Radio frequency identification (RFID)

- "Where's my stuff?" Many years ago, that was the daily cry from just about every warehouse manager around the world. Here's the kind of problems they were facing. A forklift operator would remove a pallet of goods from a truck and proceed to its designated storage location, but the space would be full of other materials, so the operator would drive around the warehouse until he found a good spot to put down the pallet. Sometimes nowhere near the designated spot, sometimes behind a partition, or a wide column where it was out of sight. The warehouse manager knew that pallet of goods was received, but for weeks, and sometimes much longer, he simply could not find it. And that is the origin of RFID, or radio-frequency identification in the business world. That warehouse manager just needed a way to find all his stuff. RFID technology uses a small computer chip on a tag that transmits radio signals to an electronic reader. The tag is attached to an item like a pallet of goods in a warehouse, to track its location and any movement from one place to another, exactly what warehouse managers were asking for way back in the 1980s when the first RFID patent was granted. And that's the way the business world looked at RFID for many years, the only way, simply help me find my stuff. Adoption of this technology was very slow at first, because of the expense. Many companies were waiting for the price of an RFID tag to fall below one or two cents before they made a commitment. And for years, most retailers waited for Walmart to drive down those costs with their sheer volume. Today, RFID use has expanded far beyond the warehouse and the simple location function. It is now very much an analytical tool for inventory management. RFID allows you to track incoming materials, supplies, and components throughout a global supplier network. And it allows you to track finished goods delivery to your customers throughout a completely different global distribution network. With RFID technology, you not only know where your stuff is, you now can find and analyze bottlenecks within your system. You now can understand your inventory management practices and put better control procedures in place. Another recent application of RFID technology is in the product recall process. Modern inventory management techniques allow you to track the final product back to its original source. Food recalls are a good example. If a customer is ill after consuming your product, RFID traces that item back to the processing plant, the agricultural region, and often the specific farm or ranch. Rather than having to recall every product from every market, you now know exactly what products have a problem, and you can manage a specific correction. Pharmaceutical companies use RFID to track every ingredient in every medicine they sell. Computer chip companies do the same with every material used in their manufacturing plants. Here's one of the most interesting RFID applications I've heard lately. Future grocery shoppers will be able to place their items directly into bags in their shopping cart. Because RFID does not require line-of-sight transmission, like barcodes, you'll be able to simply push your cart through a scanner and it will ring up your grocery bill. By the way, when you walk through the scanner, it will read and charge your credit card, no need to take out your wallet. It seems that the applications for RFID technology are boundless, and that's why a technology that is decades old is still considered leading-edge today. RFID can be a powerful tool to assist inventory analysis, control, and management, but it's not the right fit for everyone. How much inventory does your company manage? How many different kinds of products, material, and components? Well, where is it located? It's good to ask these questions, because in general, the more complex your inventory structure, the more likely you need RFID.