ID will save company money in future “Radio-frequency identification (RFID) is the wireless non-contact use of radio-frequency electromagnetic fields to transfer data, for the purposes of automatically identifying and tracking tags attached to objects. ”1 As a result, it is an extremely powerful way in examining the situation or the existence of certain objects because the RFID signals emitted by the tags could be caught easily with monitoring or detecting devices. Without doubt, this technology will provide many benefits in all areas compared to the traditional way of manual inspection.
In this topic, I will particularly discuss the potential advantages and applications of RFID in cost saving for commercial purpose. One important benefit of RFID could be found in the manufacturing company, majorly in their inventory management and production process in assembly lines. The more products and inventory a company has, or the longer and more complicated its production process, the larger benefits could be found by the introduction of RFID technology, since manual examination will become more costly and difficult in such situations.
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By attaching the RFID tags to each inventory, the company can monitor the number of units in inventory easily and accurately. And RFID also has a potential application of detecting theft behavior, as the missing inventory from the warehouse will lose its signal to the terminals and alarms can be triggered if such behaviors are detected. Therefore, company can save itself with the labor costs of maintaining inventory and the potential loss of theft, and therefore the insurance costs. The RFID technology can also find its role in the assembly lines.
Tags can be attached to each part that goes into the manufacturing process and report the status of the parts. If there are any errors in the process that causing missing or flaw parts, the tags will be emitting abnormal signals and we can immediately catch where and when the error occur. This will be very valuable to the company as it saves the expensive costs of manual inspection. Also, it quickly identifies the problem and minimizes the potential losses from ceased production and the resulted revenue losses. Not just the manufacturing company, RFID may also be very useful in retail industries.
Large retailers such as Wal-Mart and Target will have a huge amount of inventories and commodities. It becomes difficult for these companies to have an accurate estimate of their inventories and identify popular products that might be out-of-stock. According to a recent study, failure to provide out-of-stock products will result in high revenue losses because only 50% of the customers will choose competing brands instead. RFID seems to be a plausible solution to this problem. With the RFID implemented to each product, the retailer can easily catch the popularity of products and whether any of them are out-of-stock.
Therefore, the retailer will determine the shelf strategy in which how many units are needed for each product. This will generate a competitive edge for the retailer as it is more likely to have the products customers actually want and save a lot of costs with over-stocked products. RFID is such a powerful technology that many usages still need to be uncovered. It might be very helpful in tracking the customer behavior and therefore adds a lot of value for marketing purposes. Still, privacy issues is the primary concern of this technology but I believe the merits definitely outweighs the demerits.