RFID Technology In Supply Chain Management: An Essay.

Methods

Discuss about the Application of RFID technology in Supply Chain Management.

Supply chain management refers to the methods involved in the management of goods and services, its flow from the manufacturing unit to the target customers, which includes the making of the goods, its distribution as well as transportation. Supply chain management combines all the above steps with the marketing decisions, demands of the customers in association with the organization’s strategies and goals. The implementation or application of RFID technology can however, benefit the supply management chain (Stadtler 2015).

The report highlights the application of RFID technology in the supply chain management. RFID technology is referred to the Radio Frequency Identification, which uses the electromagnetic fields to track and identify tags attached to the items. It helps in minimizing shrinkage of any product or item and reducing costs. The implementation of RFID has become a very important factor in the supply chain management. It has not only replaced barcodes but also ensured the availability of right items at the right place, without any discrepancies and errors (Zhu, Mukhopadhyay and Kurata 2012).

The report highlights the use of RFID technology for the benefit of supply chain management, how the technology works, the strengths and challenges of the technology. RFID helps in making the supply chain precise and efficient; it improves the reliability of the entire system. It also improves significantly the administration’s planning processes.

This chapter discusses about the research methods which are available for the study and their analysis to address the problems, which is directed towards the ability of RFID in the management of supply chain. Likewise, it presents various strategies and procedures in identifying the issues related to the topic.

This chapter throws light on the methods of research used to establish the report, the research design, data collection, description of the study, the processes used to analyze the references and analysis of the gathered data.

Multiple methods are employed for this study, to examine the current status of the application of RFID technology in the supply chain management which includes descriptive research method, ensuring the study is cheap and quick. Moreover, qualitative analysis helped in understanding the reasons, motivations and opinions, while providing an insight to the problem with rich data. It also helped in developing ideas and opinions for potential quantitative analysis of the study (Taylor, Bogdan and DeVault 2015).

The research methodology required gathering relevant data from specified documents and compiling databases. Secondary data is collected through internet, review of existing literature, journals and research thesis. The academic articles are referred and studied, for the detailed analysis of the topic and the interpretation of the data which are being collected from the articles. The report contains Harvard style of referencing.

Results

The results are presented here through the findings of the study and its detailed analysis.

The report contains the findings from detailed research of the academic articles and journals. The usage of RFID benefits the supply chain management. Fast moving consumer goods or FMCG industry, is taken as an example to explain the RFID process. However, the RFID technology application can vary from industry to industry.

The FMCG market is presently one of the fastest moving markets across the world. In this industry, it is necessary to count the products several times which includes the stages of manufacturing, production, washing of the products and its packing. Previously, all these operations were being performed manually. After the introduction of RFID technology, the tagging and counting of products are done in seconds (Beck and Kenning 2015). RFID scanner helps in scanning the tags automatically without any error. Moreover, it helps in scanning multiple tags simultaneously. It reduces the work load of the labors and does the work more accurately and swiftly. It helps in reducing the costs of the manufacturers as the maximum work is machine-based (Zhu, Mukhopadhyay and Kurata 2012).

Likewise, manufacturers can also gain knowledge and information through this technology. RFID tags help in storing information of the products which are far more advantageous than barcode labels. The information which is stored helps in enhancing the production processes. Efficient planning of production helps in the smooth movement of products and its raw materials in a less span of time (Chen, Cheng and Huang 2013). In addition to this, manufacturers are benefitted with increased knowledge regarding the maintenance of the machines and equipments and how to repair those. This also gives the manufacturers a visible data of which machine needs to get repaired and when it needs proper maintenance, therefore, helping them to plan for the maintenance schedules. Being a major part of the production planning, it helps in preventing costly production procedures (Stadtler 2015).

Critical analysis of the study helped in getting detailed information regarding the topic. RFID helps in manufacturing processes by reducing the manual work, which in turn reduces the costs. It improves visibility and planning (Attaran 2012). It also benefits in managing the warehouse. Once the production is complete, the producers of fast moving consumer goods or FMCG pack the items in the cartons and then deliver those cartons to the buying company’s warehouse. The cargo which is used to transfer the products to its destination goes to the warehouse first. It is very difficult to keep a track of the huge number of boxes. It takes huge amount of time and also it is a labor consuming procedure (Costa et al. 2013).

Findings

RFID technology can be applied in such situation to ease the procedure as it helps in managing the information and keeping a track of the number of cartons. Each and every unit is installed with RFID tags which help in the storage of information in the computer of the warehouse. In the entrance of every warehouse, read and write devices are installed, which helps in registering the data when a cargo moves in or out (Attaran 2012). It enables the management center in managing the huge amounts of items that goes inside and outside the storage system. Further, it helps in recognizing the cargo and in its replacement when it stops working. The read and write device plays a major role in the strategic planning of the product locations inside the warehouse (Fosso Wamba 2012).

