6 Ways Manufacturing & Supply Chains Can Benefit From RFID

6 Ways Manufacturing & Supply Chains Can Benefit From RFID

6 Ways Manufacturing & Supply Chains Can Benefit From RFID

The incredible versatility of Radio Frequency Identification (RFID) technology means its applications can be applied starting from the beginning of the supply chain down to the very end. The tags and readers that make up a RFID system can transmit and save data through radio waves about a particular item, such as its product number, expiration date, temperature, and many more.

RFID has evolved significantly since its first major application years ago. Today, top brands and retailers like Amazon, Walmart, H&M, and Nike rely on RFID technology to track inventory as this enables enhanced customer service. Read on to learn why RFID has become indispensable to these corporate giants and many other businesses in order to know more about its significant benefits.

RFID and the Advantages It Brings to Supply Chain Operations

1. Modern inventory management

Inventory management is one of the greatest challenges that warehouses and online retailers must address. An RFID-enabled solution simplifies things with its fast and reliable way of tracking everything that needs to be monitored, such as the quantity of products they have on hand at any specific time.

By integrating RFID into a warehouse management system (WMS), businesses can get access to real-time data about their inventory levels and develop a better timeline as to when they should increase their inventory. Introducing automation helps in this regard and makes processes like automated stock reordering feasible.

Apart from timely replenishment, RFID asset tracking also helps businesses optimise inventory levels by ensuring a practical tolerance of excess products on the shelves resulting in efficient storage. Keeping an optimal inventory level may not come off as a profit driver, but it can help save between 20-30% on warehousing costs, which is only one of many cost-saving reasons to invest in RFID.

2. Efficient and high-visibility asset tracking

Similar to tracking inventory, RFID tags also help keep track of business assets, from smaller items like laptops and packaging materials to bigger ones such as forklifts and trucks. This high-visibility tracking capability deters theft, prevents loss, and reduces the chances of issues arising due to running out of critical materials that support the business’s operations.

3. Improved production control

Since RFID can track items down to the individual components that comprise them, it serves as the perfect system for complex or customised storage and manufacturing processes, improving efficiency and reducing waste.

4. Greater accuracy

Substantial improvements in product picking are another benefit of implementing RFID in WMS and other storage systems. According to Cybra.com, distributors and manufacturers that incorporated RFID into their supply chains improved their shipping and picking accuracy by 80%. The significant reduction in shipping and packing errors saves businesses a significant amount of money and time. Moreover, higher inventory accuracy can result in increased sales. Granted, this is only possible if retailers leverage the data they collect to improve their processes.

5. Time savings

RFID serves as a key foundation for automation. By combining RFID technology with a WMS, businesses can then develop a solution that eliminates repetitive and labour-intensive tasks in their operations, like recording incoming and outgoing products.

6. Better traceability

There is always room for improvement regarding transparency and visibility in the supply chain. Consumers now demand to know where their items are and have the ability to track their shipments from the warehouse. Similarly, retailers and distribution centres need better visibility to resolve bottlenecks in their supply chain to maintain customer experience standards and compliance.


RFID has been in use across many industries for decades now. However, supply chains have only recently begun to fully adopt and implement the technology as their go-to solution for improving efficiency, boosting visibility, and driving better overall results. Furthermore, RFID systems simplify the process of making important decisions regarding inventory and overall business thanks to the availability of data analytics.