Use of RFID in Warehouse Management

RFID in warehouse management is a modern warehouse management solution applied by many businesses. RFID technology helps businesses manage all parts of the finished product supply chain. In this article, Viindoo summarizes detailed information about this technology and suggests some methods for effective application in businesses.

>>>> See more: Inventory tracking software

What is RFID in warehouse management?

RFID (Radio Frequency Identification) technology supports modern warehouse management, thus, the management process can be automated, fast, and effective.

An RFID system has two main components: 

  • RFID tag 
  • RFID Reader: Module that reads and processes data of RFID tags

RFID helps effectively track and manage components in the warehouse. In particular, the technology allows businesses to control the location and quantity of inventory, the status of imports and exports, etc. Therefore, this effective warehouse management technology greatly optimizes operational efficiency and saves more management costs for businesses.

This technology significantly contributes to the goal achievement of businesses. This is thanks to RFID effectively supporting inventory management and integrating with the ERP system to better track finished products, warehouses, customers, etc.

RFID technology in warehouse management

RFID technology in warehouse management

>>>> Learn More: ERP system

Benefits of RFID in warehouse management

The use of RFID in warehouse management brings businesses many benefits, specifically:

  • Control inventory: This leads to less redundancy and smooth operations. 
  • Manage warehouse: This cuts down labor costs.
  • Limit errors: Minimizing unwanted errors when entering orders helps improve employee productivity.
  • Access system to track order database: This ensures delivery quality, the right destination, and on-time shipment.
  • Track order information and conditions of goods: This helps to limit disputes or conflicts between businesses and customers.
RFID system generates great benefits

RFID system generates great benefits

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Practical application of RFID technology

For warehousing

RFID technology in warehouse management is widely used to manage the warehousing process closely. An RFID reader is installed before goods go to the warehouse. The reader will read the RFID tags of the product before warehousing. 

All collected data is stored directly on the server for quantity checks and making receipts. Products should be strictly managed via RFID tags attached directly to the products.

RFID technology applied in warehousing

RFID technology applied in warehousing 

For exporting

RFID performs controlling and inputting data into warehouse management software. These data are important for goods export checking.  

The system automatically alarms for any detected deviation. Conversely, there are immediate allowances for export when all information is correct.

For finding and locating products

Locating goods in the warehouse is an issue for any business, especially retail businesses. However, finding and locating items using traditional warehouse management methods is time-consuming. 

The use of RFID in warehouse management can help save more time searching for products, improve operational productivity, and increase customer confidence.

RFID technology helps find and locate goods

RFID technology helps find and locate goods

For counting goods

RFID in warehouse management allows businesses to effectively perform the stock count. RFID tags used for inventory are scanned during processing, ensuring accuracy and eliminating unnecessary errors.

For delivering

RFID tags attached to each item are scanned as export from the warehouse to ensure the right quantity. Wrong items as scanned will not be allowed to leave the warehouse. There is also information on exported goods in the system. As a result, disputes or claims for returns due to deviations will decrease.

How is the RFID different from the traditional one?

Warehouse management applying RFID is different from the traditional way.

StageRFID Technology in Warehouse Management 
Traditional Warehouse Management
Stock countRFID helps effectively track stocks, saving time up to 50% compared to traditional management methods.
The manual process leads to low productivity and high deviation.
The location of items is well-managed. This supports effective import/export of goods and reduces delay by up to 5%.
The management of goods in and out is based on the employees’ working experience. Poor performance and error can occur.
Area of use
RFID technology helps manage storage, thereby utilizing area of use and cutting costs by 11-18%.
Manual warehouse management requires more cost for labor.
Inventory management
Inventory is optimized.
Labor costs are high while inventory control still faces difficulties.
Storage location management
RFID collects data for faster searching of storage locations.
Manual search is time-consuming and labor-intensive.

Disadvantages of RFID in warehouse management

Besides the advantages, the use of RFID in warehouse management has also some disadvantages that businesses need to consider. Specifically:

  • Disallow using phones as a scanner: This is a disadvantage compared to traditional barcodes. Users need RFID readers to process work.
  • High Cost: Having existed since the 1970s, the technology is still unpopular because of its high cost. Currently, the cost of deploying RFID has decreased, but RFID cards and RFID readers cost an arm and a leg.
  • High infrastructure requirements: RFID requires readers, tags, management systems, networking, and wiring. Businesses need to spend time and resources to set up RFID. In some cases, they may need to update their entire inventory management system because some software platforms do not support RFID.
  • Security Issues: Although the RFID system is frequently updated and improved, it can still be hacked and the data in the RFID tag can be copied by remote devices.

RFID in warehouse management is a good technology solution for businesses. Business leaders can consider and weigh the benefits and disadvantages of this system to consider its suitability for use. Follow Viindoo for more information on effective business management solutions.

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Use of RFID in Warehouse Management
Jun Nguyen January 18, 2023