The Uses of RFID Tags

The usage of RFID tags has been picking up momentum for several years, but 2010 has increased proliferation for three main reasons: 1] cheaper equipment and tags, 2] increased reliability and performance (up to 99.9% accurate now); 3] the agreement of an international standard for UHF passive tags.

Cost has always been a prohibiting issue, but a Korean firm has declared that it will have passive RFID tags for sale for about three US cents each by the end of 2011.

Historically, the biggest user of RFID tags was and still is the US Department of Defense. The armed forces use smart tags to trace the containers of their hardware and sometimes individual pieces of hardware too. The aviation industry has also been using them worldwide for a long time.

The latest industries to discover a use for the passive tags are financial services for IT asset tracking and health care, where more than 60% of the top medical device companies are using passive UHF RFID in 2010.

Companies that have not come up with a reliable system to track their stock and know exactly what they have of everything that they sell are apt to carry surplus levels of stock to ensure they can supply their customers’ requirements.

If you can reduce excess stock by using improved information, you can: trim down investment, storage space, labour costs; and expand asset utilization, increase stock turnover, facilitate faster billing cycles, all of which will significantly contribute to cash flow.

In short, the adoption of RFID:

1] Eases stock control and item location in real time, which cuts product search time, reduces inventory levels and improves control of the manufacturing process.

2] Improves compliance, improves work-in-progress (WIP) productivity and cuts the cost of the finished goods.

3] Enables the real-time monitoring of production, order fulfillment, and distribution processes and their level of efficiency.

4] Enhances profitably and ability to meet demand rapidly and lowers inventory costs.

5] Lowers labour costs by eliminating manual steps.

6] Improves order and shipping accuracy by helping to make sure that orders are dispatched complete, error-free, and on time, which thereby raises customer satisfaction and the likelihood of repeat orders.

7] Provides extremely accurate real-time data capture by means of warehouse management systems (WMS) and enterprise resource planning (ERP) systems.

The way forward is to begin with the goods-in bay. Goods arrive with shipping labels, but they are often inadequate in quality and information. It would be best to make a new ‘identity badge’ for all goods received at this point. All the pertinent information that you have on the goods delivered can be put of an RFID tag and affixed to the pallet, the crate or even the items themselves.

Now these articles can be added to stock and the computer will always be able to reveal what the goods are in the box, how many of them there are and where they are located in the warehouse.

The simple procedure of creating an RFID tag at the unloading bay and attaching it to the items received can save hours of time wasted checking up on stock levels and thousands of dollars wasted in overstocking.