RFID is a tracking system that can significantly improve transparency in the supply chain. It is becoming a critical factor for many companies at every stage of the supply chain, as RFID systems can vastly improve the traceability of products and automate operational processes. This in turn leads to more data, a reduction in labour costs and greater transparency within the supply chain.
What is RFID?
RFID stands for "radio frequency identification" and is used in many industries. The technology has been around since the Second World War. The basic idea behind its development in the 1940s was the possibility of using radio frequencies and radar to identify aircraft as "friends or foes". From then on, the doors were wide open for this technology and its applications. Today, RFID technology is often used in the form of labels, so-called "smart labels", and readers that store information about a product. The labels can be attached to a variety of goods and products and their status can be tracked and queried via a larger system, e.g. supply chain management software. It is a wireless tracking system consisting of three parts: a radio transponder, a radio receiver and a transmitter. Due to the use of radio frequencies, RFID transmissions can be used over low frequency, high frequency and ultra-high frequency channels. Each frequency level has its own range, cost per tag and preferred applications. While low and high frequency RFID tags are used in animal tracking and for items such as DVDs in self-service kiosks and personal ID cards for security authorisation and access, ultra-high frequency channels are mainly used for supply chain management, automotive manufacturing, mining and even construction.
Features of active and passive RFID tags
There are two types of ultra-high frequency channels: active RFID and passive RFID. Active RFID tags are equipped with a battery-powered antenna that is constantly switched on (active) and transmits information about the radio waves to be tracked. This means that an active RFID system can provide information in real time and without prompting or interruption. Active RFID tags are sometimes referred to as "beacons" because they send out information to notify the tracking system. Automated toll collection systems are just one example of the common use of active RFID tags. Passive RFID tags have no independent power source. Instead of constantly sending a signal, a passive RFID tag has to wait for a reader. As soon as the reader sends a signal to the tag, data from this product can be transmitted and recorded. Passive RFID tags are often cheaper than active RFID tags, and although they do not constantly provide real-time information, they are more than sufficient for most supply chain analysis and tracking requirements.
How do RFID systems work in supply chain management?
The Oxford Dictionary defines a supply chain as "the sequence of processes involved in the production and distribution of a commodity". RFID technology is used in many industries that rely on this supply chain network and is an important part of their daily operations. RFID enables the tracking of items across a variety of goods and products:
- Retail items
- Medical supplies
- Pharmaceutical products
- Vehicles
- Pets and livestock
- Food and drink
RFID systems are so flexible that they can be used in all phases of the supply chain - from storage, loading and transport to final delivery. Amazon is just one of the major companies using RFID technology to track their goods and products not only in the warehouse, but also during the packing, shipping and delivery phases. With the tags described above, the RFID system is activated by radio wave signals. Once a tag (transponder) has been activated, the reader (transmitting antennas) communicates back via the receiver and the presence of the tagged item is translated into readable data. These smart tags communicate over this network to track each product. Think of RFID technology as a kind of barcode system.
Benefits of RFID systems in supply chains and transport
In the supply chain, RFID devices help with shipment tracking. Logistics service providers and individual companies, such as shipping service providers, can use RFID to track every stage of the product's dispatch and thus know where the product is within the supply chain at all times. This means that all transport processes such as lorry loading, transport and final delivery to the retailer or end customer can be tracked. By integrating RFID into the entire supply chain process, a decisive degree of transparency is achieved not only at the beginning and end, but throughout the entire process.
With the use of RFID systems, parcels can be monitored during transport or storage and damage can be reduced by 40-60%. This means fewer repairs, delays and damage reports. When using RFID systems, it is almost impossible for damaged items to pass through the supply chain unnoticed. RFID indicators, such as the ShockWatch RFID and the TiltWatch RFID, can be activated on site, are tamper-proof and light up red if an impact with a certain G-force or an unauthorised inclination has occurred. As these products emit both an RFID and a visual alarm, they can be integrated into any supply chain and help to minimise damage.
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