Automated Data Capture and Real Time Tracking has been a major bottleneck

affecting the ability of organization to optimise their investment in their Supply Chain
Operations.
RFID has the potential to help retailers to identify right product at right place at right
point of time, thus maximising sales and profitability.
Radio frequency identification is a form of wireless communication that uses radio waves
to identify and track objects. RFID takes the barcoding concept and digitizes it for the modern
world providing the ability to:

Identify an individual item uniquely

Identify items not in direct line-of-sight

Identify multiple items simultaneously

Identify items within a range of few centimeters to several meters.

The Electronic Product Code (EPC) is a specific term for an entire system that is
planned for companies to effectively track,capture and manage assets. RFID is just a
carrier technology that best fits under the umbrella of automatic identification. This
new identification system has the characteristics of interoperability,versatility and
open standards backed by EPC Global, a partnership of the Uniform Code Council
and European Article Numbering International (EAN).
RF Tags The Hardware components that carry data about the item, including the
EPC. The microchip in the tag can store information from 64 bit to as much as 8 MB
which means that the tag can carry some important information such as shipping
history, order number, customer information, company/staff information and serial
number .There are many classes of tags that scale in functionality and cost. Passive
tags are less costly, derive their power from the readers magnetic field and generally
have short read ranges. Active tags have their own power source, longer read
ranges and are generally much more expensive than passive tags.

One of the early adopters of RFID Technology is Wal-Mart, one of the largest
American organizations that runs a chain of large discount department stores and a
chain of membership required warehouse stores. The company extended its existing
edge and saw RFID as a way to reduce the cost of handling goods. According to the
analysis of the University of Arkansas, Wal-Mart succeeded in adopting the RFID
technology and reduced out- of-stocks by 16%. Out-of-stock items with RFID were
replenished three times faster than items using standard barcode technology.
Therefore, a firm who adopts the RFID technology saves billions of dollars and
reduces the cost of its supply chain operations and can translate these savings into
increased profit margins at the Point Of Sale.
During supply chain processes, several data such as which products use which
partsor who assembles the product in what timecan be stored in database
management systems. Therefore, products in which related parts are used can be
automatically determined and applied to necessary operations.
RFID systems give an opportunity to create a database with data on customer
needs. By the use of RFID, information in database systems is updated and correct
information that is necessary for reporting and analysis is obtained on time.
RFID has many potential activities such as billing and delivering products, physical
stock and identity account tracking. Information/data is easily accessed and updated
dynamically in real-time, stocks are tracked and controlled, and storehouse and
selling control can be done.
Products that are taken from stock or that have remained in stock can be monitored
with their costs and efficient stock management can be done.
By using RFID data (e.g, EPC), correct information is obtained from the production
line and used in different stages of the supply chain without human intervention. The
products are directed to a definite route automatically and defective products are
also prevented in the production line.
Some critical processes during business operations such as stock management,
item tracking/monitoring, transportation, delivery, device management, and software
update are planned automatically.
Benefits from RFID
RFID enablement is beneficial to whom will depend upon the applications and the
trading partner relationships. The outlook for manufacturers is other than that of
retailers. Proponents of RFID state that manufacturers can benefit primarily from:
Providing more volume and revenue to manufacturers hence reducing Retail Stock
Outs
Improved asset visibility, asset utilization and working capital efficiency.
Real-time decision like routing, sorting, recalls, etc.
Efficient Product returns management
Counterfeit prevention

Retailers faces more immediate benefits when a critical mass of RFID tags are in
place. Such benefits include:
Decreased inventory to an extent of 5% of total inventory
Reduced labor costs in stores and warehouses, as much as 7.5% has
been estimated
Stock-outs is reduced to as high as 7% of revenues.
Reduced theft instances thereby reducing shrinkages -- this is a multi-billion dollar
issue
Increase in inventory accuracy
Automated replenishment of Stocks
Counterfeit prevention