Realizing RFID’s Full Potential in the Supply Chain

It’s only a matter of time before more retailers and other industries make similar mandates and suppliers can get ahead by integrating RFID technology into their own operations.

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Audrius Merfeldas/

Recenlty, Walmart, with its over 4,600 locations in the United States, expanded the scope of its radio frequency identification (RFID) tagging requirements, largely impacting its suppliers and service producers. RFID tags are a type of tracking system that uses radio frequency to identify objects and transfer data remotely. These smart labels can store information such as serial numbers, item descriptions and even large amounts of data.

Though RFID’s roots can be traced back for decades, there’s been an exponential increase in the use of the technology as it’s becoming increasingly ubiquitous across various industries. Major contributors to this increase include RFID’s ability to track products through various stages of supply chain, from production to distribution and the point of sale, and some major retailers now mandating RFID label usage.

Incorporating RFID labels into a business’s systems and processes can be challenging, and in the advent of retailer-mandated RFID labels, some companies and brands may be unfamiliar with the steps necessary for compliance. Implementing RFID labels throughout the supply chain is an investment that businesses have to commit to upfront in order to purchase corresponding hardware and train staff. However, investing in RFID labels can deliver a worthwhile return with savings gained on process and labor efficiencies.

By harnessing the benefits of RFID and implementing it effectively, companies and supply chains can:

●    Increase inventory visibility and tracking

●     Enhance security and risk management

●     Optimize operations

Increased Inventory Visibility and Tracking

RFID technology enables real-time visibility into the specifics of movements and location of assets through the supply chain and across various industries. Traditional barcodes or labels don't have the sophistication of RFID, but thankfully, RFID labels can be easily integrated into existing packaging and labeling. Affixing RFID labels to the inside or outside of the secondary product packaging or as part of the prime label avoids costly rebrands or redesign.

With its unique identifiers and radio waves, RFID helps companies track all products, parts, and equipment with a new level of accuracy, at every stage of the production and distribution process. In turn, everything from inventory levels, shipment tracking, and potential bottlenecks can all be identified in real-time. Inventory control is crucial to avoiding shrinkage issues with retailers.

The level of visibility that this RFID technology allows for is also vital among the healthcare, grocery, and life sciences industries with strict regulatory requirements that demand accountability and compliance for their supply chain process.

Enhanced Security and Risk Management

Supply chains that equip assets with RFID technology also benefit from overall increased security and risk management.

Utilizing the same RFID labels for tracking products through the supply chain, companies can also monitor and detect theft, as well as prevent unauthorized access to certain areas of facilities. In some cases, RFID labels can be equipped with a dual tag of ultra-high frequency (UHF) and Electronic Article Surveillance (EAS). These labels serve a dual purpose, with UHF used to track inventory and the EAS providing an anti-theft component. RFID can provide an extra layer of security that helps companies manage their risk.

Optimized Operations

With increased visibility into the supply chain via RFID technology, comes a better understanding of company logistics, leading to more strategic thinking and ultimately enhancing operations and efficiencies across the organization.

RFID technology’s ability to automate data capture and enable real-time inventory tracking and management frees up workflows and improves resource allocation. Using RFID labels for everything from optimizing storage space to minimizing excess inventory, or decreasing order times, these data-driven decisions lead to lower operational costs and an overall increase in productivity.

Unlocking Efficiency with RFID

With complex and interconnected supply chains, driving efficiency is essential to staying competitive, and data captured by RFID technology enables companies to stay nimble. RFID technology continues to prove its relevance. In fact, Walmart’s RFID mandates will likely serve as a catalyst for other retailers. Many companies like Dick’s Sporting Goods, Nordstrom, and BJ’s Wholesale Club have already instituted their own RFID programs and mandates. It’s only a matter of time before more retailers and other industries make similar mandates and suppliers can get ahead by integrating RFID technology into their own operations.