Streamlined operations are key to maximising efficiency and accuracy in the world of promotional products. For businesses seeking to optimise inventory management, the solution may lie in Radio Frequency Identification (RFID) technology. An investment in RFID could be transformative, offering real-time visibility, drastically reduced stock taking times and near-perfect accuracy in tracking promotional items. Is your business ready to take this leap into advanced stock control?
How does RFID technology work?
Using radio frequencies, RFID technology can transfer data and identify objects using tags and readers. Tags are attached to assets and transmit information wirelessly to the readers, which can either be stationary or handheld. The data is then stored on a computer system, allowing for real-time tracking of asset location, condition and maintenance needs. RFID technology is used in a variety of industries, such as healthcare, retail, logistics and manufacturing, but it could also be transformative to a promotional products business.
RFID technology can achieve nearly 100% accuracy. Cybra found that it improved accuracy from an average of 65% to 95%
How much does it cost?
RFID systems need tags, readers, antennas, software and of course, installation. Here’s how the costs break down:
Tags:
Passive tags: from 10p each
Active tags: from £15 to £100
Readers:
Prices range from £100 to £20,000
Fixed: Mounted in locations like doorways or conveyor belts, implementation costs from £2000 to £10,000 (more common in manufacturing and warehousing)
Handheld: implementation ranges from £500 to £2000 (with low ongoing maintenance costs)
Software: Passive tag reading software could be an open-source project, whilst integrated applications like RFID to ERP could cost thousands to maintain. Asset management software combined with RFID technology typically costs around £1000 to £1200 on a subscription basis.
Installation: Active RFID systems can be installed in as little as one day, whereas passive systems require special antennas and calibration, which can be expensive.
Recurring costs might include any inlays or labels that are only used once then discarded.
Consider your needs. If real-time data is less critical and your labour costs are relatively low, passive tags are most suitable. For real-time data and high labour costs, active tags and readers are the best option.
Any limitations?
Whilst RFID technology is highly effective, it does not come without challenges. Metal and liquid-filled containers in warehouses can interfere with radio waves, disrupting signals from tags to readers. This is definitely something to consider when planning your RFID implementation, if applicable to your business.
Why is it worth the investment?
Improved accuracy: RFID technology can achieve nearly 100% accuracy. Cybra found that it improved accuracy from an average of 65% to 95%. Significantly reduced errors translated to improved shipping and picking accuracy by up to 80%, potentially saving thousands in chargeback penalties for delivering incorrect items.
Efficient stock taking: RFID dramatically reduces inventory time. In one case study, scanning a 10,000-item inventory with barcoding took 53 hours, while an RFID system completed the task in just 2 hours.
Reduced Labour Costs: RFID reduces the need for manual labour, which typically accounts for 65% of most warehouse operating budgets. The technology can lead to savings equivalent to 4% of store staffing costs. Instead of requiring multiple employees for stocktaking, only 1 or 2 are needed with RFID readers. This reduction in labour costs quickly offsets the initial investment in RFID technology.
Who’s using it?
As RFID technology is known for inventory and asset tracking, it is popular in the retail industry. Adoption by smaller organisations is slow despite the technology having been around for a long time. However, big brands are exploring how they can use RFID in other creative ways. Zara uses RFID for inventory tracking, allowing them to plan accordingly when things go out of stock etc. Other retail brands such as Decathlon and Uniqlo use the technology to create an effortless self-checkout experience, where the customer simply places their items in a box, and the RFID tags are instantly recognised and totalled ready for the customer to pay. Following in the footsteps of these successful brands will give you access to crucial data about your business, assisting your organisation in all kinds of ways.
The technology can lead to savings equivalent to 4% of store staffing costs
Takeaways
Implementing RFID technology for your promotional products business might not be cheap, but the ROI has proven to be positive across the board.
To get started:
Define your use case and determine the type of RFID tag and required functionality.
Understand that expenses hugely depend on the type of system you choose.
Consider the long-term benefits and efficiency gains when evaluating the initial costs.
Embracing RFID technology will help enhance your accuracy, improve your inventory management and reduce labour costs, ultimately leading to increased profitability and customer satisfaction.
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