RFID (Radio Frequency Identification) technology is fast replacing obsolete ways and technologies of asset tracking and inventory management.
By tradition, asset tracking and inventory management in retail supply chains depended on these old-school methods:
- Accounting Tools & Systems: Individual details of each item in an inventory are manually entered into a spreadsheet (e.g. Microsoft Excel)
- Manual Systems: A person, literally, sits down in front every entry/exit point and writes down details of each item of an inventory on a piece of paper.
These old school methods are the reason behind many prevailing problems, which augment as the size of the inventory increases, and the abovementioned methods stop working.
- Inconsistency in data entered: missing, wrong, or duplicate data.
- High cost of staff training: Training staff, depending upon the size of your inventory, can take anywhere between a few weeks to few months.
- System is prone to human errors: Without validation of any sort, such methods of asset tracking may lead to blunders and revenue loss.
- Lack of a central customer database: Inventory managers will have a hard time getting hands on to latest inventory information owing to a lack of a central database.
- Lack of security: we all know the sort of security data written on pieces of paper and spreadsheets draw. A person just needs a phone with camera or a thumb-drive to make copies.
- Slows down the operation: a person manually entering data is much slower than an automated system that updates the database itself.
- Hidden Costs: the old-school method will make you lose money owing to mistakes, typos, duplication, and slow operations.
Modern asset management and tracking require the employment of latest technology. For large inventories, paper-based and spreadsheet tracking and management systems are out of the question. In addition to RFID, barcode scanners are also a used for real-time tracking of asset.
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RFID vs Barcode
Manual scanning, wherein a person manually scans bar code printed on each item at every strategic point, brought in some sort of automation to the process but it has it own set of shortcomings against RFID.
Thus, although barcode has been around for quite some time in the market, the focus is shifting fast towards RFID based solutions since they have various advantages over traditional barcode based solutions:
Not that it’s clear that RFID is the best method of asset tracking. Let me introduce you to RFID and how it works. For a clear understanding, I’ll take an example. So, keep calm.
Thorpe Pharma’s Dilemma
Thorpe Pharma is a manufacturer of biotechnology and pharmaceutical equipment.
Each manufactured unit costs several hundred thousand dollars is made of high-precision components. Each component has a unique ID attached to it so to a manufactured unit.
The components are manufactured at various shops in the factory. From where, they are moved to the assembly department to assemble the final equipment.
An assembled unit undergoes various quality checks before being packed in crates and moved to the shipping department.
Thorpe’s customers call the service desk to lodge a complaint in case the equipment malfunctions.
This could be defect, component failure or gaps in assembling. Whatever, the support person must diagnose the problem and assign a Service Engineer to it.
The components are ultra-sensitive and can’t be commonly fixed at the customer's. Thus, the service engineer replaces the malfunctioning component right at the site.
That is, components are always moving department to department and, as in the above case, equipment to equipment.
As such, the warehouse managers, service engineers and sales force of the company must know the status of the component’s.
The service engineers must learn when a component arrives or moves out.
Moreover, the engineers must be able to track a component since the day it was manufactured.
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A barcode based solution
Thorpe employed the barcode technology to track the movement of components.
However, with so many components on the move, tracking the valuable assets and the moving assets was a nightmare for Thorpe’s management.
Peerbits developed a complete solution for both moving and physical assets tracking, inventory assets management, and fleet management using RFID technology for the company.
A unique item identification number is printed on an adhesive sticker and pasted on each component and the assembled unit.
At every strategic point, Thorpe personnel scan the bar-code with a barcode scanner.
The scanned data reaches a software program that processes and records them in a relational database table.
How RFID technology works?
In RFID based asset tracking and management solution, any asset to be tracked is fitted with a RFID tag.
RFID tags, in their thin, microchip-like structure, sandwich an electronic radio transmitter, an antenna and a tiny batter.
Like barcodes, with the help of a little adhesive, they can be stuck to any surface. They can also be attached on identity cards, people, and even farm animals.
Each RFID tag has a unique identification number (UIN) attached to it. It timely sends out a radio signal carrying the UIN.
Thus, a receiver device, called the RFID reader/ scanner, extracts UIN of every tag in its range and updates to a database.
Types of RFID tags and readers available in the market
With a price drop in RFID, it is becoming more and more attractive. Here is a brief summary of the options available, including current pricing and applications:
Basic passive RFID: Good for paper, non-metal or liquid material. It approximately costs $15.
Metal passive RFID: Larger passive tags that work on data centre servers or metal-equipments. $1.50 to $4.50 (approx.) each.
