Other Voices: Successful RFID asset-tracking systems

Editor’s Note: The following column by Keith Jones, P.E., president, Prism Systems and Michael LaGrega, MSCD, RFID and code reading systems engineer for Siemens Industry, is part of Modern’s Other Voices column. The series features ideas, opinions and insights from end-users, analysts, systems integrators and OEMs. Click here to learn about submitting a column for consideration.

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It’s not news that today’s factories and supply chains are vastly more efficient than they were even a decade ago. One reason, of course, is advanced automation. But another is radio frequency identification (RFID).

RFID has helped manufacturers, their suppliers and the logistics companies serving them both to improve how they track their various physical assets, whether feeder-stock inventories, work-in-progress, finished goods or goods-in-transit. They also use RFID to track tools and equipment.

With RFID, companies can obtain precise, up-to-the minute information about the locations and movements of their assets. The more accurately a business knows the whereabouts and status of its assets, the more it can maximize their utilization and return on the capital invested in them.

With RFID, companies have successfully driven out of their business models enormous amounts of time, variability, errors and cost. This has given them much greater operational visibility and asset utilization. In turn, they’ve realized huge improvements in speed, quality and profitability.

How RFID works.
Simply put, in industrial applications, an RFID system starts with a small electronic tag with a radio antenna and chip aboard that is placed on an item, case of items or pallet of cases. Tags feature a unique 64- or 96-bit EPC identifier – a “license plate” of sorts – programmed into the chip. They can be affixed during an item’s production or placed at any later point as it moves through the supply chain.

When an item, carton or pallet with an RFID tag passes through a verification point, an RF “reader” will sense the tag’s EPC if it’s an active, battery-powered tag. If not, the reader will emit RF waves to induce a current in the antenna of a passive, non-battery tag. Either way, the EPC is read and sent to a database containing an asset’s record. The record can be updated with information such as:

● The type of asset and its date of manufacture
● Where the asset came from and where it’s going
● The times at which the asset was moved
● Who was responsible for moving the asset

Importantly, no line of sight is needed to read the EPC, as in the case of traditional barcode labels. That enables items within a case and on pallets to be identified as they move through an RFID reader’s RF field without opening the carton or pallet.

Typical placements for RFID readers include the doors and floors of factories, warehouses, shipping and receiving docks, retail back rooms, even store shelves in some cases. In some applications, RFID tags are also being used as part of full-circle resource recovery efforts, especially for goods containing valuable or highly sensitive components that can be reused, recycled or need to be tracked for security reasons.

RFID readers are necessarily networked. That’s because the EPC data they gather needs to flow into some kind of a company databases, where an asset’s status is updated. While RFID data will typically stream into databases of some kind, it can also be used by manufacturing execution systems (MES) as well as higher-level enterprise resource planning (ERP) systems. The former will capture the data into historical records to track assets; the latter can use the data to trigger other production or warehousing operations, like restocking low inventories.

Types of RFID applications
RFID-based asset management can have important business benefits in such areas as:

● Stock availability. The constant automatic updating of information enables a system to trigger a warning as soon as stock levels reach a minimum threshold. Company personnel can then submit replenishment orders immediately.
● Security and shrinkage. RFID tags can record whether packaging has been tampered with, as well as the locations of assets. This enables companies to reduce or prevent theft and other causes of inventory loss, such as product diversions.
● Documentation management. RFID systems can automate the processes of updating the delivery, receipt and reconciliation of documents. This can help a company identify and analyze potential problems, speeding up the order-to-delivery cycle.
● Shelf-life management. RFID systems make it easier to identify the age of time-sensitive products, helping to manage these products better. Older products can be placed nearer to the front of shelves, for example.
● Inventory management. RFID systems can reduce the potential for human error in stock-taking and eliminate the need to scan individual barcodes. This prevents inaccurate data capture and reduces warehouse cycle times.
● Management of defects and recalls. You can use RFID information to determine where defects occur in the product cycle and to identify individual products that need to be recalled.
● Distribution. By enabling companies to track the locations of assets, RFID systems enable faster, more accurate distribution of products – to warehouses or retail outlets, for example. You can analyze RFID-generated information to track product sales velocities, locate bottlenecks in the distribution chain, and improve other business processes that can impact product delivery cycles.

Well-conceived business cases for RFID asset-tracking systems based on conservative assumptions can often produce paybacks in 18-24 months. Like any industrial application, RFID requires careful planning, engineering and execution with expert and experienced assistance.