Question

Identify at least three areas in a typical supply chain where RFID could be used to improve efficiency. For each area identified, you need to explain: What type of inefficiency is likely to occur and how much (reasonable estimate based on available data) would it cost the supply chain member? How would RFID improve or reduce this inefficiency?

Answer 1

RFID is Radio frequency identification. RFID has small tabs which are identifiable using radio frequency. This facilitates the auto detection as well as identification of the objects. This technology has proved to be quite facilitating for the supply chain of the company.

The areas in a typical supply chain where RFID can prove to be effective, are as follows:

· Earlier scanning products in warehouse used to be a time consuming, monotonous process as it was conducted manually by workers. The overall efficiency of this process also used to get affected because of the time consuming job. Any mismatch in inventory can affect the overall order and can make the company lose its customer. With the integration of RFID, the overall scanning process gets automated. The RFID tags and readers integrated on the products gets auto-detected, thereby facilitating record keeping of the warehouse.

· The company’s production process and warehouse are processing and storing products pertaining to different orders at the same time. Hence there is high probability of order mismatch. This error can prove to be quite costly for the company as the customer may reject the entire order. With the integration of RFID, order processing as well as segregation can be done quite easily. RFID identifies and helps in collating the products pertaining to a single order. This way, efficiency in order fulfilment process is maintained.

· Supply chain is all about managing flow of raw materials as well as finished products. Earlier real time tracking of the procurements and deliveries was quite difficult. Production team had to work on presumptions and this could cause a lot of wastage and rework. With the integration of RFID, real time tracking of supply chain elements got facilitated. The production could be easily planned based on procurement status of raw material. RFID helped in enhancing the overall efficiency of the supply chain process.