Chuck LEAN Business Consultant
Many original equipment manufacturers (OEMs) are restructuring their policies, procedures and business models to better reflect [removed] practices, and radio frequency identification (RFID) technology is playing a major role in this transition. The latest industry report from Frost & Sullivan indicated that RFID solutions have already proven useful to improve company performance across numerous sectors in manufacturing and predicted that the use of this technology will only continue to become more prevalent.
RFID solutions will grow more popular in coming years The Analysis of the Global RFID in Manufacturing Market revealed that revenue in regard to the RFID market topped out at $1.29 billion in 2013. Based on the analysts' forecast, this number could reach $99 billion by 2020. In just six years, the market is expected to nearly quadruple, which is a testament to the effectiveness of RFID solutions to aid in manufacturing operations. The analysts projected that this growth will be due to higher demand for technologies and strategies that focus on efficiency. This is especially useful for OEMs that have multiple locations, as RFID tags can be tracked from different areas and the data can be shored up in one location for better company-wide oversight.
What is RFID technology? RFID systems use radio frequencies to easily transmit information between two sources. RFID Journal explained that the waves transfer data from tags containing microchips and antennas to RFID readers that have their own antennas. These tags can be placed on anything you need to track, from equipment to inventory, and they act much like barcodes to help track certain information. RFID tags outpace barcodes in certain areas, however. They do not need to be visible for the reader to recognize it, so you don't have to climb ladders and sort through boxes to track inventory or shipments. With RFID tags, you can also choose which data is stored within the microchips. For instance, you could track the amount of remaining inventory of certain class C components, or keep a history of scheduled maintenance for machinery used on the factory floor.
How can it aid lean manufacturing efforts? With the ability to easily keep track of inventory and equipment, RFID tags can help improve efficiency on the factory floor in a number of ways. In terms of tracking inventory, RFID tags can make it easier to take stock of what you have available in your warehouse in terms of both accuracy and time. You can quickly call up information regarding your stock, which can help avoid inventory getting too low, and since the information is already digitized, it will be easier to share it with a supplier when establishing a [removed] ( [removed] ) program. You can also use historic RFID data to forecast demand.
If you track equipment or vehicles with RFID technology, you can establish and stick to a maintenance schedule more easily, which can help avoid breakdowns and unnecessary repairs. In turn, you can save money and have a lower risk of production downtime due to inoperable equipment. When you can quickly and easily check to determine the last time a particular delivery truck was serviced, it will be much easier to determine whether it needs a tune-up before it heads out on a 1,000-mile journey. If you're tracking maintenance history on paper, there's a much greater chance the information could be lost or scheduled repairs overlooked, leading to a broken-down truck, a delayed delivery and an unhappy customer.
Companies that know manufacturing know lean is the way to go. But even lean operations might have some work to do if they’re not using the right tools.
As far as advanced technology goes in the manufacturing sector, RFID is actually pretty simple. For just pennies each, radio frequency identification tags, or chips, can enhance your top-down understanding of everything happening in your manufacturing outfit and make your lean operation even leaner still.
RFID Facilitates an Organization-Wide Culture of Improvement
We shouldn’t have to explain the benefits of lean manufacturing. Suffice it to say, reducing waste and redundancy benefits profitability one company at a time, but it also helps reduce the cumulative “footprint” of the entire industry. But doing any of this well requires companies to make continuous process improvements a matter of their culture. And making improvements means gathering information you can act upon.
RFID can improve the fundamentals of your operation by helping you gather information far more quickly than you could using conventional means. What information? Things like:
Lean manufacturers already know that their “front-line” workers are in a great position to identify sources of waste and to tag opportunities for improvement. But adding RFID technology to your operation can put even more tools into the hands of these workers.
You might be worried about data overload, but RFID adopters have already logged positive results after making RFID technology a part of new employee training from the very beginning. Empowering employees with this type of data-gathering technology, in an environment that values continual positive change, results in [removed] . This, in turn, makes them more likely to spot bottlenecks and areas that could stand to be reevaluated.
RFID Makes Inventory Maintenance Practically Painless
Inventory maintenance is a time-consuming task for almost any outfit. In times now happily behind us, “doing inventory” by hand could take hundreds of hours or more. But with RFID technology, you can accomplish the same task, and come away with the same information, in just [removed] in many cases.
There are several specific use cases that might be of interest here. An RFID-powered inventory system also gives you a tool for tracking the age and expiration of products across one facility or several. Perishable goods like foods and beverages are an obvious fit, but so is any portion of the supply chain that touches the medical fields. Hospitals rely on the [removed] of a dizzying variety of disposable products such as splints, bandages, pads for EKG machines and even bedpans, some of which have finite shelf lives.
By tagging sensitive inventory like this with RFID chips, you can more easily move slower-moving items from one location to another to ensure they’re used before their shelf life expires. It’s another way to make sure nothing’s being manufactured that doesn’t strictly need to be.
RFID Delivers More Actionable Data for Quality Control and Efficiency Checks
The technology that powers RFID is the heir apparent to the barcode, which let manufacturers perform a lot of the tasks we’re talking about here today, but required far more time and handling. Whereas barcodes need to be scanned one at a time, and usually by hand, RFID tags can be read by the corresponding receiver in bulk, meaning it’s easier than ever to see at a glance which products, and how many, arrived on your dock. It also means you can tell right away whether it’s actually what you ordered.
This part of quality control is made vastly easier with RFID tech on your side. So is the swapping-out of merchandise that was damaged in transit. The benefits here are twofold — customers get to expect faster turnaround times and resolution, while employers get to spend less labor and money on taking corrective actions. Each process can be [removed] erformed by [removed] of employees and with fewer “touches” on the products, which means fewer opportunities for you to introduce errors of your own into the mix.
It’s worth mentioning industrial certifications in this context, too. Obtaining certification in accordance with ISO and other international quality standards means building a deliberate, repeatable and scalable process to ensure consistent results throughout your operation. Since RFID technology provides abundant insights precisely along these lines, it could prove invaluable if the work you do requires specific credentials or accreditations from governing bodies.
RFID Provides Immediate Insights From Retail and Point-of-Sale
We’ve talked mostly about the production side of things, but the hugely important other side of the lean manufacturing “coin” is getting insight from the consumer’s side of things. That means retail.
RFID tags reduce friction in your operations while delivering data more reliably and quickly. But they can accomplish the same thing in a retail setting, too, by delivering [removed] about which products are leaving stores quickly and which locations have a surplus that another location could use.
This has implications beyond inventory tracking — it’s really an up-to-the-minute-accurate glimpse into the shopping habits and locations of the audiences you’re ultimately targeting. Lean manufacturing answers “demand” with an ever-more-efficiently-delivered “supply.” RFID delivers huge efficiency boosts on both sides of that equation.
That’s the key takeaway here: introducing RFID into a lean manufacturing operation is a win for all involved. From supply all the way to demand, it’s easier than ever to know what’s happening under your roof — and how it all fits into the bigger picture.