RFID Transforms Supply Chain Management

6:16 pm - November 14th, 2006

Can you imagine 100% visibility of product in a Supply Chain with RFID tags to whole warehouse? RFID is major advancement in supply chain management. Although large range of applications supported by the radio-frequency identification technology, now supply chain management is on its focus. RFID is taught as the ultimate Supply Chain solution that will drive millions if not billions of savings throughout the supply chain and other areas. The question in the air is: Does RFID really has this “healing” power? From the ordinary process, such as moving goods through loading docks, to the complex, such as managing huge amount of data as information about goods is collected in real time makes RFID as an ultimate supply chain solution.

The way we handle products in the Supply Chain will radically change the transformational RFID technology. It brings transparency in supply chain by cut out-of-stocks, counterfeit and shrinkage. Manpower savings is one of the most important features of the RFID supply chain management system. It is flexible for all kind of applications; range will grow when RFID combined with other sensors.

Initially RFID is used to manage the large amount of goods like pallet and cartoon labels, identification. So RFID tags must have unique serial identifier for each batch of the product at the lading time, on the bill. It makes the less possibility of redundant data entry by scanning the RFID tag. The reason is RFID tag reader can scan many tags during a 1-second period.

There are 2 types of RFID tags: passive and active. When reader reads the passive tag, Reader received the energy through tagâ€™s antenna and transmits the data in the form of energy back. The main reason of widely used passive tags is its low cost.

Active tag uses own power supplies mostly battery and transmit data to the reader. Battery is also used with other devices. For e.g. Active tags may be used with some kind of unpreserved goods that have thermometers to ensure the goods are kept at an acceptable temperature.

It is very difficult to standardize the encoding information on RFID intelligent tags for supply chain management for bar codes.

The standards for basic product information are encoded in RFID chips and standard to manage UPC information in bar codes are presented by EPCglobal Inc.

The entire standard for information passing from RFID readers to other applications and from application to application, in supply chain are established by EPCglobal.

These standards become useful when goods are ship from one company to company in terms of electronic transaction that will occur in between organizationâ€™s enterprise resource planning systems. These standards maintain every time when middleware handles data scanned by an RFID reader as goods enter a warehouse and will pass the data to an enterprise application.

On the other hand it includes costs to the supply chain. But the investment in front of good ROI is not matter in case of RFID solutions.

By diana heyden
Published: 11/11/2006