Discover the Benefits of RFID for Distribution Centers

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Modern logistics are all about speed and efficiency, and distribution centres are the backbone of this system for product businesses.

As business leaders, we’re always looking for ways that we can continuously improve our operations – often focusing on ERP systems, processes, and human factors. Often though we overlook opportunities to improve on a technology that has been with us for decades – the barcode.

The barcode technology we’ve become familiar with is outdated today. As a result, it can slow down warehouse operations, increase labour costs, and create inaccuracies within our inventory. Luckily, Radio Frequency Identification (RFID) offers a significant leap forward for supply chain management.


What Is RFID Warehousing Technology?

RFID, which stands for radio frequency identification, is used for tracking the position of physical objects and their locations in real time.
Once products are tagged with an RFID tag (which looks similar to a standard product price label), a handheld reader can be used to scan and record those tags.

Whereas barcodes necessitate manual scanning of objects one by one, RFID tags can be detected and registered from a distance, allowing multiple RFID tags to be scanned simultaneously. An entire warehouse can be scanned and accurate inventory counts can be produced within a short space of time – revolutionising inventory management practices.

Although still considered an advanced technology, RFID has actually been used by large retailers around the world for inventory control since the early 2000’s. While initial costs of implementing an RFID system were previously high, today RFID tags, software, and hardware have become more accessible, making the technology a smart investment for product businesses of all sizes.

By streamlining operations, increasing inventory accuracy, and providing valuable real-time data, RFID can transform warehouse management with a positive flow-on effect for the rest of your business. Let’s explore the key advantages of RFID for distribution centres.


Unlock Operational Efficiency with Data

RFID tags are more than just trackers – they’re a goldmine of valuable insights. By analysing RFID data, you can uncover hidden trends in how products move through your distribution centre. This empowers warehouse managers to optimise layouts within their warehouse environment for a smoother picking flow. They can also predict stock needs more accurately, and ultimately make informed decisions driven by data, that lead to a more efficient and profitable operation.


Enhanced Security, Reduced Shrinkage

Think of RFID tags as digital security guards for your stock. These tags can be set to sound alarms if someone tries to take something without permission, discouraging internal theft and minimising losses due to shrinkage. Plus, with real-time tracking, you can spot any suspicious inventory discrepancies and take immediate action.


Achieve Accuracy on Autopilot

Say goodbye to manual counting errors and expensive stocktaking. RFID technology counts your inventory quickly, achieving near-perfect inventory accuracy rates without the need for human stock-takers or agencies.

With RFID readers scanning multiple tags simultaneously, you gain complete visibility into your stock levels, reducing discrepancies and stockouts. This is particularly valuable for eCommerce businesses, where accurate online inventory is directly linked to the customer’s ability to purchase an item.

Some businesses even elect to have robots scanning up and down each aisle with RFID wands while the distribution centre is closed overnight – automating the nightly stocktake. This ensures that at the start of each daily cycle, inventory levels can be guaranteed and the business can maintain almost 100% inventory visibility at all times.

Automating scanning with RFID not only eliminates human error in stocktaking but also helps to easily recover lost or aged stock. Even non-inventory items can be tagged to provide asset tracking for valuable capital items.


Put Your Productivity on Fast Forward

Streamlined processes lead to a more productive workforce. RFID technology automates time-consuming tasks like cycle counts, receipting individual items, or scanning stock before it’s shipped. It also reduces picking errors, freeing up your workforce to focus on tasks that add value. Stock accuracy also means more efficient replenishment of picking locations – helping your team to better forecast empty locations and retrieve items from bulk storage early, reducing a picker-packer’s overall downtime. All of this adds up to getting orders out the door faster. Happy customers = mission accomplished!


Build a Data Powerhouse

Compared to barcodes, RFID tags can hold an extensive suite of information – everything from product descriptions to serial numbers, GS1 data, manufacturing information, and expiration dates. Basically they give each item a unique digital identity.

Having this information stored in a tag enhances the capability of your ERP system, and is particularly significant when your business (or markets you’re serving) prioritises supply chain transparency. RFID makes tracking products easier and enables you to make smarter business decisions. Real-world examples include easily identifying products that need to be discounted before they expire or adding value to your brand with product traceability programs – all made possible by that extra product information at your fingertips.


RFID is a game-changer for distribution centre teams and entire supply chains. This technology unlocks a treasure trove of data and efficiency gains: almost flawless accuracy boosted productivity, and powerful insights. As distribution centers juggle ever-growing complexity, RFID becomes a secret weapon to help your business improve its operational efficiency and drive superior customer experience in the competitive retail sector.

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