RFID in Warehousing

RFID in Warehouse
Management
Logistics Short Course
June 4-8, 2007
Jerry Banks
Jerry Banks, Atlanta, FA USA
What is RFID?
Radio-Frequency IDentification, or RFID, is a process and
physical infrastructure by which a unique identity, within a
predefined protocol definition, is transferred from a device
to a reader via radio-frequency waves.
Is it a glorified barcode?
The principle is not much different than
that of the barcode
As it is based on a microprocessor
containing a data-memory space, RFID
chips can be applied in many instances
that could not have been ever imagined
with barcodes!
What are some possibilities?

Imagine a world
Where a company has no problem finding
inventory in a warehouse
Where the products shipped concur with the
shipping order
Where determining that the products ordered
are all in the shipment
Where stock outs can be eliminated
The stage is set for RFID!

RFID technology has been used for many years,
but not noticed
Every day use of RFID technology has become
so common that many industries didnt even
really think about its potential
Many businesses thought that the technology
was either not robust enough for enterprise-wide
deployment or not cost-effective enough to
generate positive ROIs
The stage is set!

RFID is changing the future of industry by
supporting huge increases in automation,
productivity, effectiveness and cost-saving
opportunities
Have you seen this example?
Very common RFID application used by millions of people on a daily

basis
Many toll roads offer the option of a fast-lane in which the driver
does not have to stop at the toll booth to pay
Instead, the driver attaches a small device to the windshield which
allows the driver to proceed through the fast-lane at a reasonable
speed (usually the speed limit)
This small device, an RFID tag, is read by a reader, installed in the
fast-lane, as the car passes by
The reader sends a signal to an RFID enabled system with the
unique identifier of the tag as well as other pertinent information
such as date and time. This RFID enabled system then uses a
database to associate the tag identifier with the proper automobile
and ultimately with the bill code associated with that automobile.
Georgia 400
C
Cruise card
lanes
r
u
i
Gasoline Payment
A few major oil companies are bringing to market a new,
more convenient way to pay for gas
This method employs an RFID tag with a unique
identifier that is transferred to the pump via the RFID
reader
Once the unique identifier has been read, the back-end
information system matches this unique identifier and
relates it to the person at the gas pump, providing all of
the information to complete the sale
Preference information, such as to what credit card and
whether the consumer wants a receipt or not, is stored in
the consumers profile and used at the point of sale (the
gas pump
Mobils Speedpass
RFID infrastructure
An RFID system
RFID tag
RFID reader
Predefined protocol definition (format) for the
information transferred
Real-world systems
Include
RFID middleware and database
RFID enabled applications
Tag
Integrated circuit
Microprocessor, memory and a transponder
Microprocessor processes the information coming
from the reader and, at minimum, accesses the
memory to provide the unique identifier for the tag
Each tag contains a unique identifier within the
predefined protocol definition that makes it
different from every other tag in a specific set
Tag
Antenna
Used to communicate with the reader and
extends the range of this communication
Antenna design varies quite drastically based
on the environment and application of the tag
Passive Tags
No built-in power source
Power is provided by the radio frequency wave
created by the reader which induces in the antenna a
tiny but sufficient electrical current to activate the tag
When the tag comes into the range of the radio
frequency wave field created by the reader, it uses
that energy to power up its internal components and
to communicate with the reader
Advantages
Inexpensive to manufacture, very small in size and requires
no internal power supply
Disadvantage
Range of operation is limited to only a few meters
Passive Tags
Antenna configurations
Different configurations work differently
based on the constraints of the
environment in which the tag will be used
Much experimentation is required to
design an effective antenna
In practice, this is usually performed on a trialand-error basis
Active tags
Internal power source
Beep at specified intervals
Battery life is determined by the frequency of the
beeps
Signal strength is a lot higher than passive tags
and therefore can be read from a further distance.
In open-field environments with minimal
interference, active tags can be detected more
than 1.5 Km away from the reader
Active tags
Two negatives
Cost and size of the tag
Cost of the tag is bound on the lower end by the
cost of the battery which, by itself, is usually more
than the cost of a passive tag
Battery takes space and therefore the tag must
allocate real-estate for the battery
Increases its size dramatically when compared to a
passive tag
Active tags
RFID in the warehouse
Basic function
The basic functions of a warehouse can
be described simply as follows
Receive goods from a source
Store and protect goods
Retrieve goods according to customer
requirements
Prepare goods for transportation to the
customers
RFID in warehousing
Since the cost of RFID tags is decreasing,
RFID technology is gradually becoming a
strategic tool in warehousing
To improve competitive position
Improving the customer service level
Keeping the cost of operation to a minimum
Warehousing objectives
Minimize the cost of movement of goods

within the warehouse
Maximize the effective use of space,
equipment and labor
Keep track of all items within the
warehouse correctly
Respond to customer requests or
enquiries in a timely manner
Benefits of RFID in warehousing

