Asset tracking and inventory management are the key uses of RFID for warehouses. RFID technology is proven to bring robust ROI. Let’s look at the key ways RFID is proven to provide almost 100% accuracy and safeguard valuable assets.
1. Save time
RFID technology is not cheap. The first question most people have is: will implementing RFID bring me a positive ROI? Recent studies say yes. In 2018, GS1 UK released a report authored by Professor Adrian Beck of the University of Leicester on an RFID trial from 10 major retailers. Together, they have combined yearly sales of €94 billion and use at least 1.87 billion tags per year. Every single one of these companies reported a positive ROI from their trials.
2018 GS1 RFID Study
A major driver of ROI is labor savings. According to Inbound Logistics, labour accounts for 65% of most warehouses’ operating budgets. Labour savings from RFID can quickly pay for the setup cost. The study from GS1 found that one company had savings equivalent to 4% of store staffing costs.
Lightning Fast Stocktaking
The reason for staff savings is the dramatic improvement is ultra fast read rates. According to software company Cybra, RFID improves read rates range from 200 items per hour to up to 12,000 items per hour. U.S. retailer Walmart trialed RFID in 12 stores and compared the results with 12 stores using barcoding for inventory. Scanning a 10,000-item inventory with barcoding took 53 hours – with RFID, it took just 2 hours. This meant a real-life read rate of 4,767 items per hour for RFID compared to 209 items for barcoding, a 96% reduction in counting time.
Does RFID produce a positive ROI? The results speak for themselves.
2. Improve accuracy
Inaccurate and out of date inventory results in losses through shrinkage and going out of stock of necessary items. RFID has been proven to dramatically increase the accuracy of inventory management by enabling more frequent stock counts and eliminating human error such as missing barcodes or double scanning.
The study by Professor Adrian Beck found that inventory accuracy was dramatically improved. For one company with 1.5 billion products, they found only 20 errors with tags. This represents an error rate of 0.003% compared to a 1.5% error rate with barcodes. This increased accuracy led to a 15% reduction in losses from shrinkage for one company.
Inventory accuracy is a priority, and nothing brings better results than RFID.
3. Locate items
Modern warehouses often occupy hundreds of thousands of square feet and contain thousands or millions of items in stock. Finding the right shipment at the right time can be extremely difficult. Attaching RFID tags to assets, pallets or products enables you to use a Real Time Location System (RTLS) to quickly and easily find any product or asset. Zebra RFID readers enable the use of the Zebra Motionworks RTLS solution. With RTLS, you have greater visibility of your inventory and can quickly locate any item needed, maximizing efficiency and reducing losses. One study of click-and-collect systems found a huge improvement in the time taken to retrieve orders.
Metal and liquid filled containers pose a problem when implementing an RFID system because they interfere with the radio waves. It’s important to take this into account when adopting an RFID system, and to get the proper readers and tags to be function in your environment.
metal and liquid
Now that you’ve seen how RFID can benefit your business, look closer at the specific applications, starting with asset management.