June 5th, 2017

A Seat at the Table

Despite its many talents, RFID has never really had a seat at the logistics table. But with an increasing desire for transparency, will the qualities of the technology finally be realised? Alex Leonards reports.

RFID is considered a mature technology by some, including Uwe Henning, chief executive of real-time analytics company Detego. Henning considers the technology to be well-developed and used in closed loop applications like asset tracking and automotive logistics.

But last year Detego, which specialises in providing transparency for the fashion industry, finally saw RFID finding its feet in the fashion retail supply chain. Detego’s growth is chiefly coming from this sector.

“In retail smart shelves, RFID ceiling readers, interactive displays and digital fitting rooms are starting to move beyond the drawing-board as retailers acknowledge the benefits of improved customer service and more revenues from near hundred per cent inventory accuracy,” says Henning.

SML RFID has also seen a steady implementation of RFID within the market over the last year.

“In the retail apparel sector in particular we are seeing significant uptick in adoption of the technology,” says Dean Frew, CTO & SVP RFID Solutions at SML Group. “I believe this is partly because we have seen proven business cases from brands such as Tesco and Herman Kay who are leading the way in RFID adoption.”

Implementation of RFID in the fashion retail supply chain has been prompted by retailers and third party logistics providers having to manage ever-growing global value chains. As well as expanding supply chains, advances in technologies like RFID and rising consumer demand for shorter delivery times is driving the need for heightened visibility.

Almost all retailers and their logistics partners now want real-time knowledge of where their goods are located in their national, international and global supply chains. In turn, Internet of Things (IOT) projects are being used more so than ever before. While it sluggishly rolled along in the past, RFID can now directly address this demand for better visibility and transparency across the supply chains of a number of industries.

“Besides the tracking of assets, like containers, the real-time knowledge of what is going on with each individual item and where that’s happening is on the rise,” adds Henning. “It’s clear that this event tracking and using real-time analytics in SCM only really works with technology that’s fully automated, without the need for a human using a scanner.

“RFID delivers exactly this real-time, automated event reading.”

According to Howard Forryan, product market specialist at Harting, the German manufacturer of RFID transponders, the technology has been persistently evolving over the past couple of years. He says that with recent developments in the passive Ultra High Frequency (UHF) performance area, RFID is now accepted as a technology that can bring both technical and commercially viable improvements to a warehouse’s logistic management operations.

“With the advent of Industry 4.0 and its potential implementation across all areas of manufacturing and the support supply chain, RFID will play a key role in bring these environments together in real time under the umbrella term of “manufacturing logistics,” says Forryan.

He believes that both barcodes and RFID have a place in today’s markets, while RFID is likely to becoming increasingly popular in the future.

“In terms of supply chain and logistics applications, RFID is not mainstream compared to barcode but is often used in situations where line of sight is not viable, or for rapid and secure data capture on large volumes of items contained on pallets or trays,” says Jonathan Bellwood, founder and chief executive of Peoplevox, the e-commerce specific warehouse management software company. “However, RFID as a whole is a valid technology solution in many other areas.

“It is widely used in a variety of applications from manufacturing to hotel room access management systems, for reading ski lift passes, not to mention Oyster Cards.”

Bellwood points out that from a productivity and accuracy perspective, RFID technology allows the collection of more data in one swipe compared to barcodes. “However, the higher cost of RFID systems compared to barcode means the latter is more commonly used in the supply chain,” he says.

Although RFID is able to improve speed for stock takes with tags applied at the source and right the way through the supply chain, not many businesses apply this across the supply chain.

“…few organisations do this from end to end,” says Bellwood. “Overall, the cost/benefit ratio of RFID within the supply chain prohibits its widespread usage.”

Detego’s Henning says that people working in the retail industry have lots of doubts about implementing classic handheld readers, because they still look like bricks.

“People now expect a smartphone type device, but clearly the traditional techniques spearheaded by the AutoID industry still seem to prevail,” he says. “As soon as one of the big tech players like Google enters the marketplace, we’ll see an exciting change here.”

Frew says that like any other disruptive and transformative technology, RFID provides a new and significant opportunity to transform the industry inwards out.

“However, this type of change is often met with various levels of scepticism and resistance,” he says. “We are seeing organisations that are aware of their current inventory accuracy challenges and want to move to fix this.

“Right now RFID is the only answer and the solution requires placing RFID tags on the product at source and then implementing a solution that supports the process in store.”

For now it seems that RFID technology remains a few paces behind where the market would like it to be. But its growing place in the fashion supply chain gives us a glimpse of where it could be in the next couple of years for retail and beyond.

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