Labelling and identification technology

More bottom line payoff

RFID implementation done right results in real-life, bottom-line value.

Sato, global leader in barcode printing, labelling and EPC/RFID solutions, explains how companies investing in RFID tagging of their products can maximise the benefits of its capability to drive business process improvement, increase supply chain efficiency and ultimately improve bottom line results.

Understanding the impact of data collection and tracking is essential to RFID optimisation. Internally, companies can collect data at multiple chokepoints to, among other things, make determinations about process or product flow improvements or to validate proper shipment components and quantities. External data can indicate problems with either too much or too little inventory in the supply chain, product idle time that can be removed from the system or even problems associated with out of stock conditions at the retailer. Many companies are now utilising the RFID data as a Proof of Delivery (POD), which is a very accurate tracking and tracing method since the RFID serialisation is unique to a product, load or pallet.

Data integration involves the physical connection of the collected data into the host information system. Data integration and how the data is to be utilised is the most important part of any RFID implementation. Where the data is captured, how it is stored and what is parsed or presented back to the host systems will define the success of the deployment. In most data collection applications today, data is captured and sent back to host systems using barcode technologies. RFID data is really no different in the way it is captured and processed; the difference is that the data is in an electronic format and does not require human intervention or line of sight. Think of RFID as an electronic barcode that allows for additional data storage on the tag and, in many situations, can be modified or updated as needed. This is a huge advantage over traditional barcodes.

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Deriving value from data

The essential RFID value flows from data collection and integration into the decision making process that ultimately leads to the implementation of ideas, processes or controls that bring value to the organisation. For example, one supplier has been able to improve its accounts receivable (AR) process by 72 hours just by having the electronic POD sent when the tagged products are received at their customer’s warehouse. This faster AR process has increased the company’s bottom line due to the interest saved on improving its cash flow. This benefit was realised during the installation and the savings actually paid for the installation of the RFID infrastructure.

Only through the transformation of collected internal and external data into information, businesses can begin to make decisions that positively impact supply chain performance and lead to the RFID deployment yielding significant bottom line results.

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