Smarter Inventory Management using RFID
Inventory Accuracy is More Important Than Ever
Global supply chain and logistics operations continue to evolve at an accelerated pace. From the rapid growth of e-commerce to the ever increasing customer demand for personalization and free next-day delivery, warehouses, distribution centers, and manufacturers are facing more pressure and competition than ever. Outpacing these changes requires a strategic approach , including keeping track of millions of SKUs with higher expectations of inventory accuracy, as even simple discrepancies could impact the bottom line.
Imagine a scenario where the online order fulfillment rate for a specific item has dropped drastically. The root cause is traced back to a discrepancy between the inventory on the books and the physical inventory in the warehouse, resulting in a stock-out. To compound the situation, this item is not being replenished from the supplier, and the end result is a both a lost sales opportunity as well as a major decline in customer satisfaction.
In fact, in a recent survey conducted by DC Velocity and the Warehousing Education and Research Council (WERC), “Inventory-count accuracy by location” jumped from number 10 to number 5 on the top 12 most commonly used DC metrics in 2019. This signifies a strong focus on ensuring the right item is available at the right quantity at the right time, and any mistakes are considered costly.
For manufacturers faced with increasing demands for Configure to Order (CTO) and production runs of quantity one, maintaining proper levels of raw material to support custom configurations is essential, which requires very accurate inventory counts. Both manufacturers and 3PLs also often provide Vendor Managed Inventory (VMI) services as part of their value-add, where product is consigned from a customer or supplier. For VMI, inventory accuracy is absolutely critical, because any discrepancies are considered the responsibility and liability of the manufacturer. Many customers want VMI counted on a regular basis so that their own books can be updated properly. Regardless of which type of inventory you stock, the industry’s most common method for keeping track of the inventory – barcodes – is still primarily a manual process which makes inventory counting time consuming and costly.
Though they are efficient and cheap to produce, barcodes have many drawbacks. They require employees to manually hand scan which is very expensive in terms of labor and, since barcodes are line of sight only, they must be aligned properly to effectively record the products IDs into your Warehouse Management System (WMS). If you use pallet racking or high-pile storage, you need to bring the material down to a scannable level or go up to the barcode yourself. This involves additional resources such as a forklift or reach truck driver. Once counted, the pallet must be put back before moving to the next count location. Since the manual counting steps take a significant amount of time and labor, many operations need to shut down and conduct counts in off hours, often using overtime pay when needed.
The Case for RFID Inventory Tracking
To meet the current demands being placed on distribution centers and manufacturers, many companies are turning to UHF RFID to help streamline their business and meet market demands. RFID allows associates to cycle count inventory without physically seeing a barcode, greatly improving efficiency since RFID scans can be done in seconds. RFID works off of RF energy while barcode uses light energy and, because of this, RFID has the ability to read through most non-metallic/fluid objects and at greater distances than barcodes. This greatly increases the inventory completeness by allowing inventory to be done on items that are still inside of a cardboard or plastic box while keeping it factory sealed or for items that are high on the shelf.
RFID also improves visibility of inventory by providing near real-time updates and faster scanning. With RFID readers placed on portals, doorways, or ceilings, you can determine exactly when and where material moves, but these static readers require infrastructure updates and changes. The standardized approach to cycle counting with RFID is to use a handheld reader or affix a reader to a forklift. In both cases, manual labor and equipment are still required.
Automating RFID Cycle Counts with Autonomous Mobile Robots (AMRs)
Fetch Robotics has designed a complete solution to automating RFID cycle counts, which combines powerful cloud-based software with an Autonomous Mobile Robot (AMR). Fetch Robotics’ TagSurveyor is an AMR that is affixed with a Gen 2 UHF reader and has the ability to navigate warehouses autonomously while capturing RFID tag data with no human intervention. TagSurveyor can be scheduled to conduct a full or partial count at any time of the day and even multiple times a day. It then streams all of the RFID data to our FetchCore software which provides RFID tag visualization and reporting in a simple user interface. In one pass on a TagSurveyor survey route, FetchCore can display the estimated location of all RFID tags on a warehouse map, while also identifying both unexpected and undetected tags. TagSurveyor and FetchCore make it easier for warehouses and factories to derive actionable insights to support key business decisions related to inventory. Think of it as a constant stream of cycle count and inventory location data that you can view live from anywhere. In this way, TagSurveyor augments your existing workforce by automating the manual counts, and enables human associates to manage the higher-level tasks like decision making, analyzing, and proactively addressing inventory discrepancies. The TagSurveyor solution is more consistent, accurate, and efficient than manual counts, and requires no facility downtime. Some of our customers see immediate ROI through the reduction of both direct and indirect labor required for wall-to-wall counts.
UHF RFID technology is becoming the standard technology for distribution centers and manufacturers to count and track their inventory. Next generation technology like TagSurveyor allows innovative companies to find, track, and count their inventory autonomously while improving inventory accuracy and reducing costs.
Want to find out how autonomous RFID inventory management with mobile robotics can transform your productivity?
Verify inventory counts multiple times a day with TagSurveyor
Learn more about how Framebridge uses RFID to track customer inventory
Read the IDC Spotlight report on how Cloud Robotics increases productivity