Supply Chain : Problems with Radio Frequency Identification
Introduction
The concept of Radio Frequency Identification was first developed in the 1950s as part of the Toyota Production System. Over the years, Radio Frequency Identification has evolved to the extent that nearly all sophisticated supply chain management experts tend to employ it.
As in all fields and all forms of technology, supply chain managers working with Radio Frequency Identification are constantly working to improve it. It is thought that soon, adopting sensor based Radio Frequency Identification technology will allow for the creation of a sensor connected, real time manufacturing outlet. Through adding Radio Frequency Identification markers to every piece of equipment, every product and resource that the manufacturer uses, better demand signals from the public will be the inevitable result.
Problems with Radio Frequency Identification
There are still problems when it comes to the development of Radio Frequency Identification. For example, the cost of tags is still rather high. Another problem is that readers are not always able to read all the cases on a pallet. There is no one size fits all in terms of tag design and frequency. What’s more, the standards of the technology are still in a state of chaos and evolution. Radio interference can upset plans, even well laid plans, and oftentimes end users do not have the knowledge to deal with this sort of technology.
Wal Mart dealt with this final problem by issuing mandates to each of its suppliers on its supply chain. By the year 2005, Wal Mart and several other high profile organizations (including Target, Tesco, and the United States Department of Defense) had asked their top suppliers to incorporate the technology in to all their pallet shipments. Ultimately, Wal Mart had to relent, as the deadline would have been too difficult to meet, but they are currently on their way to having the technology in several hundred stores and dozens of distribution centers.
But it is not just retailers who are adopting this technology. DHL, NASA, YCH, Dolomiti Superski, Las Vegas’s McCarran Airport, and NHK are among the other early adopters of Radio Frequency Identification.
No matter when it catches on, one thing for certain: once it does, Radio Frequency ID is going to be a major business boost. It will help every facet of the supply chain. Producers will benefit from the technology via an increase in inventory visibility, as well as a more efficient use of labor, improved fulfillment, and higher quality line operations. Retailers can use the technology to reduce their inventory, as an increase in supply chain visibility will allow for better demand forecasting, as well as lower safety stocks and lower order cycle periods. Automated data capture features will also aid the process of cost cutting via a reduction of labor in the warehouse and shop. Stores will no longer have to worry about losing sales due to out of stocks.
In addition to the benefits of the retail industry, production as a whole will benefits in its newfound ability to fine tune the entire supply chain, effectively optimizing efficiency while also minimizing waste and inventory stocks. A Radio Frequency ID tag in car sub assemblies aims to make safety checks and recalls a lot easier, not to mention faster. Sub sea structures Radio Frequency ID tags will make maintenance and repair in such industries as oil a lot easier. Hospitals will also benefit by being able to maximize their returns on assets via the ability to track the whereabouts of expensive live saving equipment.
The pharmaceutical industry will also greatly benefit with this new technology. The industry will be able to eliminate the practice of counterfeiting by giving each unit a unique EPC (Electronic Product Code.) Thus, data can be recorded easily and will be accessible to all supply chain partners on a drug’s current location.
In fact, Radio Frequency ID technology is bound to have a positive impact on numerous industries. In the consumer electronics realm, customer returns can be easily facilitated. Port safety and security will be improved greatly. Safety conditions will also improve in aerospace. The field of logistics will be able to better handle truck, container, and shipping yards, as well as all cross docking. It is also believed that consumer packaged goods in general will be the subject of better reconciliation on the receiving end, as well as improved lot tracking and product recall.
Conclusion
Radio Frequency Identification should be viewed as belonging to a broad sector of sensor based technology. In addition to the familiar technologies represented by barcodes and magnetic stripes, other aspects of this technology include integration with equipment like sensors, dimensioning devices, and scales to control such components as temperature, moisture, and position. Some hybrid sensors are already on the market; these sensors combine Radio Frequency ID tags with temperature sensors and embed it all in to the form of a barcode label.
It has been confirmed in numerous studies that Radio Frequency IDs, as well as other sensor based technology, is the way of the future. All companies with a keen interest in creating a competitive advantage for themselves should be interested in this technology. But in order to successfully integrate it in to their business model, the firm will have to leverage their information architecture in a strategic manner.
Tons of data will be created as a result of RFID installation. Users thus need to make sure that their information architecture is capable or processing, analyzing, and responding to all this new data. Otherwise, it will not do the firm’s supply chain much good.
Radio Frequency ID technology is definitely here to stay for the long run. The faster one’s business embraces it, the quicker it can reap the many rewards. It is costly at this point to invest in this technology, however. Thus, each company must evaluate its business processes to determine where this type of technology might be best employed.
