Information sharing is key to a successful supply chain, particularly one that is global. Technology can be used to make data collection and sharing a priority for your business. The use of RFID (Radio-Frequency Identification) technology in the supply chain allows for real-time efficiency and visibility. RFID can solve some supply chain challenges such as collecting and analyzing data, optimizing operational costs and mitigating security risks.

What is RFID?

RFID technology uses radio waves to transfer data wirelessly. It is similar to barcoding; however, RFID can store more information than traditional barcodes. In addition, RFID scanners do not need a line of sight to the barcodes, rather they communicate with tags on items without needing to scan them physically. RFID technology enables users to access the supply chain from production to distribution using RFID tags, gates, tunnels, and handheld readers. Products can be authenticated and tracked quickly and easily, even through the use of a smartphone.

How RFID Optimizes the Supply Chain

An RFID tag enables a manufacturer to track every part it uses throughout the supply chain. Many manufacturers need to count products several times a week, or even within the same day. RFID enables a product count to be completed in seconds. It means that inventory can be counted without even having to open every box to scan items, which reduces manual work and costs. 

Since RFID scanners do not need to be in the line of sight of the tag, they are able to read more than one tag at a time, which gives a constant update on real-time movement of products.  The data from RFID tags can also be used to calculate the amount of production time needed as well as what manufacturing machines have or have not had maintenance.   

In addition to inventory management, RFID also has the following advantages:

• – Brand protection from counterfeit markets
• – Reduction of chargebacks due to accuracy errors
• – E-commerce fraud identification
• – Reduction of shrinkage
• – Accuracy auditing
• – Increased throughput
• – Bottleneck identification

RFID and Daily Operations

The daily operations of a business can affect how it does overall. Supply chain managers who focus on daily operations are able to create a supply chain that functions smoothly while reducing operational costs and increasing revenue. Performance data is critical in understanding how a supply chain is functioning every day. RFID scanners monitor how goods move through the warehouse. Inventory management is more efficient with the use of real-time data about what inventory is available, what is coming into the warehouse, and what has been shipped. Better warehouse performance translates to higher profit margins.

RFID Integrations

RFID integrations with supply chain management systems enable businesses to receive real-time updates with warehouse control systems. The integration to a company’s warehouse management system (WMS) provides for a comprehensive technology. As RFID improves how information is captured throughout the supply chain, blockchain is a way to securely store it. Blockchain technology provides a ledger of data across the supply chain which identifies issues so companies are able to respond. 

RFID’s Use in Production and Distribution

RFID technology shows what raw materials are in stock, and which are in a semi-finished state. It also checks whether a given shipment has every item that has been ordered, minimizing the time in receiving. The distribution of finished goods to warehouses or onto their final destination of the customer is dependent on the accurate transmission of information. The access to real-time information allows for quick decisions to be made.

As companies need real-time visibility to their supply chains, RFID helps to optimize the entire process. Collecting and transmitting useful data along the supply chain ensures that errors are minimized and decisions are made based on information. Using a 3PL to manage this part of your business can cut the cost of investing in RFID and still increase efficiency and margins. A 3PL is best suited to handle a supply chain for the ever-changing industry. Red Arrow Logistics can handle your supply chain to give real-time visibility while still providing flexibility in carriers and modes of transportation.