Applications of RFID Technology in modern supply chain management
Thesis Statement: RFID technology is a pivotal asset in various industries due to its ability to enhance efficiency, streamline operations, and provide real-time tracking, making it an indispensable tool for modern supply chain management.
Leveraging RFID Technology for Enhanced Supply Chain Management Efficiency
RFID (Radio Frequency Identification) technology has emerged as a pivotal asset across diverse industries, transforming supply chain management by improving efficiency, streamlining operations, and providing real-time tracking capabilities. This thesis examines the multifaceted impact of RFID technology on contemporary supply chain management, emphasizing its essential role in optimizing processes and maximizing organizational performance.
Raikar (2023) explains that RFID functions as a wireless communication technique utilizing electromagnetic waves to recognize and monitor tags affixed to objects, individuals, or animals. These tags, referred to as RFID tags, contain digitally encoded information accessible by an RFID reader. Unlike barcode readers, the reader doesn't require direct visual contact with the tag, enabling it to detect tags from distances of several meters. Widely employed across various sectors, RFID primarily facilitates the monitoring of object locations and movements, such as in supermarkets for tracking items or in factory settings for managing assembly line components.
The RFID reader serves as both a radio receiver and transmitter, utilizing an antenna to transmit signals to the tag. Upon receiving the signal, the tag responds by transmitting encoded data back to the reader. This interaction constitutes a form of automatic identification and data capture (AIDC), facilitating seamless data collection when the reader and tag are within proximity. Typically, the reader is connected to a computer or handheld device, which utilizes the acquired information to update the object's status (Raikar, 2023).
According to Raikar (2023), RFID tags are categorized into two types based on their power source. Passive tags lack an internal power source and rely on radio wave energy emitted by the reader to transmit stored data back to the reader. Conversely, active tags contain a small battery that assists in transmitting information. Consequently, active RFID tags can communicate with readers over much greater distances compared to passive tags. Additionally, tags can be classified as either read-only, allowing the reader to access information stored on the tag, or read-write, enabling the reader to modify tag data.
Contemporary supply chains are characterized by significant fragmentation, where each component operates independently. The lack of real-time data results in limited visibility, which can hinder decision-making processes. However, the adoption of radio frequency identification (RFID) technology allows manufacturers and retailers to surpass traditional barcode identification methods. This enhances visibility by providing more detailed data granularity and timely updates (Rangarajan, 2010).
RFID serves as an electronic identification method, presenting a promising remedy for the transparency issues encountered in supply chains historically. It has the capability to tackle real-time data challenges by bridging the gap between physical objects/items and computer systems, facilitating automatic identification of data and database population. Unlike individual barcode scanning stations that offer data solely at specific points, an RFID-enabled warehouse can deliver continuous data throughout the entire supply chain route (Rangarajan, 2010).
RFID tags have the capability to produce data spanning from suppliers through the manufacturing phase to sales, yielding efficiencies and effectiveness for the entire organization. Furthermore, RFID technology enhances the distribution process of goods (Carmago, Pereira & Scarpin, 2020). From an operational standpoint, initiating the identification process begins by affixing RFID tags to all pertinent materials and products. Subsequently, the tag is read, often occurring at the conclusion of a conveyor belt. Data extracted from the tag is transmitted to a database, typically hosted on the cloud. The product then proceeds to the distribution center for further categorization and onward transfer to retailers. At the distribution center, tag readers identify and segregate products to optimize distribution efficiency. Analogous procedures are replicated in retail establishments to recognize incoming products and relay the data back to the RFID enterprise database. Utilizing readers, product movement and whereabouts are readily discerned throughout the entirety of the process (Bhuvan et al., 2022).
RFID technology stands as a cornerstone in modern supply chain management, offering unparalleled benefits in terms of efficiency enhancement, operational streamlining, and real-time tracking capabilities. The adoption and integration of RFID systems present significant opportunities for organizations to optimize their supply chain processes, improve customer satisfaction, and gain a competitive edge in today's dynamic business landscape. As industries continue to evolve, the strategic utilization of RFID technology will undoubtedly remain essential for achieving sustainable growth and success.
References / Sources
Raikar, S. Pai (2023, September 18). radio-frequency identification. Encyclopedia Britannica. https://www.britannica.com/technology/RFID
Rangarajan, T. S. (2010). Enhancing Supply Chain Management Using RFID. Material Handling Management, 65(5), 22-23.
Camargo, L.R., Pereira, S.C.F. and Scarpin, M.R.S. (2020), "Fast and ultra-fast fashion supply chain management: an exploratory research", International Journal of Retail & Distribution Management, Vol. 48 No. 6, pp. 537-553. https://doi.org/10.1108/IJRDM-04-2019-0133
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