Reaping Returns on RFID Investments

By Jason Acidre

Before applying the technology to comply with your customers' supply chain requirements, first analyze your company's own business processes.


Radio frequency identification has long been rated as the technology of the future, and constant research is being directed toward using Electronic Product Code (EPC) RFID tags to align all trading partners down the length of the supply chain. Instead of applying the technology blindly to comply with a customer’s supply chain requirements, a company must first analyze its own business processes.

At present, RFID is unable to provide the coordination stipulated by supply chain implementation requirements, and is not equipped to handle the complexities involved, even though it yields a quick return on investment in factory and warehouse operations in various industries. RFID can be a money saver for manufacturers that face repeated bottlenecks, that need to slash their workforce employed for materials management and replenishment, and that want to be able to trace materials.

Closed-loop industrial applications, such as parts identification, replenishment, fleet and asset management, and work-in-process (WIP) tracking, do not require businesses to involve their customers, suppliers, outside organizations or logistics providers in their RFID plans. This enables them to more freely adopt RFID for a diverse range of applications, using proven top-quality products that comply with international standards.

RFID is comparable to a part of a toolbox in which a single tool is not useful for every task. Similarly, the technology is one part out of a complex system that typically incorporates bar codes, mobile computers, material-handling systems, wireless LANs and industrial controls, all of which help to manage assets and materials well. It is incorrect to see a tag’s capabilities and forcibly apply them to every application. Instead, an RFID solution can be designed from the perspective of the business process, and by identifying the levels at which data is classified and communicated, as well as the actions subsequently taken. This will enable companies to see the value of RFID beyond the tag in question.

RFID for Value Addition in Applications

RFID has been used in commercial applications for the past 30 years. Industrial applications find it particularly useful for routing materials automatically, tracking equipment and identifying containers carrying goods. RFID adds maximum value in situations in which an item needs to be traced through its entire cycle or a whole process, since it is in these situations that labor costs are high and the probability of errors makes it expensive; in operations where labor or time constraints necessitate a system of quick replenishment; and for process that require more detailed information about an item, beyond what can be stored in a bar code. No other form of automated data-capture technology can match RFID in any of these applications. Thus, RFID proves its worth in terms of value and control in product genealogy and lifetime traceability, materials management and replenishment, just-in-time (JIT) and Kanban environments, asset tracking, and warehouse and yard management

Lifetime Traceability and Product Genealogy

Many organizations require lifetime identification for their products, and need to trace the genealogy of those goods. This is typically the case in the aviation industry, in which an airplane will not be able to fly if it lacks lifetime service records or lifetime identification. Any errors in maintaining records or a misidentification in this industry can cost millions of dollars, and necessitate the replacement of expensive parts. This is why the aviation industry leads in the adoption of RFID product-tracking standards and identification applications. There are many other industries with similar needs.

RFID, with its ability to update product information throughout its lifecycle, makes it ideal for all types of traceability applications. Read-write tags can store product codes and ID numbers permanently, leaving the remainder of available memory space for information to be added later. Product tags can continuously add information like service codes, inspection dates and sensor readings in such applications as maintenance, warranty and asset management. This function extends beyond the identification and tracking role of RFID.

Service, recall and return exercises required in certain industries would get a major boost if accurate product genealogy data were available. This would root out false claims and fraudulent practices, since each part would have a unique ID number that can not be copied by identical duplicates, thereby helping to identify registered users and their transactions, while also easing product or part recalls in the event that a manufacturing defect is discovered. Servicing, maintenance and performance thus all become easier to track.

WIP Tracking

To reap the entire range of RFID’s benefits, it makes sense to employ the technology at the outset of a product’s manufacturing process. Goods and their components can have all of relevant information stored on tags for genealogy and tracking in all types of applications. Item-level identification is also necessary in sequenced production operations along an assembly line. RFID hastens product identification, and enables its integration into other systems without any wasted time. Automakers are able to ensure that the proper parts are matched to the specific chassis to which they are assigned. Loading and sequencing without any errors saves both time and money.

RFID makes it possible to track materials used to manufacture products, and when the quantity of a particular part is exhausted, the next lot is already in place. This proves to be a big time saver, and enables a company to enforce Kanban or just-in-time processes for replenishment, enhancing overall efficiency with lower inventories needing to be maintained, and lower operating expenses, without any risk of side effects, such as running out of materials.

Unlocking Value

Another use of the RFID tag is that it is utilized in many places to retrieve all information about a particular product from a company’s back-end database. But the technology’s real value extends beyond the tag—the whole RFID system can transform an organization and result in reduced operational costs.

Tags are just one component of an RFID system, which is just one component of a larger enterprise-information system. The technology’s impact is maximized with the proper software and processes, and the whole supply chain and other applications become equipped for the future.

Jason Acidre works as a Web-marketing consultant for eMobileScan, one of the United Kingdom’s leading online retailers of wireless bar-code scanners, and a provider of RFID readers and printer-encoders.