More Companies Turn to RFID to Manage Logistics

A recently released survey indicated that one-third of respondents are already using the technology, and that another 27 percent plan to do so within the next two years.
Published: July 7, 2011

Logistics companies have been fairly slow to embrace radio frequency identification. Even during the years in which RFID was being hyped as a transformational supply chain technology, most firms waited for their customers to adopt—and when that didn’t happen on a large scale, many lost interest in RFID. But that is clearly changing.

Baylor University, Bryant University and the trade publication DC Velocity surveyed that magazine’s readers regarding their use of RFID in logistics and supply chain operations. The survey found that nearly one-third of respondents are using, piloting or in the midst of implementing RFID within their logistics operations. Another 27 percent said they plan to implement some form of RFID over the next two years. That leaves just over 40 percent who are not utilizing the technology, or planning to do so in the near future.

The online survey was conducted in August and September 2010. Of the 175 respondents, 33 percent said they work in warehousing or distribution, while 32 percent are manufacturers. DC Velocity reports that 14 percent are third-party logistics providers, 10 percent are in merchandising or retail, 6 percent are in material handling, and 5 percent are in transportation services.

Most companies indicated they are not using RFID in their supply chains, the magazine reported, but that rather, “they’re primarily using RFID to streamline and improve their internal operations.”

What’s more, nearly 60 percent of respondents who already have deployed RFID have done so for internal improvements. According to the magazine, “Sixteen percent said that they view RFID implementation as a tactical move to improve efficiencies of specific processes within the company, and 43 percent see it as a strategic move to improve efficiencies of multiple, connected processes within the company. Meanwhile, only 27 percent consider it to be a strategic move that involves using RFID across the entire supply chain.”

The magazine listed the tasks that respondents said they carry out with the aid of RFID. These include the following, in descending order based on the extent of implementation:

• Streamlining and improving internal operations

• Conducting inventory counts of items in storage

• Monitoring inventory usage

• Automating inventory replenishment

• Locating parts or equipment within a facility

• Tracking parts at the case, pallet or container level

• Tracking equipment (pallets, carts, trailers and so forth)

• Tracking parts at the individual unit level

• Supporting supplier-buyer coordination

Topping the list of specific operational benefits was “tracking of supply,” with 85 percent of respondents indicating they expected to see “moderate to strong benefits” from the use of RFID for that purpose. Respondents also reported that RFID has enhanced the accuracy and availability of information in the supply chain, resulting in better inventory visibility, increased visibility into supply chain processes, improvements in productivity and reductions in operating costs.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark’s opinions, visit the RFID Journal Blog, the Editor’s Note archive or RFID Connect.