When bar code and scanner technology was widely adopted more than 10 years ago, it transformed the retail sector and had a positive impact on many aspects of the extended supply chain. Now, radio frequency identification (RFID) technology is about to take things to the next level.
Industry experts say that it will create tremendous benefits for end-to-end supply chain visibility. The system helps capture and track unique data on individual items. And through a worldwide electronic support network, anyone with authorised access to the database will be able to check this wealth of information, which could include anything from a product's exact place of manufacture to its expiry date, recommended storage temperature, or the number of days it has been in one place.
Clearly, this will have far-reaching implications for the global supply chain, with the chance to improve inventory management, ordering and invoicing.
When the necessary systems are in place, everyday shoppers may notice just one thing: the price and contents of a whole cartload of supermarket goods will be calculated by pushing it past the checkout.
But each sale will also trigger the replenishment cycle, giving logistics companies, distribution centres, merchandisers and suppliers a real-time status update.
Essentially, the system consists of three elements. The first key part is the RFID tag, or transponder, which is a microchip and antenna contained in a stick-on or other form of label. It can be attached to each pallet, carton or item.
Lee Chung-yee, head and chair professor of the industrial engineering and logistics management department at Hong Kong University of Science and Technology, said the antenna sent radio waves to the reader, thereby transmitting data stored on the chip. The reader converted this to a digital format, which could then be stored on the computer.