THE BOTTOM LINE
In the transportation and logistics industry, the costs of inefficiencies caused by lack of visibility are considerable. Shrinkage, inaccuracies and inefficient order fulfillment affect product costs and profitability. But the metrics from many of today’s RFID installations in place are also considerable. RFID can better automate the counting and tracking processes that are required for faster and more accurate supply chain logistics. Many transportation and logistics companies are using RFID today to achieve near 100% shipping, receiving, and order accuracy; 99.5% inventory accuracy; 30% faster order processing and 30% reduction in labor costs. With enhanced visibility across the supply chain, the bottom-line benefits of today’s RFID systems are proving to be beneficial for these industries.
ISSUES WITHIN THE SUPPLY CHAIN
The reality of the global supply chain is here. For the global economy, and for virtually every business that operates in it. And that is good news. More markets. More suppliers. More customers. More business. More ROI. Of course, it also means more competition, tighter margins, and an increased urgency to streamline operations while reducing costs. Global supply chain operations are expensive and vulnerable to inefficiencies, inaccuracies, uncertainties, shrinkage, human error, lost assets, and other costly issues. On a global scale, expenses associated with these problems can be enormous. It is clear that one of the most important keys to reducing cost in this environment is through enhancing traceability while increasing profits.
THE NEED FOR VISIBILITY
Optimized supply chain management is based on getting more done in less time and with fewer resources. Many of today’s transportation and logistics businesses struggle to streamline both their asset management and supply chain operations. Virtually every business or institution with an extensive supply chain finds that optimizing it is a process that is time-intensive, largely based on manual procedures, prone to human error, and increasingly costly. Businesses are working to increase asset, inventory, and shipment visibility in every link of the chain. While these businesses are aware of their logistical issue, they are finding that it is hard to track and manage what you cannot see. End-to-end visibility through the use of RFID facilitates more effective and timelier decisions, while reducing delays through prompt detection, reporting, and resolution of operational bottlenecking. This allows for the swift rerouting of goods in transit to meet changing business requirements while providing real-time tracking status and traceability.
RFID VISIBILITY BENEFITS
Essentially, RFID gives transportation and logistics operations increased visibility into equipment, inventory and business processes. It increases your efficiency by shortening processes and streamlining your data capture procedures, and increases accuracy by minimizing or eliminating error-prone, time-wasting manual processes. It reduces labor costs with automated processes that utilize always-on fixed RFID readers and it increases productivity with mobile and on-demand handheld readers. RFID provides real-time data that gives you up-to-date information across your entire supply chain. RFID solutions will help you lower your operating costs, increase throughput in your distribution centers, maximize on-time deliveries and improve customer service and satisfaction. In addition, for most transportation and logistics businesses, the visibility provided by RFID provides benefits well beyond the supply chain. Forward-looking companies are using RFID technology to increase efficiency in numerous other applications such as receiving and put away, delivery confirmation, returns processing, inventory and security.
A BRIEF OVERVIEW OF RFID IN TRANSPORTATION & LOGISTICS
For many organizations, the solution is the automation of visibility and management processes. Most transportation and logistics companies have been using barcoding successfully for years now. A growing number are also adding Radio Frequency Identification (RFID) solutions. RFID is essentially a more automated way of knowing what you have and where it is. There are substantial differences between barcoding and RFID. One of the most significant is the fact that barcodes need a clear line-of-sight to bar code scanners, making them difficult and slow to work with in many locations and situations. Another is the high number of man-hours it takes to count shipments, inventory and assets with barcodes. In addition, barcodes are able to identify only the type or class of goods, rather than individual items. RFID, on the other hand, identifies and locates every single item you want to track, from trucks to forklifts to returnable transit items (RTIs) to containers to whatever is being shipped in them. With RFID there are no line-of-sight requirements, so you can read a great many tags simultaneously. RFID lets you read, write and re-write to flexible, low-cost tags that offer greater data capacity, durability in harsh environments and the security of being difficult to replicate. And you can read them at distances of up to 30 feet. An RFID system includes tags, or transponders, that include a small antenna and a chip that can hold a significant amount of data such as product number, manufacturer, location and much more. It also includes three basic types of RFID readers.
