RFID : The Future of Warehouse Manufacturing and Discrete Manufacturing Solutions

What does your passport, an arowana fish, Wal-Mart, TV tubes and a warehouse have in common?
Radio Frequency Identification System (or widely known as RFID) has been widely lauded in manufacturing and distribution circles for its potential to join previously disparate elements throughout the supply chain, eventually linking them to the locations where distribution and actual sales occur.

RFID can help you to…

i. Acquire a high degree of accuracy on the manufacturing processes– imagine knowing in a snapshot what is produced, when was the last manufacturing process completed and where your product is at the moment!
ii. Safely manage dangerous tasks; track, manage and capture information on hazardous task such as corrosive or flammable chemicals
iii. Automate warehousing management quickly – able to track, identify and zoom-in on inventory at any time
iv. Tag key information in your products – manufacturing date, batch number, serial number, place of assembly, product destination, and whatever information you can dream of

Benefits of RFID:
Benefits	Description
Size	RFID microchip smaller than a grain of rice; non-intrusive
Scanning Speed	100 milliseconds per transaction
Range	Do not need line-of-sight; long read range of up to 10 feet
Portable Database	Information can be incorporated into RFID chip – i.e. colour, manufacturing vendor, batch number, serial number, etc.
Product Life	High reusability with multiple read/write; portable database
Environment Coverage	Operates in harsh environment – dust, variable temperature, chemicals, weather

Areas/ Criteria for Successful RFID Deployment
- High Labour Cost (i.e. pharmaceuticals, engineering)
- Need for Data Accuracy (i.e. warehousing, controlled goods, pharmaceuticals )
- Dangerous Environmental Factor (i.e. corrosive chemicals, dusty environment, weather)
- Minimum Human Involvement (i.e. automation)
- Handle High-value Items (i.e. arowana fish, retail clothing, perishable items – fresh vegetables, electronics)

ROI – Business Case for RFID:

Ornamental Fish Example

Before
Total Picking Cost = 4 men x 4 hours packing x 25 working days per month x RM40 per hour
Total Picking Cost Pre-RFID per year = RM192,000!

After
Total Picking Cost = 1 man x 0.5 hours packing x 25 working days per month x RM40 per hour
Total Picking Cost Post-RFID per year = RM6,000

These translates to potential savings of RM 186,000 from lower labour usage.

ROI = slightly >1 year (taking only labour reduction)
*Have not included other potential savings such reduce stock level, lower misshipment cost,
reduce shrinkage, etc.

Limitations
Two key factors influencing performance:-
- Operating frequencies
- Tag attributes and power source
- Cost – RFID tags ranges from USD 0.30 – USD 20
- Signal Interference – Distance + Metal Surfaces + Liquid (Soup cans are a big no-no!)

MBS RFID Total Solution package inclusive of:

- Navision Financial module
- Navision Distribution module
- Navision Manufacturing module
- HP Server
- RFID infrastructure (antenna + RFID tags)

starting from RM218,000!!!