RFID helps in tracking of the products and its handling, which is done in a short span of time and with accuracy. Inside the warehouse, all the products can be easily located as its movements are being tracked by RFID, which automatically gets stored in the warehouse’s system. On one hand, stocks are accurately tracked, and on the other, information regarding the losses is recorded by the technology. Therefore, the RFID technology offers detailed information regarding the visibility of the products, location and relocation of the products, recording of losses and planning the locations of the products strategically (Fan et al. 2015).

RFID technology helps in managing and tracking all the shipping containers. The most convenient way of transporting huge numbers of cargo is by using shipping containers. It ensures secured and safe transportation at a very low cost, a standard quality of packaging and high density of transportation. Those companies using the RFID technology for managing and tracking the shipping containers are able to manage each and every link of the containers (Monczka et al. 2015). Active tags of RFID help in doing so even in the yards and the docks. Moreover, RFID technology which is of high frequency helps in the speeding up of identification as well as identification of long distance objects. It improves efficiency and increases accuracy as well as offers the cargo movement visibility (Garrido Azevedo and Carvalho 2012).

It also benefits the distribution processes by implementation of the technology. It accelerates the delivery management’s speed to a great extent, while improving efficiency and increasing accuracy in selecting and distributing processes. It reduces distribution costs and keeps a track of the items and products, by registering it in the distribution center’s computer system. This information helps in putting the cartons properly in right places, sorting them quickly and also efficiently, dispatching of the cartons to its retailers in less span of time with accuracy (Monczka et al. 2015). It also enables in inventory control’s accuracy. When the items reach their destination or store, at the entrance they get scanned as well as registered automatically. Therefore, it helps in accelerating the delivery speed, while improving efficiency, increasing accuracy and at the same time reducing distribution costs (Fan Et Al. 2015).

Analysis

RFID is beneficial for many companies and organizations. It is the perfect solution for those. However, it has some challengers. For some organizations, RFID fails to meet their basic needs and requirements. The challenges of the technology are discussed here in this chapter.

Firstly, it can be expensive. Be it software or hardware, RFID requires the costliest equipment, that requires proper maintenance. Lack of maintenance can hamper the business strategies. Secondly, RFID has a troublesome relationship with liquids and metals. It faces difficulties in working among metals and liquids, as both the elements make the reading harder. Metals don’t let the radio waves read, as the waves get bounced all over. Liquids can absorb the signals of RFID when sent to the tag (Attaran 2012). Thirdly, at times the technology can be tough to grasp. Understanding different frequencies and tags can be a problem. Moreover, the way of using RFID equipment can be a major challenge for the user. Managers must be well equipped with the technology so that they are able to train the employees as well, with the pros and cons of the technology. Fourthly, while dealing with this technology, employees come across with the reader and the tag collisions. In reader collision, an employee may face interference from a different reader, while reading an item. Tag collision creates interference while reading a number of tags on a single go. It usually happens when more tags reflects to a single signal, which in turn confuses the tag reader (Garrido Azevedo and Carvalho 2012).

It is required to do a detailed research of RFID technology before its application in the supply chain management. Managers must be well equipped with the handling of the technology so that they can train their employees with the utilization of the technology. It is important to understand whether its application is beneficial for the organization or not (Fosso Wamba 2012).

Strengths

RFID technology benefits many companies by reducing the cost and time, minimizing the product shrinkage probability, better control of the products and increasing safety and security. It also helps in tracking the products and maintaining them when needed. It ensures smooth flow of the products. It benefits in the warehouse management by locating and relocating the products, record the products and helps in planning the products’ location strategically. It takes care of the distribution process by improving efficiency and increasing Accuracy (Tsai, Lai And Hsu 2013).

Weakness

With strengths of RFID, come its weaknesses. Firstly, it can be expensive. It requires proper maintenance as lack of maintenance can hamper the business strategies. Secondly, RFID has a troublesome relationship with liquids and metals. It faces difficulties in reading metals and liquids. Thirdly, at times the technology can be tough to grasp. Fourthly, while dealing with this technology, employees come across with the reader and the tag collisions (Sarma and Subirama 2013).

Opportunities

Once a company adopts this technology, other companies will also adopt in order to keep pace with the technological advances. This will gradually spread among all the companies, leading a revolution of technology and better economy. Theft detection will be more efficient. Problems in distribution of the products will be grasped easily. Organizations will become more efficient and will be able to cater the target customers in a better way (Ziegeldorf, Morchon and Wehrle 2014).

Threats

Small scale business won’t be able to afford the technology, same goes for suppliers from the poor countries. Hence, it would result in the loss of RFID technology’s support. Some customers believe that their personal information would be leaked and privacy would be violated. Most of the work will be machine based, hence many labor would lose their jobs. Many employees would also lose their jobs because of better technology (Beitelspacher et al. 2012).

Supply chain management ensures a smooth flow of products and services as well as the storage and movement of the raw materials. Presently, several companies are using RFID technology for the smooth management of supply chain, in the hope of reducing costs and product shrinkage. Some companies use RFID for few aspects, whereas some use the technology from the beginning o end (Tsai, Lai and Hsu 2013). Few companies, which have successfully been implementing the RFID technology in their supply chain management, are listed here.