• Fixed readers have an external antenna and are often located at entry points to facilities and yards.
• Handheld readers provide on-demand scanning and are used by personnel moving through the space.
• Mobile readers can be located on moving equipment, such as trucks and forklifts, for faster, more accurate inventory and process tracking.
Readers work by sending an RF signal at a selected frequency, which signals tags to send their stored information to the reader and system server. Depending on your project, you can choose from UHF “passive” tags that use the RFID reader for power, or “active” tags that cost more but have their own batteries and can be used for projects that require longer read ranges. UHF passive tags are increasingly being deployed because the lower tag costs allow increased visibility into broader categories of goods and assets. No matter which tags are right for your solution, the benefits of RFID can be significant. In general, the industry is seeing about a 10 percent improvement in counting efficiency with RFID.
TRACKING MANAGEMENT
One of the biggest business issues in our industry is lack of visibility of shipments and goods and the implications that this lack of visibility can have on in customer service. When you don’t know where a trailer, container, or pallet is at any given time, you don’t know where your products are, and neither do your customers. Efficiency suffers, asset utilization shrinks, labor costs increase, asset productivity and value lessen, and payments are delayed. RFID solutions are currently solving this internal asset management and tracking problem for a growing number of logistics companies and departments all over the world.
WAREHOUSE MANAGEMENT
In warehouses and distribution centers, RFID solutions are helping to deliver process improvements that positively impact customer satisfaction and your bottom line. RFID automation helps increase efficiency in receiving, sortation, routing, locating, and shipping. Use of RFID-enabled equipment, such as forklifts and handheld RFID readers automate information capture, allowing thousands of items to be scanned simultaneously and reduces costly, error-prone, pen and pencil recordings. RFID automation increases picking and put away efficiency, maximizes order accuracy, and minimizes delivery errors. In turn the business’s labor productivity is enhanced throughout the facility. Most importantly, with RFID streamlining end-to-end workflow, you assure that the right goods reach the right customer at the right time.
YARD MANAGEMENT
In many transportation and logistical operations, yard management is the last bastion of manual processes. The process is virtually the same—and just as inefficient— throughout the world. An employee moves throughout the yard on foot, or in a vehicle, counting how many pieces of equipment, containers, or other valuables, are in the yard and notes their location on paper with pen or pencil. It’s a time-intensive and error-prone process that causes a number of visibility-related problems, including redundant trailer moves, shipping delays, costly penalties, yard and gate congestion, product shrinkage, excessive use of refrigeration, wasted fuel, and lost time. To address these problems, numerous organizations across the supply chain are turning to RFID systems that automate asset tracking and location and thereby reduce or eliminate manual processes in these yard-based environments. RFID is able to significantly reduce human intervention by, enabling machine-to-machine information sharing to greatly enhance accuracy.
THE FUTURE OF RFID
Today, RFID is proven technology providing far-reaching benefits for transportation and logistics organizations. While many of these businesses are successfully using systems for asset management, warehouse, and yard management, the future of RFID goes far beyond internal closed loop solutions. Transportation and logistics companies are moving inexorably toward deploying open loop solutions in which every link in the supply chain is able to utilize the same RFID tags. The industry is already working to fast track the solutions that will get us there, including developing innovative new RFID tagging and reading technologies, such as active and semi-active tags, initiatives to enable environmentally friendly green solutions, and solutions to lower supply chain management costs. Equally important, RFID technology costs are steadily decreasing as adoption continues to grow, thereby allowing faster return on investment for projects while at the same time allowing profitable RFID deployments across a wider set of materials and goods. In the not-so-distant future, open loop RFID systems will play an ever-increasing role in lifting the curtain of invisibility from the global supply chain, delivering a broad range of system management benefits, reducing costs, and spurring the global economy to new heights of efficiency, control and ROI.
These and many other successful uses of RFID are opening a lot of eyes to the value of its applications in transportation and logistics. Around the world, a great many organizations are using RFID to increase visibility, not just internally, but from one end of the supply chain to the other. This trend will only increase as RFID technology continues to evolve, improving performance and lowering price points.
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