RFID tagging certainly hasn’t created the huge ripple through the supply chain that was expected by many. But, says Alex Leonards, behind the scenes, a wide range of industries are reaping its benefits.
Barcoding has been the star of the show for more than 30 years. More recently, RFID tagging has joined the stage – but it never seems to have lived up to predictions that the technology would take the market by storm.
Nevertheless, according to Viv Bradshaw, technology consultant at the DENSO Auto-ID business unit, business and return on investment cases for RFID are being recognised, and early adopters are now seeing the benefits and learning some great lessons. At the same time, product pricing for RFID technology has reduced a fair amount.
It may not have made a spectacular entrance into the market, but behind the scenes it is silently winning customers, and making its mark in a wide range of industries. “In the automotive industries RFID is often used to track stillage (for example car parts),” says Red Ledge technical director Alan Wilcockson. “The speed of goods in and goods out is increased enormously when RFID-tagged stillage is driven through an RFID portal rather than scanning each barcoded box.”
In lots of manufacturing environments, demanding processes might mean needing to reapply barcodes for each stage of the manufacturing process to ensure batch traceability. “But an RFID tag can be embedded in the finished product (an aircraft seat, for example) and identified once it is installed,” says Wilcockson.
Red Ledge has provided RFID-tagging for a leading car parts business. By RFID-tagging every distribution asset, logging them in and out through a dedicated RFID portal and at points throughout the picking process the company is now able to trace the content and location of its 110,000 totes (order-picking and dispatch containers), 9,000 trolleys and 6,000 cages. This has reduced returnable packaging replacement and environmental costs.
RFID, and barcoding, is used in the healthcare and hospital supply chain, as well as the for the identification of products used on a patient. Ingenica Solutions has recently been awarded a contract for the inventory management element of the Department of Health’s Scan4Safety project. Royal Cornwall Hospitals NHS Trust will use Ingenica’s data capture solutions to increase the efficiency of existing materials management processes, saving clinical time and improving patient safety in line with the Scan4Safety objectives.
“The project is unique in its planned integration with RFID technology, and really aims to show how best of breed data capture and technology can work in Healthcare to best advantage,” says Nicola Hall, Ingenica Solutions (who recently picked up an Award at the Supply Chain Excellence Awards alongside Lancashire Teaching Hospitals NHS Trust). “The Trust tracks high value surgical implants received, stored and used during surgery.
“As well as reducing the clinical time spent tracking these high value implants, and wastage as a result of expired stock, it improves patient safety by ensuring the right products are used on the right patients, and that those products can be traced in the event of a recall.”
RFID is also suited to lots of other kinds of industries and products. It can capture data for very small items, as well as for perishable goods. This is where the technology can really shine, as in these scenarios RFID tags are able to contain more data than is possible on barcodes. “For example, with tags embedded on trays containing chilled or frozen foods the addition of latest put away/store by data is a prerequisite,” says Jonathan Bellwood, founder and CEO of Peoplevox. “From a productivity and accuracy perspective, RFID allows the collection of more data in one swipe compared to barcodes and is not reliant on line of sight.”
The catch is that often the price of RFID systems compared to that of barcoding result in barcodes being used a lot more in the supply chain.
E-commerce is another area that can also benefit from the technology. “One of Indigo’s customers manufactures accessories which it sells via e-commerce and through retailers,” says Eric Carter, solutions architect at Indigo Software. “They use RFID tagged picking trays as part of a batch picking process to ensure that multiple item e-commerce orders are processed efficiently as possible.
“A plastic tray with an RFID tag is loaded onto a roller conveyor and items for the order are picked and placed into the tray, which continues to move around the conveyor.”
The system tracks whether the tags on every tray correspond with the picked items. Once all items within one order are on the conveyor belt, goods are released to a packing area for dispatch to the customer.
What’s the catch?
Barcoding is common across industries, but it still has its flaws. As does RFID.
