RFID FAQ

RFID and Carriers

Radio Frequency Identification is a technology that will revolutionize the supply chain benefiting all parts of the distribution chain, the manufacturer, supplier, shipper, consumer and finally the carrier. The implications of RFID when applied to certain business structures results in increased efficiencies and more effective distribution chains in areas including inventory control, asset tracking and asset utilization, documentation flow, loading and off loading, and finally, customer service.

Although all segments of the supply chain have the ability to take advantage of the results and cost savings that are attached to RFID technology. Hesitance towards the technology due to the high monetary value attached to it results in an increased risk factor that not all stakeholders are willing to endure. However, as the technology becomes more mainstream in Supply Chain one stakeholder appears to benefit overall with everything to gain and nothing to loose: Third Party Logistics/Carriers. Due to the minimal investment carriers are required to make into RFID the gains they receive and time and cost savings they experience are substantial.

RFID impacts the carrier industry on many levels including asset management, loading and offloading and transportation route optimization just to name a few.

Asset Management

Carriers are able to benefit greatly from RFID technology through the tracking of capital equipment and other fixed assets including pallets, vehicles, trailers, etc. Attaching an RFID tag to the equipment allows carriers to locate the material when needed as opposed to manually searching which are timely and less accurate. RFID tagging reduces the number of lost assets as well allows for increased utilization of existing assets therefore reducing the number of fixed assets on hand and decreasing the capital required to purchase new allowing them to be more resourceful.

Loading/ Offloading and Load Optimization

With RFID tags attached to inventory that is being loaded and offloaded at the site allows for automatic recording of what has been loaded and what has been dropped off as well as what still needs to load. The traditional system used by most carriers; Serial Shipping Container Code (SSCC) is able to be programmed into the RFID tags increasing receiving times and allowing carriers to skip the receiving process all together through automatic documentation. Also, RFID tags have the ability to program the weight attached to the good being loaded. Carrier workers are aware of the weight requirements such as how much and what items are currently in the truck, the maximum capacity of the truck and what items are still able to fit in the truck. Therefore, the carriers are able to optimize each truckload decreasing the number of repeat visits.

Route Optimization

With RFID technology one is able to track the exact whereabouts of their product and their carriers as it travels through the distribution chain. From a carriers perspective this proves to be very beneficial as the RFID tags can be encoded to alarm if among their travels they journey off route, into unauthorized areas, as well as if the truck has been removed from storage without approval. This decreases the number of vehicles stolen and inventory lost as well as decreases travel time of carriers having to repeat visits or finding the correct address to match the item being shipped.

These are only a few of many ways that carriers can benefit through the implementation of RFID technology.

Virgin Atlantic Air

As can be seen the benefits of RFID for carriers is endless. One example of a huge carrier that has chosen to implement multiple aspects of RFID is Virgin Air . Richard Branson of Virgin Enterprises in hopes of increasing the efficiency of his airline Virgin Atlantic Air, implemented RFID by placing tags onto container bins that contained airline parts in Heathrow's airport. In the beginning the tags were used to track airline parts within the warehouse however after benefits of the system were evident, within six months every item on a Virgin Atlantic plane was tagged with RFID devices. RFID allowed for Virgin to keep its planes in the air longer as they are able to see all the planes assets and better utilizing them, knowing how much longer the plane is able to fly without restocking food, re-fueling, changing the oil etc. Virgin now has full control of their operations and with RFID technology they have extended the life of an important capital asset; their air planes.

Graeme Wearden. ZDNet UK News: RFID Keeps Virgin in the Air. (21, February 2006) Viewed: June 20, 2006.

Intermec International Inc: Supply Chain RFID: How It Works and Why It Pays. Intermec. Viewed: 20, June 2006.

Rebecca Angeles. RFID Technologies: Supply-Chain Applications and Implementation Issues. (Winter 2005). Viewed: June 20, 2006.