RFID asset tracking drastically improves warehouse performance

Warehouse operations aren’t very glamorous, but they do provide a huge opportunity for improved performance as a key part of the supply chain. Warehouses and distribution centres represent a critical link as products move through global supply chains into the hands of customers.

The primary role of the warehouse is to efficiently receive and store goods and products, then quickly ship them out to fulfil production, retail and e-commerce orders, with little friction and minimal errors. This is easier said than done.

Futuristic scenarios involving AI, robots and even drones swiftly sweeping the aisles of massive warehouses picking and packing orders herald an exciting new era of supply chain technology. But right now, it is humble radio waves in the form of RFID (Radio Frequency Identification) technology solutions that are having a huge and positive impact on increasing the efficiency of warehouse operations.

What is RFID and how does it work?

RFID asset tracking solutions are well-established and proven for keeping track of a range of valuable assets of all sizes including inventory, vehicles, equipment, machines, technology, art and even people.

RFID stands for Radio Frequency Identification. It uses radio waves for low power data communication between RFID tags affixed to assets such as inventory and products, and RFID readers that can be handheld or fixed at strategic locations to record the movement and location of tagged items. 

Underpinning an effective RFID inventory management solution is customised software that records and organises vast amounts of data. This is one of the key differences between RFID solutions and traditional barcodes. Barcodes are static and convey little information beyond basic product characteristics. RFID tags are ‘smart’ and capable of holding a lot of information, including: •Order ID number •Product bin location •Order status •Serial numbers for individual product components •Location logs

As products move through an RFID-enabled supply chain, information can be matched across other software and databases, providing valuable, real-time insights on status and location.

Another important difference between RFID tags and barcodes is that RFID tags don’t require line-of-sight scanners and reading equipment. Powerful RFID readers can accurately identify tag locations in large spaces (such as warehouses) and among thousands of items. 

With RFID, items can be scanned and catalogued even if they are ‘hidden’ behind other pallets, boxes or items. Further, multiple tags can be detected and read simultaneously for maximum efficiency. 

RFID and warehouse operations

One of the biggest challenges in warehouse and distribution centres is that the faster products are moving, the harder it becomes to keep track of them efficiently and accurately. RFID decisively addresses these issues:

Warehouse efficiency: Finding and recording data for individual products located in a warehouse is time-consuming for employees who need to physically move between product locations and scan each item in turn from very close proximity. With RFID, employees can easily locate and update data with an RFID reader ‘sweep’, and quickly move on to the next location or task. And the work of picking and packing is made much more seamless with accurate location data readily available. 

Reducing human errors: Removing manual input with automatic data logging between tagged items and RFID readers significantly reduces the risk of human error as products move in and out of, or around, a warehouse. RFID solutions can deliver greater than 99% inventory accuracy to ensure the right product is in the right place at the right time, and 100% auditing of all shipments in and out of the distribution centre without opening any boxes. This reduces costly delivery errors and the time it takes to work out how the mistake was made in the first place. 

And as mentioned earlier, another significant improvement that RFID delivers to warehouse operations is the collection of a massive amount of data. This provides real-time insights that help inform better business decisions around production, stocking and warehouse layout.

The bigger picture

While there are obvious benefits with the adoption of RFID asset tracking technology in warehouses and distribution centres, this is just one part of the supply chain puzzle.

Looking at the bigger picture, RFID solutions that reach from one end of the supply chain to the other provide a range of additional benefits in inventory management:

Reduce out-of-stocks by as much as 50%: RFID technology helps increase sales and keep customers satisfied (and spending!).

Hold less safety stock: Knowing exactly how much stock is on hand, and where it is at any time helps reduce the drain on working capital of holding stock as a buffer.

Reduce shrinkage: Slash shrinkage and stock loss by more than 50% to save replacement costs and eliminate the need for time-consuming audits.

Omnichannel success: Manage multiple channels simultaneously and efficiently with traditional retail, ship-from-store, in-store pickup and online sales.

Of course, this is easier in a vertically integrated supply chain where a business is responsible for manufacture to distribution to warehouse to retail (stores and/or e-commerce). But as the uptake of RFID continues to grow, and the cost of implementation continues to fall, system-wide integration can be achieved.

Serialised GTIN (SGTIN) is emerging as a universal standard where any participants in a global supply or value chain can utilise unique codes for all products to create a seamless and fast flow from sourcing to manufacturing to distribution to point of purchase.

With products and items tagged at point of manufacture, RFID readers located strategically throughout the entire supply chain, and software systems are integrated, efficiency is maximised and products can be tracked accurately right through from production to their arrival in the hands of the customer.

From the warehouse to the penthouse

RFID technology solutions are proven to keep track of valuable stock and inventory within warehouses and distribution centres in a fast-moving supply chain. With greater accuracy and real-time information, businesses can better meet customer demand, increasing customer satisfaction and retention.

At the same time, more efficient operations and improvements in asset utilisation deliver bottom line benefits.