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U.S. Manufacturers Report Greater RFID Usage

The multi-year survey also shows an increase in companies' plans to expand the use of RFID systems to track inventory flow throughout their manufacturing processes.
By Victor Sower, Kenneth Green, Pamela Zelbst and Morgan Thomas
Jun 11, 2012A multi-year survey conducted by researchers at Sam Houston State University and Southern Arkansas University shows steady growth throughout the past eight years in the utilization of radio frequency identification systems by U.S. manufacturers to track inventory. During the span of time covered by the study (2005 to 2012), there has been an increase in the number of U.S. manufacturers requiring suppliers to provide RFID-tagged materials in order to facilitate inventory tracking. Respondents also reported increasing plans to expand their use of RFID systems over the next several years, in order to monitor inventory flow throughout their manufacturing processes. This increased utilization correlates with dramatic decreases in RFID tag prices, which make the technology more cost-justifiable.

Radio frequency identification is an automatic identification and data capture (AIDC) technology that transmits information encoded on tags (transponders) to readers, and then to a computer database. RFID offers a number of advantages over other AIDC technologies, such as bar codes: it does not require optical line of sight for communication, multiple tags can be read simultaneously, it is capable of communicating over greater distances, tags can provide rewritable memory, and it can interface with environmental sensors, as well as provide enhanced security features (Zelbst & Sower, 2012).

Left to right: Victor Sower, Kenneth Green, Pamela Zelbst, Morgan Thomas

RFID offers many potential benefits to manufacturers in better managing their inventory and supply chains. The technology's usage has reportedly enabled manufacturers to reduce cycle times, decrease safety-stock levels and improve changeover times (Zebra, 2011). But perhaps the greatest benefit of RFID usage is the ability to make decisions with near-real-time information (Zelbst & Sower, 2012).

Some (Napolitano, 2012) argue that while "there are more drivers than ever pushing RFID's adoption... a lack of education is holding back companies from investing and innovating." To address this issue, our research group has conducted four studies during the past eight years regarding RFID's use and effect on performance in the United States' manufacturing industry. Four times throughout this period, we employed an online data service to survey U.S. manufacturing managers holding operations-related managerial or supervisory positions and operational positions, about how they used RFID within their companies. Respondents reported holding their current positions for an average of at least 6.9 years. Approximately two-thirds of those who responded selected one of 18 specific Standard Industrial Classification (SIC) categories, with the remaining third choosing the more general category, "other manufacturing." Mean organization size, as measured by annual revenues, varied from $1.5 billion to $1.9 billion.

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