Even in the midst of this inflationary period, you’ve probably seen an abundance of “on sale” advertising lately. Retailers are reducing their inventories of everything from printer paper to washer/dryers. Beginning in 2020, businesses large and small stocked up, hoping to manage supply chain uncertainties. Now they’re in an over-buying situation, riding the inventory boom-bust roller coaster as they try to balance supply and demand while inflation works its way through the economy.
Inventory management is 50% a knowledge game and 50% a guessing game. You may know what you have in stock. You may know the supply levels needed to maintain uninterrupted operations. You may know what the historic demand has been. But you have to make an educated guess at the future supply and the future demand. That’s where things get tricky. In uncertain times, you may find yourself over-buying “just in case.”
Excess inventory ties up a lot of cash. Inflation demands a lot of cash. Before turning to external funding from banks and investors, businesses are searching for internal sources of cash. Inventory reduction is one cash source, and yet it’s risky to reduce inventory while the economy is still in flux.
Better knowledge reduces the uncertainty. The better your inventory knowledge is, the better your guesses about your future inventory needs. Acquiring better knowledge, however, can be costly in terms of time and labor, just at a time when you’re hoping to spend less cash. This is the inventory management conundrum.
RFID is the answer. Better inventory knowledge is more than just having an accurate count of stock on hand and a sales or usage count over a week or a month. Better inventory knowledge means getting information in real time, on demand. Better inventory knowledge lets you make decisions ahead of a supply crisis, or respond quickly to other movements in your entire supply chain.
Better inventory knowledge gives you a competitive advantage.
The 19th century Rothschild banking fortune was established when the family used carrier pigeons to get information about events that influenced the economy – information that no one else had in those pre-telegraph days. The Rothschilds had better knowledge. They didn’t have to guess about the future.
RFID does the same thing for businesses today. With a combination of handheld and doorway readers, RFID allows you to have continuous polling. Warehouse inventories are updated in real time. You have better inventory knowledge. No other inventory information system delivers inventory data faster, as this video shows. Get better knowledge from RFID and avoid the cost of over-buying.
Inflation is the hot topic these days. A perfect storm of bad weather, a pandemic, armed conflict, and supply chain breakdowns have put a price squeeze on consumers and businesses alike. There’s plenty of blame to go around, but finger-pointing isn’t a solution. Instead, smart business leaders are looking to their own operations for ways to mitigate inflationary pressures.
One of those solutions is technology, in the form of better information, increased efficiencies, less waste, and speedier actions. RFID technology in particular addresses these needs, and it’s a tech solution that already exists in many operations. From logistics and retail to healthcare, pharma, public safety, and education, RFID counts objects and tracks their movements with unmatched speed and accuracy.
Here’s how RFID combats inflation:
Accurate information – RFID’s inventory accuracy approaches 98%, far above any handcount. With accurate information, over-ordering is eliminated, saving time, storage space, and money at a time when conserving funds is exceptionally important. With RFID, a pharmaceutical manufacturer, for instance, doesn’t have to contract for extra warehouse space and over-order in case their inventory isn’t accurate.
Increased efficiencies – RFID tracks supplies from manufacturer to storage to user, creating an early-warning system for potential stock shortages. Managers can adjust their order timing to account for uncertain supply chains, keeping adequate supplies on hand for operations at all times. Hospitals, for example, can keep a steady supply of medications flowing from their in-house pharmacies into the hands of patients.
Less waste – RFID provides aging information as well as quantity and location. Whether a business is working with perishables like foods or drugs, or longer-lived items like durable equipment, using operational inventory in a timely manner prevents waste. Return on inventory investment stays high, and inventory losses (and costs) stay low.
Fast actions – RFID is constantly monitoring an inventory’s quantity, location, and age and delivering actionable data. Managers can react quickly to any opportunity, whether it’s incoming supplies or outgoing products.
Inflation is, in part, a consequence of actions out of our control. RFID puts you back in charge of the things you can control. Use its data to manage better, and stand up to inflation.
Shortages and hoarding were two of the many unwelcome side effects of the pandemic. Remember the Great Toilet Paper Shortage of 2020? A similar effect was felt in many business sectors. Manufacturers experienced shortages of parts or materials. Hospitals ran short of PPE and other supplies. Out-of-stocks cost retailers billions in a year.
Businesses responded to shortages by overstocking inventory. But overstocking is costly. Buying excess inventory is expensive; storing the excess adds additional costs. And if demand suddenly drops, your business is left holding the bag.
The just in time (JIT) production and distribution chain has been the enterprise holy grail for more than 3 decades. It only works if every segment of the supply chain communicates with every other segment in a timely manner. Any lapse or slow-down of communication means potential or actual shortages, with a ripple effect that is felt all up and down the line. Time is indeed of the essence.
And timely communication is where RFID shines. Not only does it track your inventory coming in the door, it tracks it as it leaves. And it communicates that information to your ERP system, in real time. At any given moment, managers can know exactly what they have on hand, and they can re-order at the right time to avoid a shortage, or an excess.
