This article discusses the advantages of RFID in supply chain and explains how it is possible to identify and keep track of the products constantly and how a RFID-enabled supply chain gets the real-time information accurately and quickly enabling accurate forecasts of the merchandise. It explores the various benefits of RFID in the CPFR supply chain, while dwelling on how RFID helps leveraging real-time data for collaborative planning across supply chain.

Radio Frequency Identification (RFID) is an analog-to-digital conversion technology that uses radio frequency waves to transfer data between a moveable item and a reader to identify, track or locate that item. It is a technology, which uses an electronic transmitter to tag the items, and products, which have some unique identification and customer information. It helps in knowing exactly the position of goods at any point of time and can also develop processes to capture and act on their information. Generally this type of data, which is generated by RFID, is huge and is valuable. This information, which is a real time enabler helps the executives at all levels of organization to make business decisions. The companies can ensure that their clients can derive the best from RFID technology and optimize their business needs.

Generally the data generated by RFID is an ID, which is of the size 64 or 96 bits. The data will not be valuable unless there is correlation between ID and other information. There may be delays in obtaining these correlations on a centralized system. There may also be delays in communication and may lead to obstruction and breakdown of the network as the data is very huge. Apart from ID, it may be necessary to have an idea of when an item was read for the first and the last time in order to assess the inventory. The origin of RFID is in the invention of tags that reflect or retransmit a radio-frequency signal. The tags can be of any shape i.e., small in size and can be of any form like scorecard, Barcode or in the form of chips, microchips. Higher frequencies such as visible and infrared devices are excluded as these systems have very different properties and are frequently sensitive to obscuration, heat, light and orientation. The table below explains the two types of RFID and the data related to them.

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