RFID and Business Processes

RFID is expected to dramatically improve many different business processes including Supply Chain Management (SCM), Customer Relationship Management (CRM), Manufacturing Resource Planning (MRP), and Enterprise Resource Planning (ERP).

The benefits to SCM are expected to be enormous.  By way of example, a study conducted at the University of Florida in 2001 found that $5.8 billion (US) was worth of inventory was lost due to administration errors.  The use of RFID for tracking the movements of inventory can easily save hundreds of millions or even billions of dollars.

In general, RFID can be used to improve supply chain integrity, reduce labor costs, provide greater inventory/merchandise visibility, reduce material/product loss, promote vendor-managed inventory control, virtually eliminate the need for physical inventory management, and ensure product authenticity.

In a manufacturing environment, RFID can be used to improve:

• Management of inventory and materials
• Timing and control of critical resources
• Improve Warehouse Management Systems (WMS)

Manufacturing and warehousing processes improved include shipping and receiving, put away processes, picking processes, zone tracking, yard management, and lot tracking.

In a retail environment, RFID can be used to improve:

• Merchandise inventory and ordering processes
• Customer Relationship Management (CRM)
• Merchandise tracking and fraud prevention

While people typically think of only the front-end portion of a RFID system such as tags and readers, the back-end processing systems are critical to fully realize the benefits of RFID.  Front-end RFID sub-systems can capture and report an enormous amount of data.  Back-end subsystems must process the data and manage it in a way that it becomes useful information.  Back-end RFID sub-systems must manage the interface to and communications with various consuming applications and processes such as inventory management and tracking, ordering, shipping and receiving.