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Choose an RFID Strategy Carefully

Radio Frequency Identification (RFID) has become the standard for supply chain optimization ““ but for all of its notoriety and adoption very few organizations use it as part of their strategy. This article by Becky Partida uses recent findings from APQC's Open Standards Benchmarking in Logistics which identified that 59% of organizations weren't using any sort of RFID strategy to optimize and streamline their supply chains. But the decision isn't as easy as simply deciding to integrate RFID strategy into your supply chain ““ you must also decide what kind of strategy would be most advantageous. Organizations that tag everything with RFID tend to deliver on time more often than others, whereas organizations that maintain separate inventories of tagged and non-tagged goods do better in warehousing costs: Organizations that maintain separate inventories of tagged and untagged items have the lowest median cost associated with operating warehousing ($2.67 per $1,000 in revenue), whereas organizations using a slap-and-ship strategy have the highest median cost ($11.41 per $1,000 in revenue). The higher costs obtained by organizations using a slap-and-ship tagging strategy may result from the extra labor needed to place and monitor tags on products destined for specific customers. The organizations would need to identify the products that need to be tagged and then have employees tag those items before the products could be shipped to customers. This means organizations must assess where they could use the most help, and determine a RFID strategy from there. The strategy that will make the most impact should work to strengthen the weakest elements of the organization and allow for maximum impact.

About Matthew Kabik

Matthew Kabik is the former Editor of Computer Aid’s Accelerating IT Success. He worked at Computer Aid, Inc. from 2008 to 2014 in the Harrisburg offices, where he was a copywriter, swordsman, social media consultant, and trainer before moving into editorial.

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