CIO Talk

RFID Technology – Digital transformation in Logistics Industry

RFID industry can help enterprises increase the exchange quantity and accelerate the flowing speed of information to promote the efficiency and save the cost. It can provide the strategic significant incremental benefit to the supply chain of manufacture, logistics, wholesale and retail industry.

“If RFID technology closely integrated into every process of supply chain, it may replace bar code technology in very near future and take revolutionary changes to logistics.” – Ajay Yadav, Head IT (North), Arshiya Rail Infrastructure

An RFID system is comprised of electromagnetically responsive RFID tags and RFID readers. Embedded within each RFID tag is unique information.  Attaching an RFID tag to an object such as inventory or goods makes it possible to track and monitor placement and movement, making it traceable throughout transport.  This has made RFID useful in supply chain logistics, especially for tracking shipping containers, components used in the manufacturing process and for other similar purposes

RFID Readers are the main communication initiator between reader and tags. The Reader sends the modulated signal to tags and after that tags respond back with specific commands. An RFID tag does not necessarily require “line of sight” as in the case of barcodes.  Instead the readability distance is determined by whether the type of RFID tag is passive or active. Although RFID readers can be fixed or mobile, Smart phones cannot be used to read RFID tags as they are in the case of barcodes Reader then collects the information from tag and sends it to the middleware. Middleware is the software which manages the whole data for the application. Most of the middleware has the connectivity with the existing ERP (Enterprise Resource Planning) system. Now a day’s RFID is used in enterprise supply chain management to improve the efficiency of inventory tracking and management.

Logistics & Transportation is a major area of implementation for RFID technology. For example, Warehouse management, Yard Management, Shipping & Freight and Distribution Centers are some areas where RFID tracking technology is used. Logistics/Transportation companies value RFID technology due to its impact on the business value and efficiency.

Most Logistics and SCM companies believe that RFID can make their operations more efficient and build a competitive edge in their market. The RFID technology is a flow control technology. It can provide the strategic significant incremental benefit to the supply chain of manufacture, logistics, wholesale and retail industry. RFID industry can help enterprises increase the exchange quantity and accelerate the flowing speed of information to promote the efficiency and save the cost. It can help the company in the following ways

  • Improving in transit & asset visibility.
  • Improve receive/shipment/ transportation cycle.
  • Improve accuracy out bound benefits
  • Labor productivity & process.
  • Reduce shrinkage losses.
  • Inventory management & control.
  • Demand/ Forecast planning.

It can integrate all supply activity supplier, deliverer, transporter, and third-party logistics company and information supplier. The typical application of RFID in logistics management is tracking. Technically, we can stick tags on the plate, packing box or equipment to automatically save and transmit the style of the equipment, sequence number and other information. The tag can transmit the information to read-write equipment distance away, so the equipment and end-product don’t need to be scanned by the handset to read bar code in warehouse and workshop. This can reduce omission, promote efficiency greatly. This application model can reduce the cost and clean up barriers in supply chain. By the close integration into supply chains, RFID may replace the bar code technology in future. The key of the modem logistics management is the automatically identification of product container, vehicles and staff. Some information need to be transmitted and reflected real-time in MIS system and ERP system in the company. RFID can totally accomplish these functions, thus, it can be applied universally in the logistics management.

In cases where read-write equipment is placed within the warehouse, all in-house movements are additionally registered in the system. This allows for strategic planning of product locations within the warehouse.

The information that is gathered with RFID can lead to significant improvements as the tracking and handling of the products can be done in real-time and with great accuracy. In the warehouse, products are easily located as all product movements are tracked and this information is automatically registered in the system. Whilst stock is accurately tracked valuable information concerning losses is also recorded.

Around the world, the most popular way to transport large amounts of cargo is to use shipping containers. Container transports are oftentimes chosen as they ensure safe and secured transportation, low costs, standard packaging and high transport density. Companies that use RFID in tracking and managing of shipping containers are able to track containers in each link of the supply chain. Active RFID Tags can be used to track containers in real-time in yards and docks. Ultra-high frequency RFID technology has long identification distance and speeds up identification.

RFID in container management and tracking:

  • offers visibility of real-time cargo movement
  • improves efficiency
  • increase accuracy

RFID in warehouse processes offers:

  • visibility of accurate real-time information
  • fast locating of products
  • possibility to record losses
  • ability to plan product locations strategically

Although, logistics is one of the application areas of RFID, if RFID technology closely integrated into every process of supply chain, it may replace bar code technology in very near future and take revolutionary changes to logistics.

Throughout, the warehouse management, combining receipt, collection, shipment plan set up by the supply chain planning system to RFID system, it can complete all kinds of business operations with high efficiency, as designating storage areas collection and supplementary supply. RFID technology can increase the accuracy and operating fast, significantly improve service quality and reduce operating costs, save inventory space and labor cost by reading code. It could also reduce the overall loss due to the misplacement wrong sending, theft damage and inventory shipment error. RFID can provide the accurate information of the inventory, thus, management staff can quickly identify and correct operational ineffective situations to achieve rapid supply and reduce storage costs as much as possible. One of the most popular uses for active RFID tags are in monitoring high-value cargo, packages, assets and equipment in warehouses, railways and other supply chain facility yards.  Because the readability range is greater, there is less need to have as many RFID readers.  This helps to reduce the overall cost of using RFID.

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