The value of RFID technology in warehouse management

Many people have asked the author if there is an indicator to quantify the return on investment of RFID technology in warehouse inventory management. Unfortunately, as far as the author knows, no. In recent years, the author has been proposing to many organizations to sponsor research on how to judge the value of RFID technology in warehouse management. In this way, we can create an ROI calculator in the warehouse management field like the RFID clothing Retail Industry return on investment calculator.

This article will give you a brief appreciation of the value of RFID technology in warehouse management

Nearly all warehouses have the same workflow procedures. Receive goods; inventory and place goods; inspect and ship goods to Stores or factories according to orders. The author believes we can find a way to quantify the benefits of RFID.

For example, we can study the time it takes employees to receive items using manual inventory or scanning barcodes, and compare the time it takes to receive items using RFID technology. We can calculate the time employees spend looking for items using barcodes and the errors they make along the way. Similarly, we can also compare the time spent using RFID technology and the error rate.

How long does it take for an employee to use a barcode to determine if the item found is what is needed? What about RFID technology? What is the error rate in shipping using barcode technology? What about RFID technology? How much damage will these errors cause? You can even calculate it if possible. Losses due to lost, stolen or damaged items.

We can create a calculator that allows companies to enter parameters such as labor hours cost, quantity of goods received, value of goods, etc. Companies can also estimate system costs based on the number of RFID tags, readers, etc. required. The author believes that we can create an evaluation Tool that will be of great help in enterprise RFID system selection.

Of course, for items that are not RFID tagged before entering the warehouse, we also need to calculate the time and cost of attaching the tags, which is a big challenge. This makes it difficult to calculate accurate ROI data. If we can quantify the benefits of RFID in warehouse management, vertically integrated players can work together to encourage suppliers to tag items on the manufacturing side. Suppliers can also judge whether it is worth using RFID systems based on quantitative data, which will help the RFID industry quickly and massively popularize it.

Just as the Auburn University laboratory has done in the retail industry, the author believes that soon the quantification of RFID systems in the field of warehouse management will also make progress.

It's a pity that RFID companies often waste a lot of money on meaningless things. A few years ago, two RFID solution providers spent $60,000 on newspaper promotions. Unfortunately, these articles have not convinced any company to deploy this technology, and the money and preparation can be said to be completely meaningless. If this money could be spent on quantifying the benefits, I dare say the results would be completely different.