Can radio frequency identification help companies achieve the low defect levels inherent to the Six Sigma philosophy?
Yes, it certainly can. Six Sigma is a manufacturing philosophy—started by Motorola—that seeks to improve the quality of manufactured goods by identifying and removing the causes of defects and variations in manufacturing and business processes. The goal of Six Sigma efforts is to reduce the number of defects to no more than 3.4 per 1,000,000 units produced, tasks performed, orders filled, customers served and so forth.
Some companies have employed RFID to help track work-in-process, and to identify problems that can lead to parts defects. But for the most part, companies have the tools they need to measure factory output and defective products. Where businesses have struggled to apply Six Sigma strategies is in their supply chain, as well as in retailing. That's because it is much more difficult to measure performance in the supply chain than for machines cranking out 600 units per hour.
To track when an item moves from one node to another in the supply chain, or within a warehouse, an employee must handle that item, locate a bar code and scan it. Companies moving hundreds of thousands—or millions—of items would need to employ an entire army of employees to capture all of the data (see The Six Sigma Supply Chain).
The same is true in retail stores (see Achieving Six Sigma Retailing). Why did a particular order of shirts fail to reach a specified store on time? Or why wasn't a specific pair of jeans put on a certain shelf when that shelf was empty? RFID can help answer these and other questions.
Even if you had an army of people scanning bar codes in a store and in a supply chain, the bar codes on most items would be identical to those on other items in the same product class. So there would be no way to measure why there was a problem with this pair of jeans, or that can of soup.
RFID, on the other hand, has two capabilities that make it ideal for Six Sigma efforts. First, it is the only automatic data-collection technology that is truly automatic. That means you don't need a large workforce to collect the information. Once the reader infrastructure is deployed, it can capture data no matter how many times an item moves.
Second, RFID can uniquely identify each item. With most RFID systems, a company either utilizes a unique identifier provided by an industry body, such as EPCglobal, or write its own unique serial number to a tag. Thus, if there is a problem with a particular unit being delayed in a supply chain, or not getting moved to the proper store shelf, companies can track back to determine where its tag was read, then perform a root cause analysis to understand why the problem occurred—and fix it. Many companies are getting very excited about being able to use RFID to squeeze inefficiencies out of their retail and supply chain operations.
—Mark Roberti, Editor, RFID Journal
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