RFID technology can facilitate the
automation of all manual processes
Reduces the amount of labor
RFID eliminates much human error
improving data accuracy
Reduces the cost of rework
RFID can speed up the handling process
Thus, improving throughput

Since information can be programmed into
the tags or retrieved from the tags at any
processing point throughout the supply
chain, a more dynamic decision making
process is allowed even without a central
controlling information system

More detailed and real-time data such as the location of
the goods, the status of the movable assets or resources
can be collected
Forklifts, containers, operators, etc.
By extracting useful information from the large amount of

data collected and integrating the extracted data with the
information system
Inventory planning can be improved
Asset utilization can be optimized
Better security control can be implemented and, ultimately
Thus, a higher level of customer satisfaction

can be achieved!
But, managers should carefully

consider the ROI before
implementation
Texas Instruments 13.56 MHz Tag-It Inlay
Activities in a warehouse
Receiving
Cross docking
Putaway
Inventory control and stock location
management
Picking
Sortation and conveying
Shipping
Asset management
Physical control and security
Warehouse activities and

RFID possibilities
Receiving
Goods are accepted from external sources
The accepted goods are then checked
against the bill of lading to see whether the
correct product in the right quantity has been
delivered
After checking, the responsibility of the goods
is then transferred from the source to the
warehouse

RFID possibilities
Receiving
If the process is handled manually, it will be
very time consuming and subject to human
error
Even if bar coding is used, the received goods
have to be scanned individually by the
operators
The situation is even worse if the received
goods contain multiple products in different
quantities

RFID possibilities
Receiving
If all the received goods are tagged using
RFID, the goods can be automatically
scanned within seconds when the pallet
carrying the goods is being moved through
the receiving door
Information concerning the received goods
can be directly sent to the information system
for validation with instantaneous feedback to
the operator in the receiving dock

RFID possibilities
Receiving
Eliminates the process of re-tagging
Instead of adding a new label or a bar code to the
received goods to hold the SKU number, the
number can be programmed directly into the RFID
tags

RFID possibilities
Receiving
Damaged goods can be easily distinguished
by programming an indicator in the tags
together with all other information related to
the damage such as the inspection result
The damaged goods will then be easily
identified by subsequent processes and sent
through different handling processes

RFID possibilities
Cross-docking
A key factor to the successful implementation
of cross-docking is the visibility of the goods
across the supply chain
Suppliers, distribution centers, warehouses
and retailers have to be linked to ensure that
all goods can be picked up and delivered
within the required time window
Shipping
Sorting
Receiving

RFID possibilities
Cross-docking
Using RFID technology will improve the efficiency and
accuracy of this process
After the goods have been moved through the
receiving door, their RFID tags are read and the
information is sent to the warehouse management
system (WMS) to check whether the goods are
needed to fill an open order at the shipping docks
The goods will then be sent directly to the shipping
docks if required

RFID possibilities
Cross-docking
Using RFID will speed up the processes of
receiving and identifying the cross-docked
goods without sacrificing accuracy
RFID technology is an important tool for
implementation of cross-docking throughout
the supply chain

RFID possibilities
Putaway
After completing the receiving process, goods
are then moved into the storage area of a
warehouse either manually or automatically
by the material handling system
Different kinds of product may need to be
stored in a specific environment and may
need different protection levels

RFID possibilities
Putaway
RFID technology can be used to ensure that
goods are stored in the proper environment
The environmental requirement information
can be stored in the RFID tag itself
The tags are scanned automatically when
passing through the storeroom door

RFID possibilities
Putaway
RFID readers can be installed on the forklifts
to read the tags on the goods when these
goods are being moved to the storage area
If the information from the tags is integrated
with the warehouse management system
which has access points on the forklifts,
forklift drivers can instantaneously obtain the
location of the best storage location to which
the goods should be moved

