Smart Shipping Made Easy

Why High-End Product Manufacturers Are Adopting RFID Technology

Maybe It’s Time to Revisit the Value of RFID Item-Level Tracking

by Paula Heikell

Radio-frequency identification (RFID) technology appears to be one of those “stealth” inventions that hit the market with a boom then RFID tagpractically went silent for years, kind of similar to the introduction of recordable compact disks or CDs.

The invention of recordable CDs to replace floppy disks was all the buzz when first announced in 1988. Everyone wanted them. But the systems and the disks were expensive, and the sizzle was over. The market stopped writing about them, but they still quietly and steadily replaced the floppy disk market and moved on to capture much of the music and video recording world without anyone paying much attention. (Until USB drives came out, that is.)

This same phenomenon seems to be happening with RFID technology.  When RFID technology first came out in the early 2000s, it received much hype for all the benefits it could deliver in asset or inventory tracking. But the technology was expensive and not as easy to implement as proposed. Operations managers continued with traditional barcoding solutions to manage tracking, especially for low value products.

Who is Adopting RFID for Item Level Tracking?

A decade later the hype is gone with the wind, but item-level RFID technology is playing a much more important role for many retailers, especially in apparel and footwear, according to RFID innovator Dean Frew, who founded software maker Xterprise in 2002, and is now president of SML Intelligent Inventory Systems.¹ Nowadays, RFID tags of all shapes, sizes and durability are available and applicable to a wide ranges of products and industrial environments.

RFID tags

At ADSI, we’re seeing a surge of interest in other industry sectors as well,such as high-end computer hardware, large machinery, furniture and other high-value products. These companies are in the process of replacing their barcode-based systems with RFID to track inbound receipt of goods as well as the internal movement of products as they go through assembly.

Why the Growing Interest?

Lower cost of adoption. According to a recent Journal of Commerce article, a passive RFID tag that cost 33 cents in 2003 now costs about 10 cents.² Between that price reduction and the continuing advancement of RFID capabilities in mobile computers, it is becoming an attractive option for more companies seeking to improve visibility and reduce costs.

Time savings. For example, one company that produces large network servers has accelerated the process of receiving large shipments of servers from 30 minutes or more down to less than five minutes. This is tremendous savings, due to the fact that the receiving team no longer has to physically walk up to and scan each server to verify it.

Workflow optimization. Another of our customers is replacing traditional barcode-based tracking with RFID to track the movement of computer components as they move, via carts through the assembly. The new system gives them 100% visibility into parts availablilty needed to keep the assembly lines moving and pre-empt any sudden shortages that could stop the lines. Yet another customer has implemented it to track furniture parts as they are put away during receiving. This eliminates the need for staff to search in multiple locations for the parts they need to assemble furniture.

Tracking of high-value field equipment. In another example, we’re working with a police department who plans to use RFID to track equipment such as scanners, mobile computers, etc., that police staff use on their daily rounds.

Practical Tips

If you’re interested in evaluating RFID technology for your operations, you’ll quickly find that there are many companies offering RFID products. But it’s important to consider in terms of the total ROI they can deliver. For best results, look for:

  • An RFID provider who offers more than just the equipment. Ideally, choose a vendor who offers both the software and the hardware you will need, as well as implementation services. You’ll drive the best ROI by ensuring that the data you’re reading from the RFID tags is shared with the right back-end systems such as your order fulfillment software and shipping software system for monitoring and decision making. Your provider should have integration experience to help accomplish this.
  • Make sure the RFID software is flexible. Some vendors offer software with the hardware, but it may provide limited flexiblity. They may even suggest that you’ll have to alter your processes to make the RFID solution work. Don’t settle for this. Choose a vendor whose software can be configured to match your processes, not vice versa.
  • Industry experience. This is not a “one size fits all” technology. The parameters that characterize a manufacturing or distribution installation versus a health care installation are quite different. Choose a vendor who has the right experience.
  • Ask for references. As in any mission-critical technology solution, you want to be sure that the vendor you has choose previous project experience and positive results.

If you have questions about the viability of RFID item tracking in your operations, ADSI can help. Please feel free to send an email to info@smartshippingmadeeasy.com today.

Copyright © Advanced Distribution Solutions, Inc. (ADSI). All rights reserved.

Learn More

Click to watch video.
Click to watch video.

Video: How RFID Accelerates & Improves Inventory Planning

Data Sheet: ADSI RFID Solutions for Real-Time Inventory and Asset Tracking

¹ Alan M. Field, “RFID Technology Finding its Footing in High-Value Goods,” Journal of Commerce, September 13, 2015.

² Alan M. Field.