Over a long history that began during World War II, radio frequency identification (RFID) technology has gone through several phases of development, offering great expectations of efficiencies and productivity gains in various arenas of business. (For a description of how the technology works see our reprint of "A game of tags" by MM&D Magazine's Emily Atkins.)
Interest in the technology for supply chain applications peaked around 2005 when retail giant Wal-Mart made it mandatory for many of its suppliers to ship inbound product with RFID tags.
When pallets, cases or individual products have RFID tags applied, they can be easily scanned and verified all at once, eliminating a lot of the traditional labour involved in inventory control and inbound shipping operations.
Tagging product for inventory control and tracking makes a lot of sense in some industries. Fashion, for example, with its multiple SKUS and fast-moving turns thanks to e-commerce and social media, is making good use of the technology with item-level tagging helping to reduce costly stock-outs, and allowing for predictive analysis.
But while hopes were high at the time of the Wal-Mart mandate, and many envisioned a supply chain where RFID would become a ubiquitous technology, it does have limitations.
For example, while there are many yard management offerings available that rely on RFID sensing, the technology may require some refinement before it gains full acceptance.
The unique features of a large yard operation include a great number of containers and chassis spread over a relatively large physical area that need to be tracked and located quickly and efficiently to maintain productive supply chain operations.
To use RFID in this scenario, each trailer needs to be tagged. And each of those tags must be active to be effective.
In principle, using RFID to locate trailers in this scenario makes sense: The larger the yard, the more difficult it is to ensure that incoming trailers are placed where they are supposed to be. Having an active tag on each unit means they can be easily found when they are needed at the dock door.
But some supply chain operations managers who need to keep track of trailers in a yard have reservations about RFID. In their experience an RFID system can actually create more work and reduce efficiency.
Here are just a few of the pitfalls to watch out for:
The tags themselves may not be designed for the equipment they are being placed on, resulting in poor placement that limits readability.
They can die quite unexpectedly.
Every time a trailer enters the yard the tag must be linked with it, creating more work that needs to be done promptly and accurately if the system is to create efficiencies.
The tags also have to be removed from the trailers when they leave the yard, and this step is frequently forgotten resulting in the complete loss of an asset that may be worth up to $100.
This is not to say that RFID cannot be successfully used to manage equipment in a yard. In fact, many of these limitations are eliminated when the yard sees only its company's own fleet. In this case trailers can be permanently tagged and identified, reducing exposure to a number of the risks mentioned above.
Analyze your operation
In our experience it's fair to say that no one system can provide 100 percent accuracy. Many operations managers can apply the rigor needed to run an efficient yard without the help of RFID tracking. With good management, proper organization and a system that is set up correctly, you’ll achieve the desired visibility and productivity.
The key is to understand your operation, and analyze where a technological solution might give you an efficiency boost that cannot be achieved through more effective process management. Once you have that perspective, then it's time to decide whether RFID might be that technology.
For more information on the subject, we invite you to download of "A game of tags". A very interesting and informative article by Emily Atkins at MM&D who looks at the promise and perils of RFID over the past 10 years.