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Pros and Cons of RFID in Warehouse And Supply Chain Management

  • Mahesh Tiwari
  • Mar 14, 2024
  • RFID
Pros and Cons of RFID in Warehouse And Supply Chain Management

For any logistics business to succeed, having a robust supply chain network is of primary importance. Logistics businesses can leverage technology to create a robust supply chain by strengthening various aspects of asset management, warehouse management and transportation.

Use of IoT to manage day to day business operations is becoming a norm now and RFID is seen as an efficient, Cost effective tool in this regard.

What is IoT?

Internet of things (IoT) is considered as a network of smart physical things that can communicate to other such things via transferring and receiving data over the internet. It could be fitness tracker, car key or a smart bulb.

What is RFID?

Radio frequency identification or RFID is an AIDC technology that is capable of automatically capturing data and identification via radio frequency signals.

It uses an RFID tag, RFID reader and antenna to achieve this task.

RFID for warehouse and supply chain management:

Warehouse/Inventory management is an essential part of supply chain and logistics businesses. It includes keeping track of assets inside the warehouse, their inventory, their movement, visibility and stock clearance and replenishment.

Use of RFID in warehouse management can help with many such tasks. Let’s see what are the pros and cons of RFID in Warehouse and supply chain management:

Pros of using RFID in Warehouse and supply chain management:

There are various pros of using RFID technology for warehouse management.

1. Increased Asset visibility

RFID tagging can increase asset visibility in a warehouse/inventory significantly. Employees can keep track of various assets and access whenever the need arises via simply tracking the assets through the RFID tags.

2. Enhanced inventory control

RFID can enhance the inventory control as well.  By keeping track of asset movement and keeping records of assets entering or leaving the facility, employees can keep accurate data on assets.

3. Inventory Replenishment

By using RFID, inventory manager can order for quick asset replenishment in an inventory, without any delay.

4. Inventory forecasting using RFID

Use of RFID system in a warehouse can also felicitates inventory forecasting. The huge amount of data collected through RFID system can be analyzed using predictive analytics and insights can be generated.

The insights not only help with inventory forecasting but also help with quick actionable decisions.

5. Reduced losses

Losses due to stock unavailability or overstocking can be prevented by felicitating easy and timely movement of assets throughout the warehouse. RFID can help with that. It can also remove human-errors and resulting losses.

6. Enhanced productivity

Use of RFID in supply chain management will also increase productivity. It will save crucial time of staffs in stock count and tracking and they can utilize that time for more intelligent works.

RFID can also ensure the timely delivery of delivery consignments by supporting the supply chain networks.

Cons of using RFID in warehouse and Supply Chain Management:

Although technology has the capacity to enhance productivity and reduce errors, automation in business also has its drawbacks. Various supply chain operations and warehouse management can benefit from the use of RFID and other Internet of things (IoT) but it can also create a significant employment crisis.

RFID has the capacity to scan hundreds of RFID tags at once and it can keep records of the same, without any error.

Warehouse managers can use this opportunity to lay off actual people on these jobs and installed RFID system instead.

Apart from that RFID is a short range IoT and it fails miserably when it comes to large operations like smart city projects as such.

RFID also fails to enhance overall visibility in very large warehouses.

Disclaimer: The information presented here is for general information purposes only and true to best of our understanding. Users are requested to use any information as per their own understanding and knowledge. Before using any of the information, please refer to our Privacy Policy and Terms and Conditions.

  • Created on Mar 31, 2023

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