Optimization of Logistics System – RFID

Optimization of logistics system operation using RFID technology

After the revolutionary impact that the bar code technology brought decades ago to manufacturing and service industries, which helped with accurate data handling and product identification, the RFID technology was identified as the next big impact technology to be deployed across the supply chains of diverse industries.

One of the solutions proposed to implement real time quality monitoring of materials and products flowing downstream the supply chain is the use of Radio Frequency Identification (RFID)and Wireless Sensor Networks (WSN) technologies which, when integrated together, can provide the following advantages:

•Increased transportation control by having adequate information about the transportation conditions.

•Reduced costs related to late delivery, such as out of stock costs, lost sales costs, and penalties imposed by customers.

•Increased agility and responsiveness in face of disturbances related to the spoilage of materials and products during transportation with the added benefit of reduced orders fulfillment disruption.

•Significantly reduced delivery of unacceptable quality materials and products to customers, which protects the organizations public image.

In today’s business environment, RFID systems are deployed in automotive, logistics, pharmaceuticals, security, and banking industries, among others. The potential advantages of RFID–WSN integration are viewed as incentives by many of those industries to implement one of the above listed integration architectures and benefit from improved business processes and supply chain operations. IBM mentions that many analysts estimate that the United States retail industry loses approximately $30 billion annually due to products not being on the shelf when needed.

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