You Can Realize a Return on Your RFID Investment

RFID or Radio Frequency Identification has been in commercial use since the late 1970’s. The early 1990's RFID was implemented on toll roads throughout the US so that tolls could be collected without cars having to stop.

In today’s supply chain execution activities, companies like Target and Wal-Mart have placed mandates on their vendors for RFID use to move inventory. But, for many of those suppliers, a return on investment for incorporating RFID has been elusive. Why?

For many early adopters of RFID, the technology has provided little more than a sophisticated way to scan packages. When using RFID simply as a replacement for a bar code scanning system adopters will see functionality that isn’t much of an improvement over bar code scanning. Thus, return on investment isn’t likely. So where can RFID be used that will make a positive impact on the bottom line?

The first place to find a rapid return on RFID investment is in the area of asset tracking. Warehouses, plants distribution centers and stockyards all use assets like totes, carts and pallets to move their inventory. When rigid passive tags are used in conjunction with an RFID reader system the cost of the RFID system can be quickly recovered by reducing the losses of these assets. Typical ROI on such an RFID implementation is under 18 months.

For smaller disposable passive tags used at the case level, return on investment is much harder to obtain. To realize an ROI the RFID equipment can be integrated into a multimodal system to use all of the peripherals of the mobile device collecting the RFID data. A return on investment of less than a year can be expected when using RFID in conjunction with voice and bar code systems.

When designing enhancements to your inventory control system or warehouse management system, consider implementing a multimodal system. Use the RFID equipment to detect check-digit locations, to track cases, pallets, totes, PC’s and carts. Use a voice component to guide the worker and to accept work acknowledgments and use the bar code scanner for long series of alphanumeric data such as serial numbers and UPC codes. Up front consulting and design may be required for a multimodal system, but such a system will save your facility time and resources long-term by providing a multi-functional solution and the right tool for each task.