by Kumar Singh, Research Director, Automation & Analytics, Supply Chain Management, SAPinsider
RFID- a mature technology with wide applications in supply chain
New digital tools and technologies on the horizon bring many promises. The hype for many of these emerging technologies is well deserved. However, before you embark on a mission to embrace an emerging technology, you need to introspect whether you have already leveraged some technologies that are mature, to their full potential in your supply chain ? One such technology is RFID. The article assumes that readers are familiar with what RFID technology is and how it works. The teachnology has been leveraged in supply chains for decades now and is considered a mature technology. For organizations that were able to leverage its full potential, the value it generated was immense. To give you a sense of its applications, the illustration below shows the areas where RFID is being leveraged or can be leveraged across a supply chain. And if you are thinking that these are too many opportunities, this list is not even exhaustive.
Illustration I : Applications of RFID across the supply chain
A common perception I see around me is that RFID technology has delivered the value it was supposed to and now is the time to leverage other emerging technologies to replace RFID. The illustration below compares Gartner’s hype cycle for RFID with that of IoT. It indicates that the plateau of productivity has been reached as far as RFID technology goes, which is correct, but only if we view and leverage these two technologies separately from each other. So if you consider RFID technology on its own, it has probably reached its plateau of productivity but the beauty of technology and algorithms is that you are limited only by your imagination and intuition.
Illustration II : Hype cycle data source : Publicly available data from Gartner
My perspective is that RFID technology was never harnessed to its full potential and a part of that aspect was that we were limited by technology. If you look at Illustration I, you will realize that many organizations are actually not leveraging RFID across their supply chain yet, despite the technology being decades old. Why that is the case and how they can improve, in itself can be a very exhaustive topic, and is not the focus of this article.The focus of this article is to explore the hypothesis that RFID technology, in conjunction with new technologies, like IoT, has the capability to generate much more value in the world of supply chain, than it has generated so far.
Combining RFID with the power of IoT
When you combine RFID technology with smart sensors integrated with IoT infrastructure in warehouses, opportunities abound. Traditionally, RFID has been an amazing tool for inventory management but now leveraging more recent and advanced RFID technologies like photovoltaic powered RFID tags, RFID 2.0 UHF and IDAct ,you can leverage the power of RFID beyond the vanilla tracking it is primarily being used currently. IoT, in my opinion, has the capability to rejuvenate RFID ,rather than dimish its value. But for that we need to diminish our obsession with focusing solely on technology and take a step back to understand what are the opportunities to combine these technologies, and some additional technologies available today to design innovative solutions. Based on my understanding, the opportunities are many. And as interoperability betwen IoT and RFID increases, so will the opportunities to build solutions that combine these two teachnologies.
But rather than wait for the interoperability to mature (which definitely will), you should start envisioning solutions now, so that you have a headstart. And there are so many areas within the supply chain that you can explore. A very good example is collecting data for warehouse flow optimization. RFID has been a go to technology solution for inventory tracking within the four walls of a warehouse. With IoT , we have the opportunity to track elements (like storage conditions) in a warehouse in a way that we could not few years ago. And now, the infrastructure is already available to combine these two technologies. RFID tag readers can also be embedded on smart sensors. New generation of RFID tags, new generation of tag readers, ability to read tags from mobiles, IoT devices with capability to read RFID tags and transmit that data in near real time- all this is like music to the ears of those who love exploring the beauty of technology to collect data that has not been collected in a specific fashion before. That data, combined with worker tags and other sensors in the warehouses, provides you a dataset with data points which are priceless. You can evolve beyond simulations based on generic distributions and develop warehouse flow models that provides you the level of precision that has not been available before. This is just one example and the opportunities are many . We are constrained only by our conventional approach of thinking about technologies, algorithms and functions in silos.
Kumar Singh, Research Director, Automation & Analytics can be reached at email@example.com