October 2006
Examples of 2nd generation RFID applications within the supply chain are picking up again in momentum as companies move on beyond the �romantic� 1st phase of the technology. Companies are now first asking themselves the key question of how RFID technology will add value and improve bottom line company results.
Numerous retailers, including Germany's Metro AG and Wal-Mart Stores in the U.S., view RFID as a way to manage the huge flow of merchandise in and out of stores more effectively, while at the same time reducing inventory losses and labor costs. The technology, for instance, allows warehouse personnel to instantly read an entire pallet of goods with an RFID chip-reading device.
Like retailers, logistics and manufacturing companies have also shown huge interest in RFID for improving their supply chain management systems. The use of RFID in logistics received an enormous shot in the arm from the formal approval of the EPC UHF Generation 2 (UHF Gen2) specification by the EAN.UCC international product numbering associations in February 2005. This marked a milestone in RFID technology, eliminating two of its greatest hurdles: standardization of the passive RFID technology and interoperability between tags, readers and printer. It is now not a question of if, but a question of when.
What benefits does RFID really bring to logistics and supply chain management? They include:
- reduced inventory levels due to increased confidence in on-hand, in-transit, and manufactured inventory levels
- minimized stock-outs and inventory shortages
- decreased operating costs due to obsolescence, expiration, and spoilage
- reduced labor costs through automatic identification and physical inventory counts
- decreased operating costs due to obsolescence, expiration, and spoilage
- streamlined recall processes due to ability to identify possible impacts to damaged product
- improved security, resulting in decreased theft and tampering
- maximized revenue and market share
- optimized logistics costs and effectiveness
With the rapid rate of globalization and the increasing threat from terrorism, the need to securely track and trace documents, parcels and products throughout the world is becoming ever more pressing. Brand owners need to validate that the products being sold with their brand name are authentic and safe for consumers.
Manufacturers and logistics companies alike require more effective tracking of their reusable assets such as trays, pallets, roll-cages, totes and kegs in order to reduce cost and improve return on the investment for those assets. Examples of applications include RFID tags to monitor pallets at CHEP, airports using RFID to track and monitor baggage, and postal and courier companies to monitor roll-cages.
Logistics service providers are expected to deliver more for less as competition in the industry stiffens further, and also adhere to the increased security requirements from customers and government authorities.
Some companies have thus taken the leap forward to implement RFID. IDTechEx has 30 detailed RFID logistics case studies in their database, some of them are:
- Botek Vagsystem, waste collection, Sweden
- BNP Paribas and Brinks, transport container access, France
- Chep pallet tracking, USA
- Dai Nippon Printing, returnable bottle containers, Japan
- DHL and Nokia, cellphone packages UK/Finland
- Hutchison Whampoa ,intermodal container logistics, USA, Singapore
- NYK Logistics, tracking containers, USA
- Xerox Copiers, Item Level, Europe
With the many application developments of RFID within the industry, Europhia Consulting has organized a symposium in Singapore themed 'RFID applications within the supply chain - 2006 and Beyond' to provide the logistics community a first-hand opportunity to hear industry leaders share their experience of RFID implementation for logistics and supply chain management, and have a platform to clarify their doubts and voice their concerns. Please click here for more information on the symposium.
