How the use of RFID improves the supply chain, visibility, and inventory optimization

How the use of RFID improves the supply chain, visibility, and inventory optimization

The history of RFID (Radio-Frequency Identification) dates back to World War II and the British technology used to identify aircraft as friend or foe. Another better-known ancestor of RFID was the magnetic stripe used in the sixties to protect products in stores. The stripes were detected by induction loops at the exit. In the seventies, the technology of a passive receiver with memory was patented, which, stimulated by a signal from the outside, gave the radio feedback through the built-in antenna – and this is how RFID was born, as we know it today.

At the beginning of the 21st century, I had the opportunity to watch a demonstration of the Metro AG store chain at the Dusseldorf trade fair. Shopping was done by putting the products into the basket which were scanned altogether at the gate placed by the cash register. Yes, it worked well and it was supposed to become a popular technology, but it did not happen for several reasons, which I will explain later.

How does it work? Put in the most general way, the microprocessor in the RFID tag stores the information packet and can, on-demand (or without) send this information by radio. The basic components of the system are a processor with an antenna and a reader with an antenna. Of course, in practice, it is a bit more complicated and diverse.

Types of RFID

Depending on the type of power supply, we can divide RFID tags into:

– active – power by a battery, the tags emit a radio signal by themselves and can be read from a considerable distance;

– passive – the current supplying the processor is generated by the reader, i.e. such a tag emits a signal only after being excited by the reader;

– chipless RFID – processor-free tags that are gaining popularity, working on the principle of wave reflection. Although they have many disadvantages, such as low data capacity and scanning distance, they are very cheap and easy to produce. They can even be printed directly on products using special printers.

Depending on how the data is saved, tags are divided into:

– ROM – read-only – coded at the production stage,

– WORM – write once – a blank tag can be written once and read many times,

– EPROM – rewrite and read.

In turn, due to the frequency, we can distinguish:

– Low-frequency RFID: 125kHz – works from close range, e.g. proximity cards;

– High-frequency RFID: 13.56 MHz – works from a distance of about 1 meter, e.g. credit cards, e-passports and NFC on phones;

– Ultra-high frequency RFID: 860-956 MHz (unfortunately there are differences between zones in the world) – enables reading at high speeds from a distance of up to 20 meters.

Each of these variants has, of course, its unique advantages and applications – from medicine and purchasing to mining and container transport.

RFID in logistics

From the logistics point of view, it can be assumed that virtually every variant of RFID technology will find application, but in different areas.

To begin with, active high-frequency tags can be used to mark intra-warehouse means of transport. That way we know which trolley is currently moving and in which section of the warehouse. By mounting receivers on exit barriers we can even control whether some of our pallet trucks did not end up on the semi-trailer of the truck just left, by accident.

In warehouses turning bulky goods on flat surfaces, you can successfully use this type of tags to locate goods and monitor their movement. And do so without an advanced WMS system and marking of location zones in the warehouse.

In such „ordinary” logistics, where we deal with pallets and cartons, both active rewritable tags and passive WORM tags have a lot to offer. We can use rewritable tags inside the warehouse for the purpose of marking internal carriers in transport, picking or upgrading processes.

In turn, we can successfully use WORM tags at the stage of either accepting deliveries or issuing goods. When receiving e.g. goods from a container and its palletizing, you can print visual data (code, name, etc.) with the contents of the pallet on a special label on a printer equipped with a coding attachment. The same and more can be saved in the label chip memory (e.g. date of receipt, container number, product batch, list of serial numbers on the pallet, etc.). This process is not complicated – all you need is an RFID printer (e.g. one of the popular ZEBRA RFID models) and special self-adhesive labels, which, apart from the printable surface, have an extremely thin electronic system embedded in them.

The same applies to the exit of goods from the warehouse. On the RFID label, you can encode not only the contents of the pallet with details, but also the recipient’s order number, delivery number, and pallet number in the delivery.

Modern logistics is increasingly a supply base for retail trade with an emphasis on smaller, often individual recipients. The use of RFID tags for marking individual products allows primarily for greater accuracy of pick & pack processes, but also faster acceptance of deliveries in stores, or rapid inventory of products on store shelves.

Benefits of using RFID

Despite the costs, there are several benefits of RFID technology:

– RFID tagged products can be instantly identified without being removed from the cartons and examined because the sensor does not have to physically “see” the product label.

– Accepting delivery to the warehouse can mean passing a cart with a pallet through the scanning gate, and the chip will provide the information about the contents of the pallet (of course, for control purposes, checking random content or weighing the pallets should be assumed; as a rule, we do this on a trial basis, and not on the whole good).

– When checking the inventory of a warehouse or a store, the pallet tag will confirm the contents, and for incomplete pallets – we can collectively scan the tags of individual cartons and even pieces. In the store, a walk between the shelves with a mobile reader is enough and the system will automatically count how many tags of what goods it has registered. From the point of view of, e.g. implementing the omnichannel strategy, this is invaluable functionality, because it brings visibility of product data in the store closer to real-time.

– The sales process based on RFID tags can also be easier (you do not need to pull products on tape) and is much easier to automate (combinations of the scanning gate and automatic cash register are already commonplace in many Polish stores today).

Costs getting lower

As I mentioned before – the initial barrier to the development of RFID technology was its cost. Today, however, the widespread and mass production has allowed the price of tags to go down to an acceptable level. Costs range from a few euros for an active, multiple-tag tag, a few cents for WORM passive tags, down to less than a cent for printing a simple chipless tag directly onto the product.

Especially the latter has a chance to replace today’s bar codes in the long run, because at a comparable price, they give more data capacity and do not require optical contact of the scanned product with the reader.

For the record – tags of this type can be produced in the form of ready, programmed labels, but you can also print them with a special toner containing elements reflecting radio waves.

Less mistake, faster delivery

In Poland, the best example of bold implementation of this technology in the supply chain, from production to sales, is the cooperation of LPP and Checkpoint. In 2019, the first stage of RFID implementation was completed using the multiple-time recording of RFID tags in clips. The assumptions were quite simple: a clip with a tag is attached to the product (clothing) already at the production stage. Then on delivery, tags are programmed at the entrance to the main warehouse (entered product data), and then they are tracked throughout the entire logistics chain – up to the sales process.

The clip is of course also anti-theft protection, it is removed by the cashier, the data is erased and then returned to the producers for recirculation by the central warehouse.

Of course, one might ask why tags are not saved at the production stage, but this is the specificity of the clothing industry – many small production plants with relatively poor IT infrastructure.

As a result of this implementation, it is possible not only to significantly reduce the number of errors in the release of goods to stores but also significantly speed up the process of accepting deliveries in individual logistics centres, as well as in the stores themselves. Of course, another benefit is the instant inventory, which can now be carried out quickly and efficiently at retail outlets once a week.

Using RFID in various industries

More advanced RFID applications can be found in the automotive and pharmaceutical industries, where tags are often used from the first stage of production to the finished product. Other areas that are increasingly affected by RFID technology include medicine (identification, patient electronic cards), veterinary medicine (clips and chips for animals) and personal data management (e-passports and even tests of soldier ID chips).

As of today, it can be concluded that since costs are no longer a barrier as they used to be, only imagination on the one hand and the lack of defined logistics problems in the organization on the other, are stopping the industry from the dynamic transition from a simple 1D scanner to modern radio technologies to improve the quality and efficiency of operations.

Photo: Hormann KG / YouTube

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