RFID possibilities
Inventory control & stock location management
Inventory control is the process for managing the
quantity of goods to ensure that the supply of goods
meets the demand
Stock location management is the process of
accurately recording the storage location of the goods
and efficiently retrieving the location when required
Both the exact quantity and the exact storage location
of the goods are vital to an efficiently operated
warehouse

RFID possibilities
Inventory control & stock location management
RFID technology is an effective tool for both inventory
control and stock location management
For example, if RFID readers are installed on the
racks within the storage space, then the item stored
with its exact location inside the storage area can be
continuously monitored
Labor intensive work such as physical counting of
inventory and manual recording of the location of the
goods can be avoided
Alien reader, < US$1000

RFID possibilities
Inventory control & stock location
management
In a random location storage warehouse,
there is no fixed location assigned for a given
SKU
In such a system, there may be some
unoccupied space within a filled storage area
Called honeycombing
Honeycombing

RFID possibilities
By continuous monitoring of storage space
using RFID technology, storage space
allocation can be more effective and can help
to minimize honeycombing in a warehouse

RFID possibilities
Picking
Selecting the correct items in the right quantity from storage
according to the customers order
Today, orders are being filled with smaller quantities but more
frequent deliveries to maintain a lower inventory level at the
retail sector
Fewer full-pallet shipments to a retailer
Mixed SKUs on a pallet for delivery is becoming the norm
As a result, case level picking is a necessity which increases
the time in picking and the chances of errors being made
To prevent any inaccurate shipments, time and labor cost spent
on verification has to be increased
RFID technology is an ideal tool to reduce the time of the
verification process and to remove human error within the
process

RFID possibilities
RFID may also find application in the area of sortation
For example, after retrieval from storage, goods may
need to be sorted according to the destination or the
product type before being loaded onto vehicles
Before being moved onto the sortation conveyor
system, goods have to be identified individually
If bar coding technology is used, for instance, each
item has to be read individually by a bar code scanner
or an array of bar code scanners in a high speed
sortation system
Sortation and Conveying

RFID possibilities
However, bar coding requires line-of-sight reading
and the scanning result is also sensitive to the
orientation of the goods
This is a limitation to the efficiency of the sortation
system
RFID can handle multiple loads simultaneously
disregarding their orientation
If RFID technology is used, the limitations of bar
coding can be removed and the efficiency of the
sortation system can be further improved

RFID possibilities
Shipping
The aim of a shipper is to deliver the right product to the
customers in correct quantities, free of damage, on time, with
accurate shipping documentation
Any deviation from the above statement will result in claims,
returns, inaccurate inventory and customer dissatisfaction
To avoid these undesired results, shippers have to verify the
goods before delivery
However, verification is a time consuming process
Additional staging space is needed to hold the goods for
verification
Additional labor is needed to verify the goods
All these factors increase the shipping cost and lead time

RFID possibilities
Shipping
If RFID technology is used, all items going out of the
shipping door will be automatically scanned and
reflected on the shipping documents
Verification can be eliminated from the process,
staging space and labor can be reduced and
throughput can be improved
There will be a better chance to deliver an error-free
shipping order and to maintain a high level of
customer satisfaction

RFID possibilities
Asset management
Expensive mobile equipment such as trucks, tractors,
trailers, forklifts and other material handling devices
are essential for the movement of the goods within
the warehouse
But, over equipping the warehouse is a waste of
resources
Also, containers, pallets and cages need to be
managed for handling different kinds of goods
Sometimes, operators cannot move a load simply
because the appropriate pallet is not available

RFID possibilities
Asset management
Scheduling jobs for pieces of equipment is not an
easy task because equipment locations change
By installing long range active RFID tags and
corresponding readers in appropriate locations within
the warehouse, these movable assets become more
manageable
Real-time location of trucks and forklifts can be fed
into the warehouse management system for the
operational level decision-making of the managers
Eventually, utilization rates of expensive equipment
can be improved, wait time of goods can be reduced
and management can be more responsive to changes

RFID possibilities
The warehouse environment with its availability of finished
goods makes it a prime area for theft
Item level tagging with readers installed on racks enables 24
hour, continuous monitoring and security control which prevent
or decrease theft in the storage area especially at night when
there are few managers available
However, this kind of control cannot prevent goods from theft
prior to the goods arrival at the warehouse
Goods can be stolen by truck drivers who deliberately deliver
fewer goods than the shipment required
This in-transit theft can only be avoided by careful counting in
the receiving process
In the old way, pallets had to be broken down and cases had to
be opened, or at least samples of cases had to be opened, to
count the number of items inside the case

