RFID - Radio Frequency Identifiction

Asset Tracking

Radio Frequency Identification

Radio Frequency Identification (RFID) is often used as a basic term to describe all wireless tracking devices that use radio waves.  Convenience and productivity can benefit from the use of RFID technology. RFID is currently being used in everyday tasks such as EZ Passes for express lanes, “chip” implants on pets for tracking should they become lost and in some instances RFID can be used as a biometric identification method for secure areas.  One benefit RFID has over traditional UPC barcodes is the RFID technology can work without being directly visible to a scanner or sensor.

 There are only three required components to an RFID system.  The first component is the tag; currently most tags are coin size, however, tags as small as specks of dust have been developed.  The tag sends out a signal to the second component known as the reader or interrogator.  The reader gathers the information contained in the radio frequency emitted from the tag and sends it through the third component, the RFID software program.  This program can then process real time information to provide instant feedback to suppliers for inventory and shipping control.

 Although its technology has been applied to several areas of business, the essential function of RFID is to track items and record their data. 

 Asset tracking is currently the most widely used application.  Tags can be affixed to valuable assets to track their movement through a company.  Air Canada uses RFID technology to help track food carts used on airplanes.  This has allowed Air Canada to lose fewer carts and also spend less time inventorying its carts and better manage cart needs around airports.

 Manufacturing plants continue to integrate RFID technology into their processes.  A benefit of RFID technology is the tag does not need a direct line of sight to the reader.  This allows manufacturers the ability to position stationary readers at the beginning and end of processing area.  The Boeing plant in Wichita, Kansas now installs RFID tags on all inventory items received.  As parts move through the production line they no longer need to be manually scanned in and then manually scanned out as they pass to the next station.  This reduces production time while eliminating the need for a human to scan the old UPC codes.

 Today’s supply chains need to be efficient, minimize cost and provide the end customer with a great value.  The best way to achieve these goals is to better streamline information throughout the supply chain.  RFID technology is helping supply chains achieve those goals.   

 In a traditional retailer the receiving process is overly complex and requires unnecessary laborers.  Pallets received must be scanned and matched against purchase order forms.  Once discrepancies are resolved the pallet is broken down and sorting for storage or sent to separate areas – as in a distribution center.  Distribution centers (DC) can have miles of conveyor belts sending thousands of items through them each day.  Manually scanning the product at each interchange of the conveyor belt not only adds to the labor expense but also increases the possibility for error.

 Today many retailers make suppliers ship inventory to them already equipped with RFID tags.  Tagging pallets or cases helps retailers expedite the receiving process and helps control errors and labor costs.  For some companies such as Wal-Mart/Sam’s Club fines may be levied against their suppliers who do not tag their shipments. 

 Many retailers are bringing RFID technology from the backroom directly to the customer – whether the customer realizes it or not.  In fact, beginning in August of 2010 all men’s jeans and underwear sold at Wal Mart were required to have individual RFID tags imbedded in them.  Wal Mart believed, “This ability to wave the wand and have a sense of all the products that are on the floor or in the back room in seconds is something that we feel can really transform our business.”  One can imagine the savings created by waving a handheld device in the direction of a men’s department at Wal Mart and nearly instantly being provided with detailed stocking information.  This ease of access to information is, however, causing some to question if technology is encroaching on one’s right to privacy.

 RFID technology, like other recent technology, is raising questions with consumers about privacy.  In the example of Wal Mart jeans, proponents argued information from RFID tags is constantly being signaled to RFID scanners.  If someone wanted they could scan a large crowd with a handheld scanner and identify anyone in the crowd that is wearing the Wal Mart jeans and target them – potentially to market other products to them.  The government has not interjected yet but as use of the technology grows along with consumers’ concerns there will likely be a need for government intervention.

 As businesses try to compete in a growing global industry, those who prove to be nimble, with a constant goal of improved efficiencies will succeed more often than not.  Radio frequency identification is one new bit of technology that is only starting to be utilized in a way that will positively impact a company’s balance sheet.