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Article #20: RFID for Supply Chain Management

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RFID technology is facilitating a major or carton/container level. Goods
innovation to supply chain management. assembled in these vessels are then
From an article by John Lorinc in the tracked in batches defined at the source.
December, 2006 edition of the Globe & The benefits, here, are that fewer tags
Mail Report on Business Magazine, "Every are needed, since a single tag is
year, according to an expert cited by the identified with a 'batch' of goods
Federal Trade Commission, American instead of the individual unit of
merchants lose as much as $300 billion product. Another benefit of tagging the
(US) in revenues because they've lost pallets and containers is to continuously
track of goods somewhere on the journey track the whereabouts of these vessels
between factory and store shelf." Lost used to move the goods and this helps to
revenues are not the only concern in the cut down these assets being lost in the
supply chain, improving the productivity supply chain and needing to be replaced.
in transporting goods and securing the Another reason to start an RFID solution
source of goods are also of concern to at the container level is because many
professionals managing the supply chain. individual products pose challenges for
RFID technology delivers solutions to all RFID technology by the way they are
these needs. packaged. Metal goods, goods that contain
Overview: liquids and very small items pose a
Where does an organization start to challenge to doing individual item
realize the benefits of RFID? To answer tracking. RFID solutions are available
this, an overview on the technology is a here, but the cost goes up considerably.
good start. The concept behind RFID is The direction of the technology is toward
simple; an item (the product, or a tracking all individual units of
pallet) has an RFID tag attached to it. products. With advances in RFID
The tag contains a small integrated technology, costs per tag will be driven
circuit (IC) chip that contains a unique lower and this will allow more RFID
ID and an antenna that allows it to tagging of individual product units.
communicate to an RFID reader. When the Open Standards:
tag is attached to the product or pallet The realization of the benefits of RFID
and then 'read' by the RFID reader, that technology is also very dependent on open
unique ID is then associated with the standards in the industry. Open standards
product or pallet through your enterprise will allow manufacturers, distributors
resource planning (ERP) system. This and retailer to use a common type of
unique ID stays for the remaining part of tag(s) and reader(s) while allowing this
product's journey from the factory, right hardware to interact with their own ERP
through the consumer's purchase at the needs and deliver the efficiencies
retailer. The RFID readers are then promised by RFID technology. EPCglobal
placed at all key junction Inc., the standards body that manages UPC
GAO - G2HE RFID for metal surface (Universal Product Code) information in
GAO 5700 GEN 2 portable reader/writer bar codes, sets the standards for how
points in the supply chain. As the basic product information is encoded in
products or pallets pass through these the RFID chips. The standard set for
readers, your ERP system is updated supply chain management is referred to as
immediately on the flow of goods. This "GEN 2". GEN 2 has brought significant
automation in the process reduces time advantages over the previous evolving
spent with manual entry and the potential standards of "Class 0" and "Gen 1" and
for human error of bill-of-lading these include:
details, provides real time updates on (a) GEN 2 can write to tags multiple
where goods are, makes more secure the times,
integrity of your product shipments and (b) GEN 2 has longer read ranges,
helps you address bottlenecks in the (c) GEN 2 has greater data storage
system faster. capacity and
A Starting Point: (d) GEN 2 has more reliable and faster
Therefore a good starting point to read rates.
deploy RFID technology is at the pallet






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