Moreover, this close monitoring of inventory doesn’t add to labor costs. Door-mounted RFID readers collect information automatically as inventory moves in and out. There’s no need to wait for a manual check-out, or even slow down for a bar code reader. RFID wins the inventory race every time, as this video shows.
Fast, accurate tracking of inventory is the key to keeping the supply chain moving smoothly and profitably. The data collected from RFID lets businesses confidently predict supply and demand throughout the supply chain. RFID is your ally in the battle for profitability.
RFID began as an inventory management tool, but now it interfaces with every part of an organization. Today there’s an RFID application that will make your operations more efficient, more productive, and more profitable, no matter what your business is.
RFID’s digital records replaced pen-and-paper recordkeeping. As Jeff Schmitz writes in Forbes, RFID began by tracking the location and number of tangible items in a company’s inventory. Its speedy information delivery gave businesses a greater degree of agility in managing the flow of goods.
Then operations managers began to realize that RFID could transform from an inventory monitor to an enterprise-wide information system. An RFID-based “enterprise intelligence” system provides real-time or near-real-time updates on:
Levels of supplies
Work in progress
In addition to inventory reports, of course.
RFID is even integrated into automated manufacturing, connecting manufacturing execution systems (MES) to enterprise resource planning (ERP) systems and the production floor.
But RFID doesn’t stop with manufacturing and warehousing. Service industries too are benefiting from the speed, accuracy, and efficiency of an RFID intelligence system. Just a few of the service sectors making use of RFID:
Transportation, Logistics and Postal Services– Have you received a notification of a package delivery or updates on a shipment? These service companies use an RFID-to-customer-order interface to keep recipients informed.
Law Firms and Libraries– RFID doorway readers monitor the movements of paper documents embedded or tagged with RFID. One-of-a-kind documents are no longer at risk of being lost or misplaced.
Healthcare– Medical equipment, medications, and staff can be located without delay,
IT– Equipment in system control rooms and server vaults is tracked to eliminate loss or theft. Company-owned electronic devices (tablets, laptops) assigned to staff are tracked throughout company facilities, and as they leave and return to the building.
The bottom line: Practically every type of business has a need for RFID in many parts of its operations. But as Schmitz points out, “There is no such thing as a standard implementation strategy for RFID, and there is no single ‘best’ RFID solution for all organizations — or even for a particular industry.” An experienced RFID integrator can develop a custom solution for your unique business, and you can begin accruing the benefits of expanded digitalization.
Now that businesses are cautiously reopening, RFID is being deployed in the form of wearables that help employees maintain social distancing and stay safe in reopened workplaces.
In the U.S. and Europe, RFID suppliers are creating bracelets and smart watches with embedded RFID chips that alert users when they are too close to one another. Ford Motor Company, for example, has been testing an RFID wearable in the factories where it produces ventilators and respirators. Workers wear an RFID-enabled smart watch that vibrates and issues a color-coded warning whenever they move too near.
The watches also send social-distancing data to supervisors so they can modify workflows for better distancing. Further, the data provides supervisors with workplace contact tracing. If an employee becomes infected, other employees who have been in contact with that person can be identified for testing.
A spokesman for Italian RFID tech company Engineering points out that RFID’s proximity and contract tracing technology lets businesses isolate only the infected workers and their contacts, rather than all the employees. If only a small percentage of employees have to be pulled off the line, production can continue with little or no interruption.
Employees at many companies are teleworking to reduce their risk of infection. But even when telework is enabled by document imaging and digital asset management, it isn’t practical for every type of enterprise. Manufacturing, scientific research, logistics – these all require workers to be in the same place at the same time. The “new normal” is going to call for new ways of doing business and new applications of existing technology.
RFID is a mature, robust technology, a proven risk reduction tool for asset management and security. This same technology can be applied to a different kind of business risk: an infected workplace. RFID is easy to adapt for the socially-distanced workplace. As RFID is protecting your staff, it’s also protecting your business from additional production slowdowns. RFID is part of the solution for a safer workplace during reopening, and into the future.
Speed is the name of the game when it comes to inventory and asset management, and RFID delivers the data faster than any other technology.
RFID is everywhere. Those plastic tags you’ve seen in retail stores; the small square metallic stickers on packaged goods; even your pet’s ID chip – those are all RFID tags. They store information about the item they’re attached to, and they deliver that information to an RFID reader’s screen.
Don’t bar codes manage information the same way? Not exactly. The key difference is in the way an RFID tag communicates with the reader. Bar code readers must “see” each bar code to collect the data. There has to be a clear sight line between the bar code and the reader. RFID readers, in contrast, don’t “see” the tag. They “hear” it, via radio waves sent by the tag. RF = radio frequency, ID = identification.
RFID readers can “hear” the signals from all the RFID tags in an area, all at the same time. Bar code readers, because they rely on “seeing,” can record only one bar code at a time. This video shows a bar code reader and an RFID reader in a head-to-head race.
Spoiler alert: The bar code reader is not going to be invited to the Kentucky Derby.
RFID technology has an application for every business sector.
Every business has a need for speed, because time is money. The less time it takes to collect information about assets, the more time you have to spend on your organization’s primary mission. RFID streamlines your workflow, improves inventory accountability, and monitors assets. Turbocharge your business with RFID.