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RFID Solutions

Distribution Center Operations

RFID technology can make distribution centers more cost effective. RFID-based systems provide real-time visibility into the supply chain. Operational improvements available through RFID technology can be summarized as follows:

Shipping and Receiving:

• Automated processing of loading/unloading
• Reduced labor
• Faster processing
• Automatic cross docking
• Automatic generation of electronic manifests

Storage and Fulfillment:

• Correct product locations
• Faster retrieval of products
• Fewer errors
• Reduced losses and shrinkage
• Improved fill rates and times
• Less safety stock

Task and Resource Management:

• Automated task updating
• Improved flow control automation and accuracy
• Improved operations monitoring
• Automated sorting and conveying
• Automated/accurate pick and pack

While the industry has grown over the last three years, much of the growth came from traditional, established applications such as security/access control, automobile immobilization, toll collection, and animal tracking. At present, many emerging applications remain in the early adopter phase (i.e., pallet tracking, POS/m-commerce, baggage handling, etc.). However, the increase in available RFID applications suggests that the technology is moving beyond traditional application niches. Manufacturers have proven that RFID technology works in many application environments and end users have developed a better (yet incomplete) understanding of the benefits of RFID technology.

While the potential for viable RFID applications appears virtually limitless, the lack of standards and high RFID system costs often become the decisive barriers to greater adoption. While the traditional application segments will continue to enjoy solid growth, VDC research reveals that opportunities are rapidly unfolding in the emerging application segments.

Fastest Growing RFID Applications Segments

• Baggage Handling
• Rental Item Tracking
• POS m-Commerce
• Real time Location System (RTLS)
• Supply Chain Management

Applications are constantly being developed to streamline data capture applications. Whether in the supply chain or in mobile computing, RFID applications typically fall into one of the categories below:

Closed Loop Systems
Closed loop systems are systems that are traditionally considered standalone. Closed loop systems are used in the following:

• Assembly operations
• Manufacturing processes
• Work in Progress
• Animal tracking
• Healthcare (Inventory and equipment control)

For example, an automotive manufacturer may use RFID technology in their manufacturing plants to track car frames as they move through the paint stations. The information is used for internal purposes only to track inventory and quality control.

Open Systems:
When information concerning the movement of products that incorporate RFID tags is shared with others, this is considered an open system. A prime example of this would be sharing movement information of products as they travel through the supply chain. Pallet tags being loaded on a truck from a manufacturer would be read and that information could be shared with the appropriate downstream warehouse or distribution center. Likewise, when the warehouse or distribution center unloads the trucks, the same pallet tags are read and that information can be shared with the upstream manufacturer.

Open systems are rarely used now because of the lack of database and protocol standards that define how this information will be shared. However, their potential is tremendous, as they would enable companies to track a single pallet, case or item throughout the supply chain, instead of relying upon input from each touch point. The EPC initiative within the supply chain is a good example of an open system.

Point of Sale:
These systems are used as fast payment systems such as toll road applications, gasoline payment, or parking garage applications. Mobil/Exxon Speedpass is a POS application example that allows customers to pay for their gas (and purchases at some grocery stores) by passing an RFID-enabled ID card over an RFID reader at the gas pump. The system automatically charges the customer's credit or debit card with the expense. Electronic toll collection systems and parking garage access are other examples of point-of-sale applications.

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