Recently, I was asked to present the advantages of RFID to supply chain and logistical professionals at the 26th Annual Materials Handling & Logistics Conference. The presentation was enthusiastically received. That same week, a lead
ing retailer forecast that the next big transformation of the global supply chain will be RFID implementation. The momentum is underway. Like an iceberg, the mass of retailers deploying RFID as a pilot or expansion, is greater than what’s visible. RFID delivers such substantial competitive advantages that many early adopters have chosen to remain quiet.
Accelerated RFID retail deployments are pushing RFID tagging further up the supply chain, to the manufacturing source. While tagging at the
store level can suit some retail business models, in most cases, the further up the supply-chain the RFID tag is applied, the more efficiencies and savings accrue to all players. Everyone in the supply chain can begin capturing as much ROI and as many advantages as possible from the start. As this happens, the power of RFID technology becomes too compelling for anyone in the supply chain to ignore.
Today, source tagging is driven partially by the need to comply with demands of the big box retailers such as Walmart, and J.C. Penny. When the expansion of item-level RFID begins across its 850 store chain, for example, Macy’s will be asking suppliers to attach RFID tags to replenishment items. As the benefits of RFID start cascading throughout
the supply chain, it will become clear that RFID is the logical solution to some of the industry’s biggest challenges.
RFID is simply the best, fastest and most accurate way to count. As items flow from manufacturing source to their final destination, RFID is able to count and track “hands free” with no manual or direct contact required. The quality data captured ensures that what’s being loaded and unloaded as goods transit from the manufacturing floor to the warehouse to the distribution center to the store to the shelf, is accurate.
Only RFID delivers data that is 99+% accurate, keeping all players informed about items that are in the pipeline, or in transit, in real time. This data can be aligned with customer demand to enable more precise forecasting and production. As economic conditions impose a new era of “lean and mean” on the supply chain, the visibility enabled by RFID is a key to improving performance and streamlining costs.
Independent analyst and research firm Gartner, reports that the number one priority and concern for almost all companies is inventory visibility. Without RFID, most retailers operate with staggering distortion rates that impact forecasting and ordering, sending flawed data up the supply chain. Gartner adds that over the next three years, a substantial number of companies—if not all— will invest in technology to improve visibility. We predict that technology with be RFID.
RFID is the ultimate technology facilitator; it works with existing Enterprise Resource Planning (ERP) and Warehouse Management Systems (WMS), enabling their maximum performance.
RFID enables collaboration, ensuring clear and consistent communication up and down the supply chain, on both the supply and demand side. Knowing with accuracy that all products are being properly packed and delivered, are accounted for in transit and reaching their final destination as specified, is a powerful win-win for everyone.