Radio-frequency identification (RFID) is a system for tracking and tagging objects, in a manner not dissimilar to barcodes. The information is stored in the tags through the use of electromagnetic fields and does not require line-of-site for the reader devices to scan them, unlike barcodes. This provides more freedom of placement of the RFID chips, even inside the object in question.
RFID is heavily used in shipping and storage and has become the new cornerstone of determining transportation costs. The RFID metric for transportation cost often includes such data on goods as the location of these products in the supply chain network, their price, depending on transportation costs’ fluctuations, and information on the legal regulation of the movement of goods.
There are three major RFID metrics for transportation. The first is “Location and Distance”, which is basic to calculating the distances the load is moved, the resultant logistics costs, such as toll charges, and other factors. The second metric is the “Multiple Modes”, and it accounts for the multiple modes of transport used in the shipping of goods. Different modes offer different transportation conditions and different costs. Finally, there is the third metric, “Purchase and Freight” Forwarding Costs. It accounts for the changes in the cost of purchasing goods from different vendors, as a result of RFID, and having to deal with businesses that support RFID, particularly when using cross-docking facilities (Hedgepeth, 2007).
Tracking transportation metrics with RFID has numerous benefits, and it can be seen with such products as furniture, for example. Furniture can be shipped using a variety of modes, including trucks, trains, air, and on the water as well, and benefit a lot from being easily tracked in terms of location and distance, for example. RFID tracking allows businesses to observe their performance over time and search for ways to optimize their logistics.
The benefits of using RFID tags in location and distance estimations, as well as the amount of data that can be stored on the chips, was demonstrated in the “CRESCENT” program, which was one of the first attempts to introduce RFID in the trucking industry.
Trucks were equipped with RFID tags which provided data about their safety standards, the weight of the load, taxes, and other relevant data. It allowed vehicles to bypass weight stations quickly, without losing time and gasoline on slowing down and then accelerating, as well as allowed more focus for the inspections, which could now easily locate trucks that did not meet requirements. While the savings didn’t seem very impressive on the individual scale, the accumulated profit was significant enough that the program was implemented in over 30 states (Floyd, 2014, para.2-3).
When moving foods, or any other set of goods, RFID noticeably decreases the uncertainties, inaccuracies, shrinkage, and the cost of inefficiencies caused by lack of visibility. On a global supply chain, where goods are traversed from one country to another over many notes of the supply network, this can result in significant profits, and massively reduce the uncertainty in optimizing the movement of those goods along various channels.
RFID creates provisions for faster and more accurate supply chain logistics. They can store much more information than barcodes, which were used before, but also, even more importantly, they can store individual information, which helps track even minor discrepancies. RFID readers can scan information from all items at once, simplifying the process even further, and decreasing reliance on manual, thus decreasing the chances of human error.
What is even more important, new functions of RFID are regularly introduced, allowing for things like constant condition and quality control on certain goods (like foods). That means that if at any point during the movement of goods, unfavorable temperature changes begin to occur, the staff responsible will be notified.
As we can see, there are many benefits to using RFID tagging. It is only natural if the industries will continue integrating it as a technology, and is only natural that this innovation is becoming widespread in other industries beyond logistics.
References
Floyd, R. (2014). RFID in Transportation.
Hedgepeth, W. O. (2007). RFID metrics: Decision making tools for today’s supply chains. Boca Raton, FL: CRC Press.