Wells Fargo has been using the RFID technology in a brilliant way for managing their supply chain movement. It uses the RFID tags to label all their equipments which help in tracking the movement easily, keeping it safe and secured. With the help of this technology, the security guards are able to tell easily whether the products’ movement is right or wrong, whether it is in the hands of right owners or not (Townsend et al. 2013). Previously, this work was done manually by the guards. They used to check each and every product’s serial number by matching it with a list, which had the product’s details. Therefore, RFID technology benefitted the company, by reducing the labor cost and time. It also ensured the safety and security of the products (Sarma and Subirama 2013).

Willard Batteries uses RFID technology to track their products and its movement. It also ensures that the products are in good condition, proving maintenance when needed. The high frequency of the tags also allowed delivery of necessary information, in emergency. It proved to be beneficial and advantageous for the company, by tracking and maintaining products and services, also reducing the cost and time (Townsend et al. 2013).

RFID technology has proved to be beneficial for the companies. However, there are few difficulties with the technology which are discussed above. The technology must be developed further for more convenient services. Risk factors must be lessened, with more security regarding customers’ personal information. Issues with liquids and metals should be reduced and there must be no difficulties reading those items. Employees needs to be trained more in order to adapt the technological changes (Zhu, Mukhopadhyay and Kurata 2012).

• Analysis was purely based on the items available on the internet, journals and theses.
• There was limited time for data collection for the study.
• Interviews and survey could have established the report more.
• The study was confined to the application of RFID technology in Supply Chain Management only and not to its other usage

Conclusion

To conclude, RFID application helps in the smooth flow of products and goods. It also plays a very important role in distribution and tracking processes. Many companies are implementing the RFID technology, which has proved beneficial for them. It is advantageous for the supply chain management. Moreover, it helps in building a relationship between the customer and the organization by fulfilling their demands. It accomplishes great visibility as well as efficiency. However, it is important to do a detailed research before applying RFID technology. Managers should be able to understand whether the application will be beneficial for the company or not. Employees must be trained by the managers, in accordance with that. However, keeping in mind the benefits of RFID, the technology is worth an investment

References

Attaran, M., 2012. Critical success factors and challenges of implementing RFID in supply chain management. Journal of supply chain and operations management, 10(1), pp.144-167.

Beck, S. and Kenning, P., 2015. The influence of retailers’ family firm image on new product acceptance: an empirical investigation in the German FMCG market. International Journal of Retail & Distribution Management, 43(12), pp.1126-1143.

Beitelspacher, L.S., Hansen, J.D., Johnston, A.C. and Deitz, G.D., 2012. Exploring consumer privacy concerns and rfid technology: the impact of fear appeals on consumer behaviors. Journal of Marketing Theory and Practice, 20(2), pp.147-160.

Chen, J.C., Cheng, C.H. and Huang, P.B., 2013. Supply chain management with lean production and RFID application: A case study. Expert Systems with Applications, 40(9), pp.3389-3397.

Costa, C., Antonucci, F., Pallottino, F., Aguzzi, J., Sarriá, D. and Menesatti, P., 2013. A review on agri-food supply chain traceability by means of RFID technology. Food and Bioprocess Technology, 6(2), pp.353-366.

Fan, T., Tao, F., Deng, S. and Li, S., 2015. Impact of RFID technology on supply chain decisions with inventory inaccuracies. International Journal of Production Economics, 159, pp.117-125.

Fosso Wamba, S., 2012. Achieving supply chain integration using RFID technology: the case of emerging intelligent B-to-B e-commerce processes in a living laboratory. Business Process Management Journal, 18(1), pp.58-81.

Garrido Azevedo, S. and Carvalho, H., 2012. Contribution of RFID technology to better management of fashion supply chains. International Journal of Retail & Distribution Management, 40(2), pp.128-156.

Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.

Sarma, S. and Subirama, B., 2013. Method and system for performing mobile RFID asset detection and tracking. U.S. Patent 8,477,013.

Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.

Townsend, C.P., Galbreath, J.H. and Arms, S.W., Lord Corporation, 2013. Component RFID tag with non-volatile display of component use including the use of energy harvesting. U.S. Patent 8,593,291.

Tsai, M.C., Lai, K.H. and Hsu, W.C., 2013. A study of the institutional forces influencing the adoption intention of RFID by suppliers. Information & Management, 50(1), pp.59-65.

Zhu, X., Mukhopadhyay, S.K. and Kurata, H., 2012. A review of RFID technology and its managerial applications in different industries. Journal of Engineering and Technology Management, 29(1), pp.152-167.

Ziegeldorf, J.H., Morchon, O.G. and Wehrle, K., 2014. Privacy in the Internet of Things: threats and challenges. Security and Communication Networks, 7(12), pp.2728-2742.