The RFID Effect on Supply Chain Management

Will RFID technology help remove humans from the supply chain?

Automation and robotics have long been heralded as spelling the end of human involvement in many industries. Or worse, creating some dystopian future where robot bosses make the work of humans more stressful and dangerous. But technology innovation marches on, and global supply chains continue to be positively impacted by technology adoption.

RFID asset tracking solutions have been successfully adopted into supply chains in Australia and around the world for over a decade. Using a combination of low-power data communication between inventory items carrying an RFID tag and strategically placed fixed RFID readers, RFID solutions are proven to improve the accuracy of stock counts and location data, and to reduce costs by minimising human intervention from production to distribution to point of sale. 

Roles traditionally undertaken by people such as stocktakes and monitoring the movement of inventory in and out of warehouses and distribution centres, can now be more accurately and efficiently completed with low-cost RFID technology solutions, so the nature of work in these settings will inevitably change. 

As the cost of RFID solutions for inventory management and tracking steadily decrease, it is becoming a very important piece of the puzzle in automating global supply chains to increase efficiencies and reduce costs. 

RFID technology could be considered the missing link in automating the supply chain.

Warehouse Supply Chain Management


How does supply chain technology reduce the need for people?

In supply chains, intelligent machines can help automate stock movement in and around warehouses for efficient stock picking and packing, with limited human intervention.

Another important piece of the puzzle is autonomous or driverless trucks. Trials are underway with autonomous trucks driving hundreds or thousands of kilometres. For example, in one case, a truck carrying watermelons was driven across the United States, without a driver.

It should be noted that this trial did include two people travelling in the truck for the ride, and they took control of the vehicle at the beginning and end of the journey. This is similar to airline pilots taking an aircraft through take-off and landing, but allowing the auto-pilot to fly the majority of the route. 

While we might be a number of years from driverless trucks traversing our highways, there is no doubt supply chains are becoming increasingly automated.

Where does RFID fit into the bigger picture?

RFID technology is complementary to technologies that automate warehouses and transportation. There are a number of key features of RFID asset tracking solutions that help further streamline supply chains:

Lots of data: RFID tags are far more information-rich than traditional barcodes. For example, they can hold information including order ID, product bin location, order status and location logs. As products and components move through various parts of the supply chain, links to powerful software provide real time database updates.

Accuracy: The ability to track to item level without direct line of site can increase inventory count accuracy from 65% to 95%, according to RFID Journal.

Streamline warehouse processes: Less manual counting and human intervention means stock can move in and out of warehouses fast.

Efficient inventory management: Reduce out-of-stocks by as much as 50% to help increase sales and keep customers satisfied (and spending!). Hold less safety stock with real-time knowledge about exactly how much stock is on hand and where it is at any time, to reduce the drain on working capital of holding stock as a buffer. 

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

One of the more recent and interesting applications of RFID technology for inventory management is when it is combined with drones or robots. Given the sheer scale of modern warehouses and the speed of product movement in and out, drones and robots can speed up the process of scanning inventory and reconciling stock counts in real-time to further improve accuracy. 

This process utilises a relay system so the drone or robot reads the tags around the warehouse, and transmits the data back to static RFID readers, which is then fed into software and databases.

Beyond the obvious benefits of RFID technology outlined above including increased inventory accuracy, less manual processes and reduced errors, it is the availability of real-time data to inform better business decisions that makes RFID an exciting supply chain technology solution.

With customised software and information provided by easy-to-use dashboards, businesses can make better decisions faster than ever before. Watching stock move in and out of retail and virtual stores means that products can be moved to where they are likely to be needed before it’s too late.

And as popular items move quickly from warehouses and out the door into the hands of customers, production can be ramped up immediately to meet unanticipated demand so sales are not lost, and customers remain satisfied. 

Just-in-time production also frees up valuable working capital to be deployed in more productive ways such as marketing and technology investment, not sitting idle in excess stock holdings.

What about people and jobs?

Predictions of the loss of human jobs at the hands of technology adoption are probably overstated in the short term, and understated in the long term. 

As new systems and solutions such as RFID asset tracking are adopted, trialled and rolled out by individual manufacturers, distributors and retailers, some human intervention is needed to test, monitor and iron out teething problems.

In the medium term, businesses are able to redeploy employees from menial and mundane tasks (such as counting stock, or manning gates at warehouses) to more productive tasks that drive business growth. Some jobs may be lost, while new ones are created, likely having a net zero effect on total employee numbers.

In the long term, tasks that can be done by machines better and faster than humans (and even all day and night) will mean that certain types of jobs will disappear. The pace of technology adoption will determine the speed at which job roles become widely redundant. Change is never immediate, and people will adapt to changing employment opportunities by choosing different paths and/or retraining for different roles in their organisation. 

Nothing likely to slow the speed of global supply chains

Technology adoption will continue apace as business respond to customer demands and seek efficiencies across the entire supply chain. 

As a small but important piece that can connect the dots to increase global supply chain efficiency, RFID technology solutions will increase efficiencies, reduce costs and significantly reduce errors. 

RFID technology solutions promise all this and more, and are helping transform global supply chain management right now. 

When you need to improve inventory management, speed up your supply chain and gain valuable, real-time insights to make better business decisions you need to talk to RAMP, the leading RFID specialists in Australia.