RFID: From Closed Systems to Improving Visibility in the Manufacturing Supply Chain

RFID: From Closed Systems to Improving Visibility in the Manufacturing Supply Chain

Antti Permala (VTT Technical Research Centre of Finland, Finland), Karri Rantasila (VTT Technical Research Centre of Finland, Finland) and Eetu Pilli-Sihvola (VTT Technical Research Centre of Finland, Finland)
Copyright: © 2012 |Pages: 11
DOI: 10.4018/jal.2012040102


In many industrial sectors, the use of RFID in closed systems is evolving. To be implemented in global supply chains, all aspects related to RFID need to be standardised. By collecting, processing and distributing information efficiently, organisations should be able to improve the efficiency of their transport logistics processes, lower their operational costs, and improve their portfolio of logistics services. This case study describes the current perspectives, challenges and benefits of RFID applications in manufacturing industry. Automated, remote and wireless identification is a basic element in implementing efficient management systems in the supply chain. The most important identification techniques are barcode and RFID. Barcode is currently the most widely used method for the identification of parcels, but RFID is more suitable for automated identification for many different reasons including better readability and enhanced environmental durability. By reducing manual work and errors, RFID generates cost savings, increased productivity and efficiency of processes. There is a wide range of different RFID technologies that have varying reading ranges, protocols and data contents. There are two different approaches to using RFID tags and numbering the items to be identified. Recent standardisation developments have started to resolve the interoperability problems in the field of RFID identification.
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Due to the complexity of modern logistics networks, the availability of up-to-date information plays a key role in improving efficiency (Yu, Yan, & Cheng, 2001; Nilsson & Waidringer, 2004). Automated identification (Auto-ID) is a vital part of fast and accurate information exchange in the supply chain, as it allows identification of physical goods in a timely, accurate, and cost-efficient manner.

The information gathered using an Auto-ID can be rapidly transmitted to an information system and shared with other parties of the chain. Furthermore, an Auto-ID system represents a major opportunity to introduce tracking and tracing solutions, improve process control and support inventory management. In some cases these may lead to a re-engineering of the supply chain and removing structural constraints that limit the performance of the chain (McFarlane & Sheffi, 2003).

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