The Advantages of Radio-Frequency Identification (RFID) Chips in Supply Chains

Published On : 04/04/2024

By Joseph Schlossberg, Vice President of Global Sales – Sourcing Solutions International 

Imagine a cutting-edge technology that turns your packaging into a real-time inventory management system. Well, believe it or not, that technology already exists.

Radio-Frequency Identification (RFID) tracks inventory simply by adding a sticker, hangtag, or another simple identifier to your items. The good news is that recent advances are making the technology even better, which means RFID will be the wave of the future for a long time to come.

What is RFID?

Do you have a contactless credit card? Then you already use RFID. When you present your card to a reader, it sends out an electromagnetic wave that activates the card’s RFID system. The card emits a wave in response to the reader with your financial information.

Contactless cards are one example of a “passive RFID” system. In active RFID systems, the tags have some kind of power source — such as a battery — that allows them to send signals to readers. There are also semi-passive RFID tags that use battery power for circuitry, but rely on the reader’s power to communicate.

Lower RFID frequencies sometimes only have an effective range of a few inches. For the most powerful, higher RFID frequencies used for inventory purposes, however, the range can be more than 300 feet.

Just like contactless credit cards make payment faster and easier than ever, RFID makes inventory management faster and easier than ever.

RFID enables transparent real-time inventory

Previously, employees needed to find barcodes on boxes and scan them to get an accurate picture of their contents. Sometimes this meant taking stacks down or otherwise moving stock around — a time-consuming and labor-intensive process.

With RFID, however, all someone has to do is walk past the general area with a handheld device. It automatically communicates with the RFID stickers, feeding information about the contents of the containers directly to you. There’s no searching, no picking things up, and no moving them around.

As a result, keeping your inventory up to date has never been simpler. Workers need only a fraction of the time to complete it. Since there’s also less room for human error, the result is not only increased efficiency and productivity, but also accuracy and reliability.

This holds true for every stage of the supply chain — RFID makes your inventory visible and transparent en-route, as well as in warehouses or on the retail floor.

RFID means transparent real-time inventory

Speaking of retail merchandise, RFID can handle sales without cashiers and Point-of-Sale (POS) systems, as Amazon Fresh shops demonstrate. All customers need to do is scan an app on their smartphones as they enter the store, select the products they want, and leave. They no longer need to wait in line and pay at a register. The system simply charges the balance to their Amazon account.

If the customer changes their mind and puts the item back, no problem. The system automatically removes the charge and recalculates the bill. Indeed, some companies are gleaning insights from patterns of customers’ interactions with specific items in their stores.

Meanwhile, RFID can also combine with other technology to deter shoplifting. If an item leaves the premises without its chip being deactivated, the system can automatically set off a siren. For these reasons, other large retailers like Zara and American Eagle are experimenting with the possibilities of RFID for self-checkout and inventory control.

Implementing RFID

Current RFID chips usually come in the form of a sticker that businesses attach to their packaging, such as belly bands or header cards. Each only costs around $0.04 to $0.05. Other brands/retailers might decide to use a separate hangtag

Some companies are developing RFID options that will be even cheaper. For instance, next-generation solutions will be incorporated right into the packaging itself, eliminating the need to purchase RFID stickers.

An added benefit to this new design is that fewer packaging materials will be produced. Since the antenna or inlay is integrated directly into the main packaging, separate RFID stickers no longer need to be fabricated. This means fewer resources will be consumed, and less trash will be thrown into landfills.

Work smarter, not harder, with RFID

RFID packaging technology promises to transform every link of the supply chain. RFID is fast, efficient, accurate, precise, and delivers key data in real time. There’s no better way to monitor and track stock from its manufacturers through distributors, all the way to retailers worldwide. That’s why major retailers like Walmart, Dillard’s, and Nordstrom are starting to mandate the use of this innovative technology, and more companies join their ranks every year.

Work smarter, not harder — consider getting ahead of the curve and incorporating RFID in your operations today.

— Joseph Schlossberg is Vice President of Global Sales at Sourcing Solutions International (SSI), a one-of-a-kind supplier that manufactures hangers, packaging, and RFID solutions for the apparel and retail industries.

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.