Active RFID Tags: Active RFID tags are empowered in such a way that they emit signal every 30 seconds. It is highly accurate and automated with a nearly 100% read rate.
Handheld: Passive RFID handheld device is best for manual auditing of a location, data centre rack, etc. It can cost you about $2500 to $3500 each.
Fixed Position passive RFID: Fixed position passive RFID readers are installed in a doorway that detects the moving assets. Their estimated cost is $15,000–25,000 per portal.
Active RFID readers: Active RFID readers cover a zonal area of more than 2000 square feet. It costs comes to $1,250-$1,500 for each piece.
Active RFID Rack/Room Locators: RFID based room locators or rack locators work with active RFID readers to report the precise rack or room location. Figure $155-$205 each.
Communication protocol and the technology stack
The ability to scan and read from different angles and through certain material, resistance against harsh conditions, and robustness has putted RFID among the best methods to transform fleet management systems.
RFID supports two way of communication protocols to felicitate tags and the reader work in liaison:
1. TTF Protocol
Tag the communication as soon as it detects the reader field, It will simplify the tag logic but less secure because tag doesn't care what it is communicating with as long as sufficient field strength is available & compatibility issue.
2. ITF Protocol
Tag wait for interrogation by reader before transmitting information.
Security wise it is good so, Recommended for our smart inventory management system.
Creating a program to interact with the reader: Java, phpMyAdmin, SQL
Creating appropriate database schema so that all required information can be determined: History, times, current tags, past tags, etc.
Tag list & Reservation system Considerations
Current Thoughts – BST with DSW
Appropriate DB vs. Software workload sharing
System architecture of RFID subsystem
Modern asset tracking and inventory management systems rely on an RFID subsystem of a logistics mobility solution that supports a number of application domains.
Various software components working in unison to extract and process information, including UIN, from RFID tags form an inventory management software.
In a typical enterprise setup, various RFID readers are placed inside warehouses, transports and strategic points connecting them including every entry and exit.
Data captured by the readers is processed by the host computer before sending it to the database storage.
The database storage is, on the other hand, connected to RFID application, which includes Entity framework and RFID reader API.
The host computer can process data from various readers at the same time. It processes the information and buffers them for a predefined time period.
Middleware-Architecture and the database
The Asset Tracking and Inventory Management (ATIM) solution has a SQL Server database as its back-end.
The ATIM is accessed through a web interface that that can be deployed on the Intranet server of the enterprise, a virtual wide area network (WAN) or can be IP based.
An investor operator can interact with the interface using a web browser (Chrome, Firefox, etc.) on their computer, tablet or smartphone.
The web app can also be packed to create an Android and iOS app.
To integrate the RFID information and ATIM solution, a middleware implementation is required.
The middleware implementation coordinates between the ATIM database and the RFID subsystem database.
Moreover, it updates movement history of each component in the ATIM database, sending out notifications personnel on their smartphones.
The Asset Tracking and Inventory Management (ATIM) solution
In RFID based ATIM solution, each tag is authorized by means of a desktop reader.
The authorization tells the solution that this tag is now a part of the inventory and must be tracked at each level.
The tag is then attached to the package to be tracked. The packages are packed inside crates.
The integrated reader scans packages before picked up by forklifts and placed in a warehouse.
A person carrying a RFID reader scans the entire warehouse for tags.
If the warehouse management system detects a missing RFID tag, it reports to the ATIM quality operator to look into this.
If the inventory doesn’t report any missing package, the crates forklifted again and unloaded to a truck for transportation.
An RFID reader placed at the unloading points assure no package passes goes inside the truck without being tracked by the reader.
Again, the data is a validated against the tags authorized by the desktop reader.
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The illustration below shows a modern retail implementation using RFID dubbed RFID Retail 3.0.
Areas of application of RFID technology
The key application area of RFID tracking is in manufacturing, service, and retail industry.
However, it can be used in many other places. Academically speaking, RFID tracking can be used anywhere something needs to be tracked. Some of the application are.
- In healthcare, hospital staff can track patients’ health by attaching RFID tags by making them wear RFID-enabled wrist-bands. Doctors and nursing staff can check detailed information of the patient on their handheld computers and mobile devices.
- In large farms, dairies etc., RFID tags can track cattle count. Active RFID tags in form of ear tags are both cheap and light.
- RFID tracking can be used to track employees’ movement in and out of the workplace.
- In hospitality industry, access to a room can be controlled by an RFID tag.
- In cells, RFID tracking can monitor activities of the inmates which will ease the job of security personnel.
- In aviation, RFID technology can track baggage with cent percent precision.
