5 RFID Myths Debunked

Getting the facts straight on how RFID can benefit your business

RFID Technology Explained

RFID technology is a well known technology that can benefit a wide range of industries including healthcare, retail, manufacturing, distribution, food and beverage, and many more. As well, RFID provides several solutions for these industries such as supply chain visibility, inventory management, asset and equipment tracing, theft prevention, and personnel tracking.

Essentially, RFID technology is helpful to companies looking for an improved way of keeping track of important things. By applying an RFID tag to a piece of equipment, carton pallet, or personnel ID tag, the items and individuals can be tracked throughout a facility. Antennas are placed throughout the facility, and communicate with the tag as it moves around the facility. And, with the right RFID software, the items and individuals can be monitor on any phone, laptop, or tablet. Alternatively, RFID tagged inventory can be searched for and scanned with a handheld RFID reader. This is a helpful solution for looking for a specific item in a large warehouse with a lot of inventory.

How RFID Technology Works in Retail

RFID technology is often deployed in warehouses to improve outbound shipping speed. It is also a popular solution for monitoring the safety of lone workers, to track patients and expensive equipment in hospitals, and simplify inventory management processes on the sales floor at retail stores.

Despite RFID’s growing technology we often hear common misconceptions attached to the technology at trade shows and with clients.

Here are some of the major RFID myths debunked.

1. RFID Tags Can’t Scan Liquids or Metals

For a long time it was believed that RFID tags could not be applied to liquid items such as liquor or perfume bottles. This was due to the fact that the liquid could stifle the radio frequency of a reader, rendering the tag or unreachable.

This was true in the early 2000’s. However, advancements in tag technology has made it possible to use RFID on liquids. EPC Gen 2 tags were rolled out in the mid-2000’s. Developed by MIT, and standardized by GS1, Gen 2 tags are slightly thicker than standard RFID tags. This enhances the tags readability.

Within the Gen 2 tags is microstrip, antenna and a foil ground plate, with a plastic substrate that separates the foil from the antenna in the middle. The foil ground plate is a thin metal sheet that serves to isolate the antenna from any other metal or fluid that can lower the read range of RFID tags.

More retailers and manufacturers are using RFID technology more than ever before.

2. RFID isn’t Used by Retailers

In the early 2000’s Walmart was ready to go all in on RFID. in 2003, Walmart told its top 100 suppliers that they would be required to tag all inventory and pallets withing 2 years. The project never really went anywhere. For the next few years RFID was tagged (sorry for the pun!) with the label of being an unusable technology in the retail space.

For many retail brand owners, manufacturers, and distributors, RFID is seen as an added expense, not a benefit. So, they would only add RFID to their supply chain if retailers mandated them to do so. So, with no retailers adopting RFID, brands and manufacturers did the same.

Boy, did that change.

With the improvement in RFID reliability, and the explosion of e-commerce, RFID was enthusiastically brought back into the fold of retail. Many retailers have looked to RFID to improve supply chain efficiency as consumer demands changed and online sales grew. Major retailers such as Kohl’s, Target, and Macy’s have added RFID to their supply chain initiatives in big ways.

As well, brands like Adidas, Lululemon, Levi’s, and Barney’s have all chosen RFID as the technology of choice to deliver an improved omnichannel retail experience to their customers.

3. Deploying RFID Takes a Lot of Resources 

A common misconception for RFID is the cost. To deploy a robust RFID system, brands will need the right infrastructure. That includes tags for the inventory, antennas to talk to the tags, servers to maintain the data, and software to put it all together. Sounds like a lot, right? For many brands, the price for RFID tags is cost-prohibitive alone. Or, at least, that’s what they want you to think.

A well strategized RFID deployment can run lean. Very lean. With just a handful of employees armed with handheld RFID readers and ruggedized server, an RFID software application can increase a company’s supply chain visibility significantly. An increase in visibility means a decrease in shrink, lost inventory, shipping errors, and a big boost in output.

With a small investment in equipment, an RFID system can pay for the tags and software as soon as it’s installed.

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4. RFID Doesn’t Improve Inventory Accuracy

When implementing RFID into your business’ processes, how big of a boost in inventory accuracy should be expected? Some fast-talking RFID integration experts will tell you RFID can raise your inventory counts to 100%. But, when your RFID system is installed, it may barely crack 70%. Scenarios such as this can create the feeling that RFID isn’t as accurate as initially perceived.

With the understanding that many variables can affect an RFID program rollout (warehouse size, type of inventory, inventory amount packing processes, etc.), inventory accuracy for retailers and manufacturers are typically significant once RFID is fully integrated into the supply chain. According to GS1, retailers on average see inventory accuracy rise from 63% to 95%. Manufacturers can see an 80% improvement in shipping/picking accuracy, as well.

For many brands looking to integrate RFID into their supply chain, the biggest potential benefit is to get a better handle on it’s inventory accuracy. This can save millions by helping make better purchasing decisions, reduce losses, shrink, unnecessary chargebacks, picking and packing mistakes, outbound shipping errors, and even reduce the time it takes to run cycle counts.

Realistic expectations are important to maintain when rolling out an RFID pilot program. With that said, RFID tags can be read far quicker than barcodes. And RFID readers can get inventory counts 200 times faster than a barcode scanner. In other words, RFID is much faster than the old fashioned way of running inventory numbers.

5. RFID Only Helps with Inventory Management

When considering the value of RFID for a brand, inventory management isn’t the only benefit that can be reaped.

Brands in manufacturing can use RFID with WIP (work in process) inventory to spot bottle-necks. Or, track the location of expensive containers to ensure they can be reused instead of lost. Brands can even track the location and status of employees to ensure accountability and safety.

Conclusion

So, when it comes to RFID, don’t believe everything that you hear. RFID is an impressive technology that can be enjoyed by brands across many different industries. It can take patience, and some trial and error. But, the benefits can far outweigh the challenges.