One can argue that the ROI from RFID comes in a retail environment than during warehouse operations. However, these benefits that the retail environment experiences can have a significant impact on the warehouse facilities as well.
Fremont, CA: The majority of the hype for Radio Frequency Identification (RFID) technology has been centered around its applications in the retail environment, managing store inventory efficiently, and driving consumer decisions. However, the technology can also help accelerate accurate warehouse operations. With the costs related to RFID tags decreasing significantly, manufacturers and distributors will be under extreme pressure from retail customers and their competitors to adopt the technology. Like most other technologies, RFID can generate disproportionate ROI for early adopters compared to those who wait.
RFID is quite simple in itself as a technology. It mainly consists of a tag and a reader. The tag is composed of a processor and an antenna. Tags can be active and use a battery or passive and use power from the reader. The reader can be handheld or stationary and can vary in size and strength based on purpose. Tags can be hang tags or embedded on an item. Each item is given a unique fingerprint to be tracked individually. Some of the primary benefits of the technology in warehouse operations are reading many items simultaneously, doing so without a line of sight, and tracking the direction the product is moving.
In some cases, RFID can suffer from readability issues due to product density, material, or packaging alignment, Not all products are suitable for RFID, but those that are can experience significant speed advantages in warehouse processing. One can argue that the ROI from RFID comes in a retail environment than during warehouse operations. However, these benefits that the retail environment experiences can have a significant impact on the warehouse facilities as well. The impact can be felt all across the supply chain and significantly improve allocation efforts, buy-online-pickup-in-store ability, ship-from-store operations, inventory levels, vendor compliance, and labor spend.
In warehouses, RFID delivers on the promise of speed and understanding. Warehouses typically have a high level of inventory accuracy, and RFID cannot offer much on this front. However, the technology can improve the speed of process activities and understanding of each process step and each shipment. The technology can have a significant impact on the speed of inbound receiving RFID enabled products, speed of conducting cycle counts, and speed of outbound processing. Another promise of RFID is understanding how an organization can better understand error rates, conduct root-cause analysis, and challenge chargeback rates using RFID scan data.