RFID Application

Using RFID for Warehouse Management

In order to improve productivity and control, warehouses are seriously considering the use of radio frequency identification (FRID) tags for day-to-day operations. This wireless technology increases efficiency of warehouse management because, unlike bar codes which must be scanned manually to feed in the information on the computers, RF tags broadcast a signal with information about the product they are attached to and about the location of the product in the warehouse. RFID technology provides an interesting option to complement data collection and product identification in the supply chain management and warehouse operation.

The main purpose of using RFID is to increase warehouse efficiency by reducing labor and logistic costs that are otherwise skyrocketing and provides ever-increasing pressure on profit margins in today’s competitive environment. It is cost-efficient because the warehouses can now streamline several operational areas inside their premises. For example, picture a typical warehouse where staff receives boxes of stock accompanied by paperwork detailing items in the delivery. Staff members then manually check each box’s contents against the manifest. The drawback of this method is that store staff can not see what items are in which box, or whether items were missing until each box had been individually checked. Many of these operation areas might benefit from radio frequency (RF) communications technology. This wireless technology in warehouses can help establish a simple paperless, on-line communication between operations and the staff's computer.

A wireless warehouse, that uses RFID Technology, works by linking warehouse workers to the back-end warehouse management application server where warehouse activities are being recorded via wireless handheld devices, scanning bar codes or RF tags attached to the pallets. These devices help employees to identify where to pick, put away, count, or move products within the plant. This translates to a better control over the movement and storage of materials within the warehouse by maximizing the efficiency of the receipt and shipment of goods, optimizing warehouse space utilization and knowing at all times exactly where goods are stored, allowing employees to improve and maintain high customer service levels.

IT managers are seriously exploring how RFID technology can be integrated into warehouse management systems (WMS) in order to increase efficiency in warehouse management.

The challenges for IT managers are:

Capabilities of RFID-based warehouse management

RFID-based warehouse management brings several benefits that can eliminate current drawbacks with the help of advanced scanning that improves supply-chain visibility and agility for greater operational efficiency.

Capabilities include:

Specific operational goals for RFID-based warehouse implementation

Expected effects on the IT budget

A significant issue for an IT manager is to implement an effective, reliable RFID solution with low total cost of ownership (TCO). This is particularly true since all the benefits of the system will accrue to business operations, while the IT budget will have to absorb an increase in infrastructure spend.

The TCO includes:

The RFID initiative for the warehouse

It is important that the management do a cost/benefit analysis before giving the green signal to RFID-based warehouse management implementation. The justification should present a benefit to cost analysis in alignment with project goals, total cost of implementation and the risks involved with the company’s business objectives and financial expectations. The value of the benefit expected to be achieved over the life of the project should exceed the total investment in the project. The project justification must focus on the operating cost saving estimates from the use of warehouse management system using wireless technologies.