The supply chain is a major aspect of an industry as this is the network of all the individuals, organizations, resources, activities, and technology involved in the creation and supply of a product. Supply chain traceability is essential and can be used to improve the efficiency of the supply chain. Tracking of every process and stage inside a supply chain refers to traceability. The global track and trace solution market was valued at USD 6.42 billion in 2023. The market is projected to be worth USD 7.50 billion in 2024 and reach USD 26.35 billion by 2032, exhibiting a CAGR of 17.0% during the forecast period (2024-2032). You can access data about every stage of the supply chain inside an industry.
Related Statistics
To make traceability more convenient and productive, RFID technology plays an important factor. Generally, RFID technology refers to Radio Frequency Identification. These technologies can be used using tags and barcodes that stick to the product and are readable through barcode scanner devices that are mostly IOT-based. The global RFID market size was valued at USD 14.11 billion in 2023 and is projected to grow from USD 15.49 billion in 2024 to USD 37.71 billion by 2032, exhibiting a CAGR of 11.8%.
Supply chain traceability can get benefits from using RFID technology in different aspects like warehouse monitoring, product tracking, defects detection, information gathering, etc. Supply chain management relies heavily on RFID technology, especially when it comes to monitoring the flow of goods into and out of warehouses. It offers vital real-time information on several supply chain-related topics, such as the whereabouts of items, the status of shipments, and the effectiveness of supply chain partners. Manufacturers & distributors who implement RFID technology into their supply chain see an 80% improvement in shipping/picking accuracy. Where the overall success rate of RFID technology is from 63% to 95%. This is a very good success rate in terms of any technology.
In this article, we will see the role of RFID technology in improving supply chain traceability. We will also see some other additional details like benefits, challenges, etc. After discussing the whole topic, we will conclude the ending. Hope that the introductory part makes you excited to know more about the topic.
What is RFID Technology in Supply Chain Traceability?
Generally, Radio Frequency Identification (RFID) is a technology that uses radio waves to passively identify a tagged object. This can have many important roles in many commercial and industrial applications. RFID technology makes inventory and warehouse management more advanced by facilitating precise and effective stock tracking. Throughout the supply chain, RFID solution is utilized to precisely count, adjust, and trace each item and carton. Beginning at the plant, where products are labeled at the point of origin, orders are sorted at the distribution center before being shipped to retail locations.
Also Read: Optimize Your Workflow With Innovative Product Traceability Solutions
How does RFID Technology Play a Role in Supply Chain Traceability?
When it comes to tracking the flow of goods into and out of warehouses, RFID technology is essential to supply chain traceability. In addition to tracking the whereabouts of items, shipments, and the effectiveness of supply chain partners, it offers vital real-time data on several other supply chain-related topics. Real-time tracking enables us to ensure the product’s safety and quality. After the receiving process, you can check whether your products are in the right place or not. This overall enhances the efficiency and productivity of the supply chain. There are other benefits that we will see in the upcoming paragraph.
Benefits of RFID Technology In Supply Chain Traceability
There are a lot of benefits of RFID technology in supply chain traceability as here are a few key benefits mentioned below.
Enhanced Traceability
Having details and real-time tracking records of products is a very crucial thing that helps to increase visibility for the supply chain. Each product can be uniquely identifiable using RFID and linked to pertinent data, like manufacture date, origin, and quality certifications. Recalls can be made more precisely and targeted with RFID, which lessens the effect on the whole supply chain. This overall helps to enhance traceability in the supply chain.
Real-Time Tracking
Past recorded data is important but if you have real-time tracking then it could be the cherry on the cake for you. Real-time product tracking across the supply chain is made possible via RFID technology. Industries can obtain real-time visibility into the position, movement, and status of RFID-tagged products by continuously monitoring them. Proactive decision-making, less chance of loss, and enhanced inventory management are all made possible by this knowledge.
Data analytics and Insights
Data analytics and insights are very necessary as one can analyze their supply chain performance to fix weaker sections. With the RFID technology, it is possible to have advanced analytics tools that can be combined with data to extract important insights. Businesses may track key performance metrics, find bottlenecks, find trends in RFID data, and improve supply chain operations. Better supply chain traceability, process enhancements, and data-driven decision-making are made possible by these insights.
Improved Inventory Management and Accuracy
Inventory management is greatly improved by implementing RFID technology since it allows for real-time tracking and lowers errors, both of which increase accuracy.RFID enables consistent and smooth supply chain management by tracking the whereabouts of products during storage and retrieval processes. When compared to conventional tracking techniques, RFID has been demonstrated to increase inventory accuracy by as much as 13%.
Streamlined Operations
Numerous supply chain procedures are automated by RFID technology, which streamlines operations and enhances traceability. It speeds up order fulfillment, minimizes manual work, permits automatic inventory reconciliation, and enhances logistics management. This improved efficiency lowers expenses and boosts supply chain performance while also improving traceability.
Also Read: How Traceability Solutions Are Reshaping Industries In 2024?
Challenges with RFID Technology in Supply Chain Traceability
There are many benefits of RFID technology for supply chain traceability but there are some benefits too. Here are some key challenges mentioned below.
- Privacy can be a challenge as RFID technology can scan sensitive materials like passports, credit cards, etc. This should result in leaked data sometimes.
- Limited storage of RFID technology can be another challenge as more data cannot be stored in RFID storage. It needs timely deletion of past data which sometimes can be a problematic thing.
- Potential health risks related to exposure to electromagnetic radiation emitted by them during operation can be a serious challenge.
Also Read: The Importance of Traceability in Manufacturing: An Overview
Final Words
Supply chain traceability is greatly improved by RFID technology, which offers precise data, real-time visibility, operational streamlining, effective product tracking, and recall management. Businesses may improve control, transparency, and traceability throughout their supply chains by deploying RFID supply chain traceability. Manufacturing organizations may increase supply chain traceability, get real-time supply chain insight on the production floor, and remove inefficiencies with the use of RFID technologies. Overall, RFID technology is the future of supply chain traceability because its presence is higher than expected. Every business should implement this technology and pave the way toward sustainable development.
