Using RFID for inventory and/or asset management
Inventory is one of the biggest capital expenses in your business. Managing that inventory is a daunting task. You need to not only know how many items you have on hand and where those items are located, you also need to track details on each item you carry, along with the value. Radio Frequency Identification (RFID) allows you to accurately track items, whether those items are raw material, finished products, or company assets.
Benefits of RFID
An RFID system will capture the same data points as a more traditional inventory system (stock counts, locations, movement). But there are a variety of benefits to RFID enabled systems that far exceed those found in other, less sophisticated inventory systems.
- More efficient inventory tracking. RFID is a passive system, meaning it allows you to track your inventory without having to be actively involved in a scanning process. As RFID tracking is continuous, an RFID system will allow you to query an item in the system and immediately get insights into product locations and quantities.
- Easier item location. Less time spent locating inventory means more time in production, fulfilling orders and focusing on selling to your customers. Because you are automating the inventory system, you no longer need as much staff on hand to actively manage the inventory.
- Real time material insight and procurement forecasting. The real-time nature of RFID enables a just-in-time (JIT) inventory management system. Coupled with your sales management system, you can know how much you have on hand and how much needs to be ordered to meet the needs of current orders.
- Improved order status monitoring. Time to completion updates provide your staff accurate fulfillment times. In a manufacturing environment, you can track where in the manufacturing process an item is at any time and the work that has been completed on the item.
- Better inventory accountability. Complete movement histories allow you to track how your inventory moved through the business. Understanding the flow of material and products through manufacturing areas, the warehouse, and the retail floor will help you identify bottlenecks in the fulfillment process.
- Loss reduction. Many larger retail stores are using RFID tags to assist in loss prevention. RFID scanners can even help you to identify exactly which item set off the alarm. This is also useful in the manufacturing and distribution environment—allowing you to pin down the cause of sudden changes in the inventory that may be due to theft.
- Improved asset management. RFID isn’t just used to track inventory. It is just as powerful a tool when used for asset tracking. Consider a fleet management application of RFID tracking: A company can use RFID systems to track equipment and vehicles as they enter and leave the garage for storage or repairs. Coupled with RFID readers at the entrances and employee badges with RFID chips, the asset and driver are recognized and logged when they drive into a garage and when they leave. RFID monitoring of office equipment is also becoming increasingly common. RFID chips can even be used to track data including asset acquisition dates, end of life dates, and repairs/maintenance.
Components to an RFID system
There are a few steps to recording RFID data.
- Data stored within an RFID tag’s microchip waits to be read.
- The RFID tag’s antenna receives electromagnetic energy from an RFID reader’s antenna.
- Using power from its internal battery or power harvested from the RFID reader’s electromagnetic field, the RFID tag sends radio waves back to the reader.
- The RFID reader picks up the tag’s radio waves and interprets the frequencies as meaningful data.
Let’s take a closer look at the components to an RFID system that play a role in the data collection process.
RFID tags vary in their size, inner workings and usage depending on application. A label format type of tag is typically used for consumer products. There are many other types of RFID tags available, though. Tags are often designed specifically for certain applications, with optimized versions available for products as different jewelry, heavy equipment, cargo holds, and many others. The amount of data which can be stored in a tag varies as well.
RFID readers are similarly available in different formats. In a warehouse, RFID readers might be attached to a forklift. In a retail environment, they might take a handheld format. Very often, readers are installed by the entrances and exits of facilities, allowing you to track authorized and unauthorized movement of inventory or assets within the facility. Depending on your environment readers that operate in different frequency spectrums are also available to ensure you don’t run into interference issues. Additionally, lower frequency readers have a far more limited distance range than their high frequency counterparts. The distance of products to readers can play a major role in determining which type of RFID reader is right for you.
RFID and software integration
While an RFID system is great for tracking basic item information and the location of your inventory/assets, the true scope of the system is amplified when integrated with your ERP and CRM systems. Integration propagates data necessary for a variety of business uses including order tracking and financial asset reporting.
Integration with your CRM software can be a game changer in your business. Imagine your company sells a serviceable product. When your technician goes to service that product, the RFID system will allow him to read the service history and quickly determine the right course of action. Maintaining detailed service histories presents a wealth of business information that can be applied to customer up- and cross-selling.
Taking the next steps
RFID systems are complex, however, finding the right vendor and right solution does not need to be complex. Whether you are looking for an add on to your current system or a complete ERP system with RFID functionality, we can help. Through a brief phone call, our software specialists will look to better understand your business and software needs to help you locate the most relevant solutions for your requirements. Get started today!