- In a intracity transportation, RFID tags can be attached to VIP vehicles: police patrol team, ambulances, fire brigades etc. When they arrive red signal turns to green to let them pass and reverts as soon as they pass.
- RFID tags can detect empty parking space in a parking lot.
Benefits of warehouse management system
Benefits of having WMS for your logistics and supply chain business are immense. We have mentioned few of them below.
Seamless optimization of process
Inventory managers can seamlessly optimize your business’ processes by leveraging the versatility of your Smart Inventory System.
The versatility that helps you to easily track barcode labels, automated equipment, and smart scales.
This seamless optimization helps you to establish the key performance indicators, aligning operations with your goals, get absolute inventory costs, collect real-time intelligence for accurate inventory control, provides real-time updates, and implement equipment automation to smoothen the inventory processes.
Improve relationship between suppliers and the customers
With an efficient WMS software system in place, you can improve the relationship between the customers and the suppliers.
You can monitor your buyer’s behavior, accuracy, errors, fluctuations in demand and supply, and many other factors that reduce the delivery lead time and increase efficiency.
These factors along with centralized locations can also help you to eliminate all kinds of frictions with the suppliers.
Thus, you can achieve 100% customer satisfaction and an increased number of sales.
The right Warehouse Inventory Management Software helps you in achieving just-in-time inventory.
With a cutting-edge inventory management solution, you can assure both the quality and quantity as all your current assets are placed in the right places and in right quantity.
Moreover, a WMS solution also improves the lot sizes along with other parameters to achieve better inventory accuracy which ultimately results in a balanced inventory and greater warehouse efficiency.
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Reduction in overall operational cost
Having a robust WMS solution with an Asset Tracking System comes in handy as it helps you to allocate the labor by using all the available space, thus reducing any waste.
WMS based asset tracking systems allow you to streamline the picking and packaging processes along with maintaining the safety of all the perishable items.
With proper execution of all the above via asset tracking software, you can increase operational efficiencies and reduce your overall operational costs by a great extent in a given fiscal year.
Transparency in reporting
Warehouse management systems offer transparency in the inventory for all the processes such as shipping, order fulfillment, and tracking the purchase order.
Along with the transparency, a warehouse inventory solution allows its users to access the real-time data to provide better customer services that will eventually result into a great customer experience.
Improved Auditing and Security
Most warehouses require their staff to use individual user accounts for transaction data entry. This will improve the accountability of employees and reduces theft risks.
It also allows the industries to identify new employee training opportunities.
User-based access levels prevent unauthorized access to reports and analytics. It only allows each user to see as much information as is needed for their work.
Thus, you don’t have to worry about the revelation of your company secrets and losing a competitive edge.
Product Tracking and Supply Chain Management
With an interactive warehouse management solution, you can optimize your warehouse’s internal operations, which extend to the entire supply chain.
All the savings in cost and time can be passed along to your internal and external partners, enabling them to improve operations.
By improving inbound receiving, you also reduce delivery times and increases inventory visibility. That enables your drivers to use their resources, equipment, and shippers to manage inventory levels.
Improved data increases reliability and reduces the risk that may occur because of manual processes.
That same data can be shared with an individual customer, a customer relationship management system, or a transportation management system (TMS).
A company can harness the warehouse management solution’s tracing capabilities to track their physical inventories by using serial numbers and lot numbers.
Companies need this data to gain complete visibility or in case of recalls. That information can be crucial for a variety of industries.
Internal Automation Benefit
Warehouse management systems allow the user to enable extra automation solutions within his warehouse. They can streamline internal assigned tasks and facilitate the transition from paperwork to digitalisation.
This automation of the process enables a continuous improvement in existing activities by implementing more effective tactics.
Automation is of different types, ranging from automatic picking and robotic packaging, analytics-driven movements and artificial intelligence.
A warehouse management software helps you to implement these methods by providing the core elements for capturing, recording, and communicating activity.
One of the most important benefits of using warehouse asset management software is consistent updates. WMS vendors roll out the latest features as per the best industry practices. This will make it easier for companies to stay on top of the latest developments.
It allows them to use these innovations to improve their processes. The latest features can easily be added to a cloud-based solution, which makes continuous improvements even easier.
That’s the reason many enterprises are moving their warehouse operation to cloud-based software or in a cloud-based system.
Return on investment (RoI)
The ROI of RFID depends on your labor costs and the value of real-time visibility of data.
If you don’t need real-time data and labor is cheap, use passive RFID technology and handheld devices. If labor is expensive and real-time data is critical, invest in active RFID.
So, each organization has a unique profile of asset receiving, distribution and volume. And, of course, there is always the issue of capital expenditures.