RFID and supply chain management: this amazing chip will change the world.

• Author: Stong-Michas, Jennifer

Supply chain management (SCM) continues to drive and enhance business, especially those that rely upon logistics for moving product around. Enhanced technology has made supply chain management more effective and instantaneous. There is a new addition to the SCM market that is helping make the instantaneous aspect even more powerful than before: RFID.

Supply chain management is when materials, information and end products are monitored throughout the entire process. This process includes how items move between supplier, manufacturer, wholesaler, retailer and even consumer. Everything from raw materials to finished products is tracked via SCM.

Supply chain management has been advanced by the integration of software systems that help automate the process. Web-based solutions were the next logical step and they too made SCM even more effective. Even with advances in automation there are still manual functions of SCM, and one of the most costly has been the inventory function. But, a new entry into SCM has started to alleviate this oftentimes costly burden.

A New Twist

The latest addition to SCM has been RFID, both in practice and in theory. While some have started using this method of inventory tracking, many are just now starting to look into the benefits and drawbacks associated with it.

Steven Brown, president/CEO, NanoLogistics LLC, sums up the benefits best when he says, "It completely redefines shipping. RFID will lead to more accurate retail orders and fewer lost shipments. With inventory tracking at this level of accuracy, storage costs will be cut drastically and 'just-in-time' shipping will be a reality."

To understand how RFID fits in to supply chain management, one needs to understand just what RFID itself actually is. Dr. Oliver Hedgepath of the University of Alaska Anchorage Logistics Department is perhaps one of the most undisputed experts in the field of RFID. He gives an overview of RFID that makes sense to even the most non-technical. He says, "RFID or Radio Frequency Identification has been around for a long time, since World War II. It is using radio waves to broadcast an identity, or who you are. It's still just a string of numbers. The RFID push today seems new, and is, but only due to the extremely small physical chip that is used to hold the data that describes something. This small chip, about the size of a ground pepper flake, is attached to some very thin and very small antenna."

It is these chips that are placed on...