RFID possibilities
This process was extremely labor intensive
RFID can be applied to replace manual counting and to avoid
human errors
However, if the truck driver joins hand in hand with a dishonest
receiving dock worker, goods are still easily stolen before going
into the warehouse
Similar security threats also exist in the shipping process
This collusion of theft should be avoided by careful inspection
and checking which is also labor intensive and prone to human
error
These inspection processes can be effectively automated using
RFID technology

RFID possibilities
Although bar coding technology is inexpensive, reliable,
standardized and widely used, limitations such as the
line-of-sight requirement, proximity dependence and
orientation-sensitivity make bar coding a slow and labor
intensive process increasing the possibility of human
error
Efficiency and effectiveness is also constrained by the
characteristics of the bar code itself
Moreover, the data stored in a bar code is static and
non-rewritable and the amount of information stored is
relatively small
Inconsistent printing quality also causes problems in the
application of bar coding in the warehouse environment

RFID possibilities
Challenges
Even with the decreasing trend of RFID tag prices, cost is still a major
barrier to the widespread application of the technology
Compromises have to be made and applications should be carefully
selected to ensure payoff of the investment in the early adoption of the
technology
Apart from the return on investment, companies have to consider
process changes in every aspect of the whole warehouse operation in
order to optimize the benefits brought by the technology
For example, shrink-wrapping is a process commonly found in a
warehouse
The wrapping material may cause electrostatic discharges (ESD) that
can damage the chip inside an RFID tag
Modification to the process to be performed on an antistatic floor using
ESD-sensitive wrapping material can eliminate the problem

RFID possibilities
Challenges
Like all other technologies, RFID also has its limitations
Communication between tags and readers are inherently susceptible to
electromagnetic interference especially when there are other systems
using the same frequency range within the warehouse
Also, metallic packages, liquid contents and any other conductive
material present in the environment may cause failure when RFID tags
are read by a scanner
To maximize the scanning rate, multiple scanners may be installed to
detect goods passing a location
This causes multiple reads by different scanners on the same item
The data must then be filtered by middleware before sending it to the
central database
As scanners may read any tags passing in their vicinity, the facility and
layout should be carefully designed so that any scanner installed to
detect goods going through a door will not record those goods that are
tagged as they are going through some other door near the designated
door

RFID possibilities
Challenges
Moreover, compared with a bar coding system, the amount of
data collected is drastically increased after adopting RFID
technology
The company has to consider whether the information
infrastructure can handle the vast amount of data collected
In addition, since there are many RFID vendors in the market,
relying on a single vendor is too risky
Furthermore, it is unlikely that bar coding will be totally replaced
by RFID technology overnight, or ever, for that matter
Companies using RFID technology will inevitably face the
challenge of handling the environment with multiple RFID
vendors of tags, scanners, middleware and any other RFID
components that are mixed together and integrated into the
information system with bar coding technology running in parallel
within the company

RFID possibilities
In conclusion
Although there are some outstanding
challenges that need to be overcome, RFID is
still a promising technology for an efficiently
operated warehouse and enables item level
visibility throughout the supply chain in the
future
End

RFID in Warehousing

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RFID in Warehousing

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RFID in Warehouse

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

What are some possibilities?

The stage is set for RFID!

The stage is set!

Jerry Banks, Atlanta, FA USA

Have you seen this example?

Very common RFID application used by millions of people on a daily

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

RFID in the warehouse

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Minimize the cost of movement of goods

Benefits of RFID in warehousing

Benefits of RFID in warehousing

Jerry Banks, Atlanta, FA USA

Benefits of RFID in warehousing

By extracting useful information from the large amount of

Thus, a higher level of customer satisfaction

But, managers should carefully

Jerry Banks, Atlanta, FA USA

Texas Instruments 13.56 MHz Tag-It Inlay

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Warehouse activities and

Warehouse activities and

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Warehouse activities and

Warehouse activities and

Alien reader, < US$1000

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Jerry Banks, Atlanta, FA USA

Warehouse activities and

Warehouse activities and

Sortation and Conveying