RFID Technology: Revolutionizing Supply Chain Management

V S Sudhakar, Co-Founder & Executive Director, BigBasket.com

V S Sudhakar, Co-Founder & Executive Director, BigBasket.com

Enterprises today are increasingly using their supply chain to compete and gain market share. The industry is witnessing technology and process upgrades which clearly show that supply chain excellence is more widely accepted as an element of overall business strategy. However, being a complex and knowledge intensive process, management of supply chain involves several challenges. One of the biggest challenges that companies are facing is how to reduce their supply chain cost. In addition, the companies are pursuing new customers and trying to expand their distribution to emerging markets in order to grow revenues.

One of the ways to grow is to provide outstanding customer experience. In order to achieve that, an enterprise can either maximize or optimize its business.

The problem with maximizing is that it requires continuous funding. So, the best way out is to take a sensible approach which can deliver excellent customer experience and yet make business sense. This requires enterprises to build an optimized supply chain system which does not cost much and delivers phenomenal customer experience. One innovation which has risen to become a revolutionary element in supply chain management is RFID (Radio Frequency Identification) technology. RFID ensures that the right goods are available in the right place with no discrepancies and zero errors. It makes the supply chain considerably more precise and improves the efficiency and reliability of the entire chain.

If we take the example of FMCG industry, products have to be counted several times already in the manufacturing process. By utilizing RFID tags and readers, products can be counted in seconds. As RFID tags can be automatically scanned without being in the line-of-sight of an RFID scanner, multiple tags can be scanned simultaneously. For manufacturers this translates directly into cost reductions as labor intensive tasks can be carried out faster and more accurately. While distribution, there are two factors which matter most: speed and accuracy levels. RFID scan is a fast and accurate method which is cheaper. To prevent picking up of wrong item or sending a crate to the wrong hub, QC (Quality Control) is done. Once it is done the person just does one RFID scan to check if the items picked are correct or not. RFID speeds up the whole process of Distribution Center (DC) receiving the items.

Usage of RFID also ensures accurate inventory control. RFID is potentially the most powerful technology for managing inventory because of its ability to reduce the time it takes to perform inventory, thereby providing enterprises with real time visibility into the products on the shelves. Data gathered through real-time inventory is used not only to improve the customer experience and increase sales, but also to streamline operations and reduce overall costs. With such advantages, RFID proves itself to be worth the investment.