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Boosting Logistics Efficiency with RFID Technology

  • Abhishek Shukla
  • Jul 26, 2023
  • RFID
RFID Technology

The logistics business is going through various changes across the globe. In view of fierce competition and multifaceted challenges such as varying demands, major disruptions in supply chain networks, changing routes as well as various compliance issues, businesses across the globe, including countries like USA, China and India are focusing on strengthening their supply chain and logistics infrastructure. Moreover, automation and digitalization of logistics operations is the need of the hour not only as a cost cutting measure but also as an upgrade of the same. 

In light of Industry 4.0, the role of RFID in logistics and supply chain is crucial as it is the ideal technology to source big data, enabling collection of large scale, complex data with regard to movement of fleet, inventory, real-time tracking and visibility. RFID also helps in creating decision support systems that can optimize the logistics operations.

India, in august 2022 launched the new logistics plan called National Logistics Policy (NLP) with the aim to bring down the overall logistics costs in country from current 14-18% of the GDP to 8% of GDP by the year 2030 in the line of global best practices in countries like USA, South Korea, Singapore and certain European countries. 

RFID and Logistics 

Logistics industry is a subset of supply chain businesses. It mostly has to do with the movement of goods and services and related information in an efficient forward and reverse flow, from the point of origin to the point of consumption.  The Retail industry is one of the major players after agriculture to avail the logistics services. Consumer packaged goods (CPG), electronics and furniture are also major contributors soaring the global logistics market value at 10.68T USD in 2022 which is projected to reach 18.32T USD by 2032 at a CAGR of 5.48%. This surge, however, is not unexplainable.

Use of RFID in logistics has opened the door to new opportunities, providing huge amount of data in a systemic manner, which can be analyzed for better insights and reports. It allows business owners to make data backed decisions and ensure efficiency and growth.

The Asia-pacific region is witnessing the highest growth in logistics especially India. Logistics is a business where use of technology and real time tracking of vehicles allows shippers to cut down the turnaround time by 50%-70%. With the latest infrastructure boost (50000 km of national highways added in past 9 years) and new national logistics policy that addresses the major logistics disruptions, Indian logistics market is the fastest growing one in Asia-Pacific region. At present, the Indian logistics market is valued at USD 160B and it employs as many as 20 million people. 

RFID tracking of freight trains allows for real-time data on freight movement and the turnaround time. It also ensures that shipment is not stuck at some junction due to mechanical errors. 

RFID tags can be read even under extreme conditions such as rain, heat and snow, so the real-time tracking of goods is always available. It ensures that shipment is not delayed and the supply chain network is well optimized.

RFID and Analytics 

Apart from identification and tracking, Radio Frequency Identification as an AIDC technology allows for better analytics. Businesses that run fleet operations can tag all the vehicles with passive UHF RFID tags or active RFID tags and install RFID readers at various intersections to get the real time data on vehicle movement along the roadways. The data is recorded in a centralized computer software system and using latest technologies such as AI (artificial Intelligence) and Predictive Analytics, fleet managers can get useful insights and reports for better decision making. 

Tracking the shipment in real-time ensures a fixed timeline for dispatch and delivery which is also very helpful in building customer loyalty. 

With varying customer behavior in a post pandemic world, customers want real-time update after placing their order via e-commerce platforms. Under these circumstances, logistics companies can now provide dispatch and delivery status based on analytics generated over a period and forecasting as predicted by Machine Learning (ML) tools. SMS and email alerts on shipment and its ETA (estimated time of arrival) improves customer experience with the brand and builds loyalty that translates into value creation and growth.

To conclude, RFID, as an AIDC tool allows for a higher degree of visibility and real-time tracking of vehicles and shipments en-routes. It enables a well-integrated data capture and processing, allowing for data-backed decision making and enhanced results. RFID has been playing a greater role in customer fulfillment leading to enhanced customer experience and loyalty. 

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 Jul 26, 2023

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