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5 Ways RFID Technology Facilitates Inventory and Production Visibility

By Emily Newton


Radio frequency identification (RFID) tags help manufacturers and suppliers maintain inventory oversight while reducing the potential for errors and time-consuming practices. Here are some real-world applications that show what the technology can do.

1. Improving Automobile Component Tracking

Vehicle tire brand Michelin intends to install RFID tags on all its tires by 2023. The company plans to harness RFID tag usage in several ways. For example, tire suppliers can use the data to identify which models they install most. That insight prevents out-of-stock incidents.

Moreover, since the technology identifies the exact tires used, it could help Michelin become more aware of batches that wear down too quickly or have other faults. Michelin representatives even say drivers may eventually see an icon on their dashboard that details their automobiles’ specific tires.

In another instance, a collaboration between Mercedes-Benz and the Fraunhofer Institute for Factory Operation and Automation IFF involved using RFID tags to identify production scheduling blind spots. Project managers could quickly see where slowdowns occurred, making it easier to deal with them efficiently and have the necessary parts to keep production running smoothly.

Due to the high-value items on an automobile assembly line, any delays prove exceptionally costly. However, RFID tags could provide a relatively straightforward solution for avoiding misinformation and bottlenecks.

2. Maintaining Visibility Into Medical Supplies and Production Abnormalities

Ensuring product oversight is crucial for materials that people inject or ingest. That’s why pharmaceutical companies commonly use real-time water usage data to avoid waste and prevent supply disruptions. Water is the main ingredient in vaccines. Many of these businesses are also investing in artificial intelligence (AI) to maintain the correct production environments and associated assets.

A 2019 pilot concerning pharmaceutical manufacturers used RFID to improve their existing tracking methods, most of which used 2D barcodes. A company called Kit Check got on board during the trial, too. RFID technology alerted pharmacy technicians to missing, expired, or incorrect contents of medication trays. Verifying accuracy reportedly took only three minutes compared to the half-hour required without the technology.

Statistics indicate that more than 30% of drugs fail in Phase II of clinical trials. People understandably sighed with relief when Pfizer’s COVID-19 vaccine candidate was the first approved for emergency use in the United States. It requires extremely cold temperatures, though, and cannot stay at room temperature for longer than a limited period.

Pennsylvania’s Reading Hospital depends on RFID technology to track the number of refrigerated Pfizer vaccine vials and their expiration dates. The organization also sends distribution data to the state’s health department.

3. Applying Access Controls to Packaging Machines

RFID technology can also help manufacturers ensure that unauthorized parties do not attempt to operate packaging machines or alter crucial parameters. One company offers a solution where people use fobs or cards to gain access to the equipment.

The technology creates an ongoing change log to confirm when people alter parameters and what they tweaked. Such information makes it easier and more efficient to troubleshoot issues, including those related to a degradation in supplied products.

For example, machine users may suddenly alter the dimension parameters on the packaging machine after getting a new shipment of corrugated cases. If so, that could indicate a quality issue to bring up with the supplier. It may also help manufacturers track how often packing supplies get used—and by whom.

This implementation of RFID combines inventory control with security, particularly since the system can grant people different privileges with the machine based on their roles within the organization. Decision-makers at companies using this product may find that it’s easier to justify the costs of installing it, since the tool fills two needs.

4. Accelerating Inventory Assessments and Maintaining Transparency

An RFID tag can also help track a product’s location within the supply chain and safeguard it against theft. Some companies even install permanent RFID tags. For example, such a tag associated with a freight truck could help manufacturing plant personnel prepare to receive incoming shipments of raw goods. It could show the real-time location of the items, plus their exact origin. It might confirm which field potatoes come from, for example, and it could automatically record and distribute confirmation of receipt for the grower.

A manufacturer or supplier could also connect RFID data to individual customers. In that case, it becomes easier to determine valuable specifics, such as whether some products sell more rapidly in certain parts of the world. Moreover, connecting RFID data to customers also makes information more accessible after manufacturers hear about possible defects or recalls.

Moving ahead with an RFID tag system also cuts down on manual tasks and paperwork. The U.S. Social Security Administration participated in an RFID trial, and estimated 60,000 USD was saved in managing an 86-vehicle fleet. RFID tags prevented the need to manually sign out each automobile someone used or track its mileage. Thus, RFID tagging facilitates inventory management by minimizing the tasks prone to human error.

5. Enhancing Product Distribution Accuracy

Getting supplies to the right places becomes more complicated as the overall number of destinations goes up. A South African retail group with a presence in dozens of countries and thousands of stores decided to use RFID technology to receive more up-to-date details about each supplier or retailer’s needs.

In one example, products across the group’s global supply chain feature labels encoded with RFID data. That information shows which suppliers receive shipments from particular manufacturers after production.

Counting stock after products arrive is much faster, too. Employees previously used a largely manual process that took days and required workers to put in overtime hours during store closures. However, with the help of RFID, people can get the job done in a matter of hours.

Facilitating the Better Usage of Time

These five examples show that manufacturers can save substantial amounts of time by using an RFID tag system. As a result, they can cut costs and notice fewer mishaps due to data entry errors and other blunders that can cause productivity losses.

Additionally, RFID tags help create a verifiable information record. If a manufacturer wants proof that a supplier sent a shipment, they can show that without anyone at the company needing to pick up the phone or send an email.

RFID tags do not represent new technology. However, companies are using them in purpose-driven ways that support business goals. As these use cases continue to become more prevalent, more business leaders should feel confident about applying them to their enterprises, too.



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