Radio Frequency Identification (RFID)

Benefits for EFEDA members

EFEDA sees the identification of components and materials via radio-readable tags as an important way of improving traceability in parts control and service records. EFEDA has signed up to the EAN International coordinating body and it believes that there could be tremendous opportunities for cost reduction.

By analysing current practices and procedures, 8 main areas of benefit can be identified. These are:

Improved Productivity and Cost Avoidance
Identifying items by RFID involves less work than using barcode scanning and other less automated ways. This leads to greater process effectiveness in many tasks such as receiving and putting away, picking and shipping goods where the time required and cost of identifying items by RFID is substantially less than other methods.

Decreased Cycle Time and Taking Costs Out
RFID scanning is not a serial process, so the business can perform identical tasks much more quickly. This means processes moving goods through a supply chain are more efficient, leading to a reduction in the need for larger inventories.

Reduced Rework
As RFID scanning has a greater first time pass accuracy this reduces the number of errors that are generated and retries needed.

Reduced Business Risk & Control of Assets
RFID tagging enables better audit and asset control. The ability to track and trace items better means assets can be located more easily. The opportunity for enhanced data collection leads to increased accuracy of record keeping and improved asset maintenance. Regulatory compliance can be achieved more effectively.

Improved Security and Service
Being able to validate information relating to an item enables increased security. This individual identification contributes to more effective access control, reductions in shrinkage and other losses and the ability to provide fast and efficient services at the point of need. Ability to authenticate information can prevent activities like counterfeiting and fraud.

Improved Utilisation of Resources
Information obtained by RFID scanning can be used to improve planning. Processes can be improved, time can be saved, assets can be utilised better.

Increased Revenues
By eliminating uncertainty companies will suffer less "out of stock" situations and obtain greater item availability, reducing lost sales and increasing choice leading to more sales.

Exception Management
RFID enables processes and procedures to be measured better. Until a process can be measured accurately, it often cannot be improved. The contribution information captured by RFID offers to IT applications will allow managers in companies to be alerted when compensatory business decisions need to be taken.