If you are already using RFID, you are well aware of the benefits the technology delivers. However, some users are not aware of the compelling reasons to apply RFID tags at the source of manufacture.
Most commonly, global companies with high volumes and complex supply chains employ source tagging. Those three factors most often point to a high ROI for RFID. But other factors also come into play.
For example, while large apparel retailers have made the biggest inroads to date, there is movement in other product categories, including cosmetics, liquids, over-the-counter drugs and other perishables, such as grocery items, all of which were considered too difficult to tag in the past.
Cosmetics is a good candidate for RFID source tagging. A single cosmetics merchandise category may include 300 or more SKUs, there is high turnover of goods, it tends to be at high-risk for shoplifting and each unit is relatively costly, so good inventory management and asset protection makes sense.
One driver behind the expanded range of merchandise being source tagged is the fact that hypermarket retailers have already experienced success source tagging apparel and are now looking to tag other merchandise categories.
In the case of food and over-the-counter drugs, expiration dates are an added catalyst. By enhancing supply chain transparency, retailers can track chain of custody from source, comply with regulations and more efficiently respond to crises — for example, when a specific batch of over-the-counter medication is determined to be harmful. In such cases, only that specific merchandise determined to share the same RFID code might have to be discarded, vs. the vast quantities pulled out and destroyed today.
Moreover, this added supply chain visibility can ensure brand authenticity for drugs and other merchandise. When detailed information is included on RFID tags at source, retailers can ensure that a given leather designer handbag, for example, is legitimate and that the meat marked sirloin is prime beef and not a lower grade of beef.