A new book, Taming the Big Data Tidal Wave, explains how radio frequency identification enables on-the-fly asset identification, brand protection and supply chain efficiencies.
A radio frequency identification tag, or RFID tag, is a small tag placed on objects like shipping pallets or product packages. It is important to note that an RFID tag contains a unique serial number, as opposed to a generic product identifier like a UPC code. In other words, it doesn’t just identify that a pallet contains some Model 123 computers. It identifies the pallet as being a specific, unique set of Model 123 computers.
When an RFID reader sends out a signal, the RFID tag responds by sending information back. It’s possible to have many tags respond to one query if they’re all within range of the reader. This makes accounting for a lot of items easy. Even when items are stacked on top of one another or behind a wall, as long as the signals can penetrate, it will be possible to get a response. RFID tags remove the need to manually log or inventory each item and allow a census to be taken much more rapidly.
Most RFID tags used outside of very high value applications are known as passive. This means that the tags do not have an embedded battery. The radio waves from a reader create a magnetic field that is used to provide just enough power to allow a tag to send out the information embedded within it. While RFID technology has been around for a long time, costs were prohibitive for most applications. Today a passive tag costs just a few cents and prices continue to drop.
As prices continue to drop, the feasible uses will continue to expand. There are some technical issues with today’s RFID technology. One example is that liquids can block signals. As time progresses, these issues should be solved with updates to the technologies used.
There are uses of RFID today that most people will have come in contact with. One use is the automated toll tags that allow drivers to pass through a toll booth on a highway without stopping. The way it works is that the card provided by the toll authority has an RFID tag in it. There are also readers placed on the road. As a car drives through, the tag will transmit back the car’s data so that the fact that you went through the toll can be registered.
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Another major use of RFID data is asset tracking. For example, an organization might tag every single PC, desk, or television that it owns. Such tags enable robust inventory tracking. They also enable alerts if items are moved outside of approved areas. For example, readers might be placed by exits. If a corporate asset moves through the door without having been granted prior approval, an alarm can be sounded and security can be alerted. This is similar to how the item tags at retail stores sound an alarm if they haven’t been deactivated.
One of the biggest uses for RFID today is item and pallet tracking in the manufacturing and retail spaces. Each pallet a manufacturer sends a retailer, for example, may have a tag. It makes it easy to take stock of what’s in a given distribution center or store. Eventually, it is possible that every individual product in a store that is above a trivial price point will end up being tagged with an RFID chip, or an updated technology that serves the same purpose. Now that we’ve covered what RFID data is, let’s look at some examples of how RFID data can improve businesses today.
Using Radio Frequency Identification Data
One application where RFID can add value is in identifying situations where an item has no units on the shelf in a retail environment. If a reader is constantly polling the shelves to identify how many of each item remains, it can provide an alert when restocking is needed. RFID enables much better tracking of shelf availability because there’s a key difference between being out of stock and having shelf availability. It’s entirely possible that the shelf in a store has no product on it, yet simultaneously there are five cases in the storage room in the back.
In such a scenario, any traditional out-of-stock analysis is going to show that there is plenty of stock remaining and nothing to worry about. When sales start to drop, people are going to wonder why. If products have an RFID tag, it is possible to identify that there are five units in the back, yet no product on the shelf. As a result, the problem can be fixed by moving product from the back room to the shelf. There are some challenges in terms of cost and technology in this example today, but work is being done to overcome them.
RFID can also be a big help for tracking the impact of promotional displays. Often, during a promotion, product may be displayed in multiple locations throughout a store. From traditional point-of-sale data, all that will be known is that an item on promotion sold. It isn’t possible to know which display it came from. Through RFID tags, it is possible to identify which products were pulled from which displays. That makes it possible to assess how different locations in the store impact performance.
As RFID is combined with other data, it gets even more powerful. If a company has been collecting temperature data within a distribution center, product spoilage can be traced for items that were present during a specific power outage or other extreme event. Perhaps the temperature of a section of a warehouse got up to 90 degrees for 90 minutes during a power outage. With RFID it is possible to know exactly which pallets were in that part of distribution center at exactly that point in time and appropriate action can be taken. The warehouse data can then be matched to shipment data. A targeted recall can be issued if the products were likely to be damaged or retailers can be alerted to double-check their product as it arrives.
It’s the combination that counts
With RFID data, like many other big data sources, the power isn’t just in what RFID data can tell you uniquely by itself. It is in what it can tell you when combined with other data. It can’t be stressed enough that a big data strategy must aim to incorporate big data into the same processes as other data. Big data can’t be a stand-alone effort. There are operational applications as well. Some distribution centers may tend to be too rough with merchandise and cause a high level of breakage. Perhaps this is true only for specific work teams or even specific workers. A human resources (HR) system will report who was working at any point in time. By combining that data with RFID data that shows when product was moved, it is possible to identify employees who have an unusually high rate of breakage, shrinkage, and theft. The combination of data allows stronger, better quality action.
TAMING THE BIG DATA TIDAL WAVE
AUTHOR: Bill Franks
PUBLISHER: Wiley India
PRICE: $49.95
ISBN: 9781118208786.
Excerpted with permission from the publisher. Copyright Wiley India. All rights reserved.