How does RFID affect the supply chain of the manufacturing industry?

RFID is revolutionizing the inventory tracking method in the supply chain. This technology ensures that the right products reach the customer's hands as needed and that the inventory of the distribution center is controlled at the optimal level.
For manufacturers, RFID technology is bringing about labor savings and operational efficiency improvement, thus increasing the operating income of the entire production line and distribution process. Manufacturers can track products at various control points except production lines and production lines. RFID technology enables end-to-end data visibility, automates prediction, and forms a real cooperative network among all business partners.
For retailers, the consumer-driven supply network can bring about real-time demand acquisition, effective inventory control, and improved relationships between manufacturers. RFID technology collects real-time information related to each object and stores the information in the supply network. All partners in the value chain can access the information at any time. This technology helps to achieve the transparency of product information in the entire supply chain and facilitate effective product management.
RFID is a smart tag that uses Wireless RF technology. Unlike bar codes, RFID not only stores information, but also automatically sends information to a dedicated RFID reader wirelessly, the stored information can be written to or re-written to the chip in the RFID tag. Attaches tags to various objects. When the object is detected by the reader, the TAG content can be read, and the tag does not need to be within the line of sight. Finally, the reader sends the information in the tag to the backend system for processing through the enterprise network. RFID tags can be added to products in the manufacturing process. They can be added to a single product, a packing box, or a tray.
RFID has a variety of purposes: Animal Identification, access control, anti-theft retail system, asset and inventory tracking, automatic highway charging, container and air transportation tracking, fleet maintenance and security. In the past few years, RFID has begun to come out of the experimental phase. The focus of people's attention to RFID is its fundamental influence on enterprise data strategies. Recent efforts are focused on simplifying data access within an enterprise and maintaining data consistency. Understand the progress of the product in the manufacturing cycle, and then determine the position of the product on the shelf. In this way, the product visibility is achieved, and the physical location and status of the product are determined, this includes information such as when to produce, when to receive, and where to place it.
In the long run, RFID technology will increase data and promote the formation of transaction data. It can be operated and managed at the enterprise level, the data is shared with all parties in real time throughout the supply chain network. The increase in the number of data, the speed and timeliness of data will affect storage policies and storage infrastructure. Enterprises need to adopt a shared data structure to support all supply chains.
Application in the supply chain
The most extensive and common application of traditional bar codes is in retail and supply chains. RFID is expected to have the biggest impact on these aspects. Over the past 10 years, warehouses have been constantly integrated, and various companies have comprehensively transformed traditional logistics processes. The distribution and retail processes are eliminating redundancy. The improvement of information accuracy and availability has promoted the improvement of supply chain efficiency, while the RFID technology has been paid attention to because of the improvement in this aspect. It has taken a huge step on the basis of bar code technology, capture data accurately and reliably without manual intervention.
RFID will bring the following improvements to the supply chain: first, automation. Products often flow through several warehouses. Each time they go in and out of the warehouse, their locations are determined and directed to the appropriate locations in the warehouse to prepare for next transportation. If the arrival time of the product is delayed or the product is delivered to the wrong warehouse, you can immediately mark and re-Send the product to the correct location without manual intervention, it significantly improves the accuracy of product flow in the supply chain and shortens the time required for product flow.
Second, warehouse space optimization. RFID technology can improve the use of warehouse space because it does not need to be within the sight range. Enterprises can store products in the most efficient way according to the product size and shape. In addition, the Warehouse administrator can also use handheld devices to determine the product location, improving the positioning and packaging efficiency. The time and effort that retailers spend on inventory check have been significantly reduced.
Third, minimize inventory. Timely retail has led to a low inventory level in the retail field, which increases the pressure on enterprises in the manufacturing and distribution field, and they need to meet the specific needs of retailers in a shorter period of time. As a result, distribution companies are keeping an increasing number of buffer inventories to ensure they can meet retail needs. Supply chain visibility is improved based on accurate and up-to-date information, which helps reduce the size of these buffer inventories.
The fourth is to ensure the safety of the transportation process and reduce the loss of goods. Theft and loss of products may cause a shortage. In the retail environment, product losses are generally considered to account for up to 1% of inventory, which is a serious blow to profit margins. The accuracy of RFID data reduces losses and theft. It can be used as an anti-theft system in the retail environment.
5. Goods tracking. Real-time product tracking throughout the supply chain to provide opportunities for improving customer services. Real-time information supports timely manufacturing and retail, allowing organizations to make strategic decisions on the premise that they fully understand the supply of goods. Many logistics companies are using the Internet as the basis for services, such as gaining a large market share through the tracking of packages. Sharing information throughout the supply chain not only improves efficiency, but also increases customer loyalty.
RFID provides highly reliable tracking throughout the distribution system. In addition, automated real-time tracking reduces loss risks and error delivery, especially after the date and time information is added, it provides enterprises with a comprehensive audit index, which can avoid the release of products, prevent sales decrease and customer relationship loss.
New Application Opportunities
The supply network using RFID technology is a model of end-to-end efficiency, which has affected every point in the supply network. Increasing supply chain visibility means more efficient production planning, management of transportation/distribution of load and route planning capabilities, which extend to the management of factories.
Manufacturers are more familiar with assets and trucks loaded with goods, and can obtain information in a timely manner. This not only enables manufacturers to use, deploy, and manage capital costs more efficiently, it can also make faster and more accurate decisions on skill and labor management based on real-time data.
The road to RFID is not simple. This requires changing existing business processes, conducting a lot of employee training, and interacting with supply chain partners. However, for those organizations that are brave enough to accept challenges and have foresight, the benefits of applying RFID technology will be enormous.