Imagine a supply chain where manufacturers, distributors and retailers can automatically locate any items that were shipped on a certain time or given case, and where receiving facilities know immediately whether the shipment`s content matches the advanced notice.
What`s even more, a world where theft tampering is immediately evident, without having to inspect the products.
Radio frequency identification, or RFID, is poised to quickly accelerate the supply chain from the above alternate universe to soon-to-real daily operations.
Indeed, some predict that RFID will replace all printed barcodes with unique tags that store individual item information and transmit it to RFID readers. Surpassing the potential of barcodes, which can only store 12-15 characters of information, RFID readers can store large amounts of up to 64-bits.
This means that an RFID tag can be used to not only identify a class of products, but individual pallets, cases and items.
But does RFID do its "next big thing" label justice, or is it just another important piece of a complex enterprise jigsaw enabling businesses to realise objectives they`ve pursued for many years?
Whichever way you look at it, for many industries the promises of RFID cannot be ignored:
* Real-time stock management;
* Increased supply chain visibility;
* Demand and supply synchronisation;
* Faster expedition of financial settlements; and
* Vendor-managed inventory.
Looking at a real-life example, after a three-month pilot programme, The Gap Inc reported that RFID tagging improved in-store accuracy from 85% to 99%, noteworthy to say the least.
However, implementing RFID requires company buy-in, commitment and an overall proactive approach. RFID deployment should not be a short-term goal but a strategic vision that benefits not only purchasers but the organisation as a whole.
Incorporating RFID technology into supply chain management activities can improve asset management and order reconciliation, but realising these improvements requires that RFID data from warehouses and manufacturing facilities be incorporated into the corporate infrastructure.
This requires a solution that can transform, enrich and route the massive amounts of data for it to be addressed by enterprise applications performing tasks such as order and warehouse management. Indeed, the chosen solution should offer reliability and scalability, application connectivity, partner connectivity and importantly, manageability.
After making incremental supply chain improvements by incorporating RFID data into existing applications, companies will need the help of business process and activity management to ensure that people, processes and technologies are aligned.
The key is not to take, what is referred to as a "slap-and-ship" approach but to build RFID process-driven applications that can be fully leveraged across future initiatives and shared among common projects.
This foundation paves the way for optimum ROI as well as a single development environment for building real-time supply chain management (SCM) applications which leverage a company`s existing infrastructure.
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