DENSO’s Viv Bradshaw thinks that it is the popularity of barcoding that is holding RFID back. She says that complacency may miss opportunities for the technology. “For example, the 2D barcode SQRC can give new opportunities in various areas due to its public/private data features,” says Bradshaw.
And when it comes to RFID, as it moves out of the early stages of the adoption curve, sometimes it’s actually the supporting software, hardware and associated companies that are the limiting factor.
But it’s not all doom and gloom, because there are companies out there who really do understand and benefit from RFID. “Just like barcodes (which also went through a similar gestation period), the industry will catch up, so currently finding the right hardware and systems integration partner is key,” adds Bradshaw. “RFID has been on Gartner’s technology curve as a hot topic many times but over the years, we have seen minimal interest from customers wanting to introduce it,” says Eric Carter, solutions architect, Indigo Software. “It’s expensive as an investment to deploy and integrate with other systems, and barcodes can usually go an equivalent job.
“Unless the products being tracked are of a minimum value, or you have economies of scale through buying millions of tags to reduce the cost, it’s usually not economically viable.”
He says that the majority of the business’ customers actually can’t justify the costs of implementing RFID technology when a barcode can do the job equally as well. For Ingenica Solutions, which currently offers solutions for improving back office efficiency in the healthcare environment including the NHS, both barcoding and RFID technologies are much more ingrained in the retail and manufacturing environment. Healthcare is just starting out, so from that perspective, there is a lack of knowledge, understanding and potentially ownership within those providers of healthcare about how these kinds of technologies can really benefit the sector.
“ The way that the NHS is funded and budgeted means that investment in new ways or working and technology are hard to invoke in this type of organisations,” says Ingenica Solutions’ Nicola Hall. “There are many stakeholders and silos that need to input to the process, but importantly the changes cannot be made without the Clinicians being on board.”
Of course, barcoding remains one of the leading technologies for supply chain management. But are there any other technologies in the market set to take the lead?
“[Barcoding] will continue to evolve together with RFID to meet the changing needs of companies,” says Steve Clapham of Datalogic. “Rather than technologies that will compete directly with RFID and barcoding, we believe a number of technologies will come to the forefront to work alongside these data capture techniques and offer more functionality”.
Datalogic is seeing a growing demand from customers to provide image capture technology that allows a user to take a photograph of an item at various points along the supply chain. If damage occurs to an item, it is easier to identify where that damage may have occurred and prevent future instances.
“Imaging technology can also be used to calculate the dimensions and weight of a packaged item to accurately apply the appropriate postage,” says Clapham. “Again, this is an area where we are seeing increased interest for technology that will complement an existing barcode solution.”
Nicola Hall at Ingenica Solutions says that once all inventory and other areas used by businesses have an RFID tag attached, the companies or institutions will have virtually perfect information about where things are and what’s happened to them. “This all generates data,” says Hall. “The next evolutionary step will (and already is in some cases) business intelligence applied in real time – to that data.”
As a business becomes more efficient, business intelligence is able to monitor the profitability of a company, performance of specific business units, and deliver KPI information direct to management. All in an instant.
“This is when BI will start to show tangible results as reactive systems automatically alter parameters on the fly to ensure improvement or delivery of the programmed service,” says Hall. “Business will use machine learning to continually optimise their processes (and use the business intelligence tools to perform real-time analysis) to dynamically enhance the performance of their supply chains.”
This ensures that any issues are dealt with quickly and automatically – allowing any business to eventually achieve much better performance than in the past.
Voice is a potential technology that could compete with both barcoding and RFID. “Warehouse staff can pick with voice and do not necessarily need barcodes to do so,” says Alan Wilcockson, technical director at Red Ledge.
But Gavin Stoppel, product manager at Harting, says that there continues to be constant developments in RFID, in line with changing applications emerging.“ This results in RFID continuing to be a strong player in the market,” he says. “New solutions are being developed catering to applications that require higher speed, increased data, compact tags and ruggedness to deal with arduous environments.”
This article first appeared in Logistics Manager, February 2018