge on the dynamic global market. RFID is a real-time inventory that facilitates the mitigation of the supply chain challenges through identifying and locating products at any point throughout the supply chain process. Automatic identification (Auto-ID) used by many industries provides the inventory accuracy and minimizes supply chain costs while optimizing the inventory. Top retailers worldwide such as the Wal-mart, Marks & Spencer, and Tesco have increasingly implemented the RFID technology application in their business operations (Wisner, Leong, and Tan 221). The RFID tags have significantly influenced the progress of supply chain management by facilitating an enhanced asset management, waste reduction, improved product availability, and discharge rates. RFID simplifies inventory management and enhances data accuracy leading to the high productivity, optimized labor costs, high-quality customer services, better in-transit visibility, and the decreased operation time due to the reduction of time allotted to scanning and handling of materials, which enhances the overall process improvement (Turcu, Turcu, and Graur 348). RFID is an ISO 18000 certified automation device for increasing the competitive benefits for the commercial industries.

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The Use of RFID in Logistics Operations

The RFID technology has a significant influence on the expansion of industries such as logistics service providers that engage in the creation, movement, and sale of material goods. The use of active RFID transponders on goods during transportation enhances the efficiency and visibility of the transport route to both the vendors and the customers. For example, the RFID tags embedded in pharmaceutical products in warehousing facilitate the identification and tracking of counterfeit goods and instant recording of accurate pharmaceutical data. The RFID technology promotes the preservation of consumable products in retail industries by monitoring the temperature levels to ensure they retain a fixed temperature. The approach improves the accurate checking of the expiry dates of the inventory, which enable the firms to optimize their inventory and durable goods to avoid wastage. Furthermore, the attaching of the active RFID to the individual goods while in transit promotes their safety because the transponders emit signals that send responses to the RFID readers that detect any mishap and act immediately to avoid unnecessary damages. RFID also helps minimize the possible product shrinkage and theft while in transit. The role of transportation is important in supply chain management because the sector involves the delivery of products to the customers. RFID promotes a high degree of responsiveness to customers and efficient operations (Jones and Chung 168). Adopting an effective transportation reduces the costs associated with late or failed delivery. Many corporations in logistics operations mostly use RFID to identify and locate the movement of objects across the assembly line. The 3PL companies face a major problem of attempting to manage and check the logistics information across the entire supply chain process. There is the need to provide the real-time and accurate logistics data about products to achieve successful logistical operations. The RFID technology provides real-time logistics information by indicating the immediate location, capacity, type of components, and arriving date of inventory, which promotes the transparency of the distribution system and easier tracking of goods. The RFID systems are useful in the logistics operations because they have long-distance tracking capabilities and provide the real-time information instantly, which saves significant duration of operations. The technology reduces manual entry errors in the distribution centers by the provision of accurate logistics data.

The Role of RFID in Inventory Control

RFID has a significant influence on the improvement of inventory management because it facilitates the effective decision-making and the optimization of inventory. Effective planning increases productivity giving a company a competitive edge. The placement of the RFID tags at strategic points inside a warehouse is an effective way to monitor the movement of products. The RFID technology facilitates a constant inventory control because the RFID tags attached to individual products provide the accurate real-time information, which improves the concurrent monitoring of large quantities of products. The accuracy of the inventory data moderates the potential factory inconsistencies. The RFID produces significant volumes of data throughout the supply chain. The enormous data technology accelerates real-time data processing. The information retrieved by the RFID technology is essential for formulating effective strategies for continuous improvement. The real-time data provides up-to-date information that the management uses to formulate effective policies that capitalize on meeting the ever-increasing customer requirements and maximizing profitability. The information is also useful in developing strategies for counteracting both external and internal interferences that may potentially devastate the progress of a corporation’s operations (Jones and Chung 168). RFID guarantees maximum security, particularly for the products positioned at high-risk points in the warehouse. The technology activates automatic real-time regulatory alerts that ensure the products safety. RFID plays a crucial role in the optimization of inventory by reducing the inventory and stock-outs while promoting excellent customer services (Lee 267). The implementation of the RFID technology leads to the significant increase in sales volume due to the reduction of inventory management costs. The heightened visibility of inventory data facilitates the management of shrinkage and disorganization of products.

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Conclusion

The RFID technology’s effectiveness has led to its increased implementation in the logistics and supply chain processes of the established global retailers such as the American Wal-Mart. RFID has had a significant influence on the success of supply chain management by not only facilitating real-time data collection but also streamlining the flow production of businesses. The revolution of RFID in the supply chain management has led to a considerable efficiency and reliability of the overall supply chain. However, the development of RFID technology worldwide has not been successful due to the high costs of the RFID tags. Many supply chain managements are yet to utilize the technology because of its high maintenance costs.

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