Benefits of implementing RFID in Supply Chain Management

The term Supply chain covers all possible processes involved in the flow of goods from manufacturing to customer; including manufacturing, distribution and transportation. Thus, supply chain management covers all these steps in combination with marketing decisions, customer demand, in alignment with general corporate strategy and goals. Usually considered as a complex and knowledge intensive process, management of supply chain can benefit significantly from the implementation of RFID technology.
RFID technology has risen to become a revolutionary element in supply chain management. It is not just a replacement for barcodes. RFID ensures that the right goods are available in the right place with no discrepancies and zero errors. It makes the supply chain considerably more precise and improves the efficiency and reliability of the entire chain. As real-time information is made available also administration and planning processes can be significantly improved.
This article aims to give insights into the benefits of RFID usage in supply chain management processes. For simplification, the processes are described in the order they take place. We chose to describe the processes of the FMCG (fast moving consumer goods) industry in this article. However, the benefits of RFID in supply chain management can be reaped also in other industries.

Over the last few years, more and more companies are integrating RFID technology into their strategic planning, since it provides significant advantages to supply chain performance. There are far more benefits gained by RFID implementation into supply chain and logistics operations than just improving identification of products, shipments, and assets. Nevertheless already the most common benefits prove that RFID is worth the investment.