November 2011 | Commentary | IT Matters

RFID and Supply Chain Visibility: You Can’t Manage What You Can’t See 

Tags: Logistics I.T.

Ralph Lieberthal is principal, transportation and logistics, Motorola Solutions, 847-576-5000

Smart companies are striving to reduce costs, improve service, and increase return on investment throughout the supply chain. Automation-based solutions can play a crucial role in meeting those goals, and many organizations consider radio-frequency identification (RFID) technology a major force in transforming global supply chain automation and visibility.

It's hard to manage what you can't see. End-to-end visibility helps streamline the supply chain by promptly detecting, reporting, and resolving operational anomalies. It also allows shippers to track assets and shipment status in real time, with maximum traceability.

RFID increases equipment, inventory, and business process visibility. It also increases efficiency by optimizing business processes and automating asset and inventory management.

The technology also streamlines data-capture procedures and increases accuracy by eliminating error-prone manual processes, and helps reduce labor costs. It provides real-time, up-to-date information across the entire supply chain.

RFID solutions can help lower operating costs, increase distribution center throughput, maximize on-time deliveries, and improve customer service and satisfaction.

RFID At Work

Automated systems have helped many companies optimize asset and inventory management in internal or closed-loop solutions in which RFID tracks assets, such as vehicles, equipment, and returnable transport items, which stay within the company. Here are two examples:

  • An international rail company operates intermodal terminals where shipping containers are moved between rail lines and truck chassis. Because private truckers use the equipment on a per-diem basis, the company needs 100-percent accuracy to ensure 100-percent revenue capture. A closed-loop RFID tracking system cut cycle times almost in half.
  • In a large production facility, eight different departments were requesting daily trailer moves. Trailer location, re-handling, and multiple moves wasted significant resources. The company installed a complete RFID system with fixed readers at gates and handheld readers for faster, more accurate automated yard management, cutting total costs by six percent.

RFID is evolving in many intriguing directions. Companies are increasingly interested in using active RFID tags as sensors to ensure food safety by monitoring temperatures in different areas on refrigerated trailers. When an area gets too warm, the tag automatically notifies the driver and master control so they can remedy the situation. RFID sensors also help ensure traceability in the event of a recall.

Moving Forward

Other advanced transportation uses include placing RFID tags inside gas tanks to automatically record the amount of fuel dispensed and charge the transaction to the system, eliminating the need for drivers to carry credit cards or cash. In addition, RFID tags and readers can help lower costs and reduce CO2 emissions by helping to optimize routing and reduce the number of costly re-deliveries.

RFID technologies can play an important role in helping shippers and logistics service providers gain visibility into the global supply chain.