3 business cases for RFID in the warehouse

July 20, 2018 – Vladimir Shapiro, Consultant Internet of Things

RFID has been increasingly emerging as the dark horse of IoT-enabling technology. Possessing the “holy trinity” of technology by being affordable, reliable and durable, RFID has proven to be invaluable for the digitalization of the supply chain. While there is substantial variation in what an “RFID solution” can look like, there are common features shared by any such project:

  • RFID-based tags that are capable of recording large amounts of relevant product data
  • RFID readers (stationary or portable) acting as read/write mechanisms for the tags in question
  • Software systems that are able to integrate, process and act upon the RFID-collected information

One particular area where RFID solutions have proven to provide immense value are high-volume warehouses and distribution centers. At a high level, there are three main pain points that an RFID solution can address for such operations:

Automated Inbound and Outbound processing

Whether inbound or outbound, processing areas have the potential to become bottlenecks and sources of substantial labor costs. On the inbound side, RFID-enriched pallets and containers allow us to automate the processing of deliveries by scanning dozens of tags simultaneously and immediately recognizing all the relevant inventory information. With the scanned data automatically integrating into the warehouse management system, this automates the previously manual handling unit inspection, system information entry and putaway task assignment.

For the outbound side, the idea is very similar but occurs in reverse order. As warehouse workers assemble outbound orders and pack them for delivery, RFID tags can be scanned to identify the exact contents of freight orders, which can automatically be recorded and integrated into the Warehouse and Transportation Management systems.

Inventory Location Tracking

The plague of any high-throughput warehouse is inaccurate inventory location information. The traditional antidote to such a problem is to deploy an army of workers to check and monitor system accuracy. While not only becoming a cost source, this approach is also prone to human error due to the manual nature of the process.

The benefit of RFIDs, whether implemented at the pallet, bin or section level, is in the solution’s ability to identify exactly what inventory is where, while minimizing human involvement. There are various degrees in the level of automation with such a solution. These range from hand-held scanners that simply reduce manual-input error, to fully automated active RFID solutions, which provide minute-by-minute live inventory visibility.

Track and trace capabilities

The third value-add that is worth mentioning is the track-and-trace functionality that is offered with RFID. In simple terms, the memory function of the chips allows you to keep track of the entire lifecycle of your inventory. Particularly useful for perishable goods, such as food & beverage and pharma, RFID solutions allow us to easily track the genealogy of any given batch by recording the what/where/when for the duration that the inventory is in the warehouse.

This, in turn, allows you to prove product integrity to any customer or regulator and, in a worst-case scenario, minimizes the damage of recalls by enabling the supply chain team to pinpoint the exact source of the problem.

Let’s explore further

Although RFID technology has been available for decades, recent advancements have made it a staple in supply chain digitalization, particularly in the warehouse. As with any such initiative, it is important to remember that a successful warehouse RFID project must involve the successful integration of a hardware and software solution. If you are or your team are interested in exploring the value of RFID in the warehouse, reach out to Phillip Azanov or Matthias Hollenders to schedule an initial chat. We look forward to hearing from you.