Fleets that rely on PrePass to skip weigh station stops or EZPass to roll through toll collection facilities are already quite familiar with RFID (radio frequency identification) technology. However, the next generation of RFID may change the way goods are distributed, and that change will have major implications for virtually all fleets that participate in the distribution supply chain.
Here's the problem: a recent survey of managers at large manufacturing, transportation and logistics companies found that 70% still rely on manual systems for tracking inventory. And all reported that such manual processes, whether they involve physical searches or bar-code scanning, result in inaccurate data. In other words, inventory control is not very good.
New RFID technology promises to solve that problem. Smart tags produced in high volumes could fall below $.10 each, according to a recent study by Bear, Stearns & Co‥ At that price point, it becomes practical to tag individual pallets and perhaps even single cases. There's even speculation that tags as small as a grain of sand are possible.
Unlike bar codes, which require a line of sight reading of each label to capture the encoded inventory data, RFID transponders can read multiple tags simultaneously as they pass within range. For example, an RFID system positioned by a dock door would automatically capture all tag information as pallets are moved into and out of trailers. The newest generations of RFID are said to be 99% accurate in just such a dock-door application.
Of course affordability and effectiveness alone are never enough to foster widespread adoption of a technology. It also has to have champions, champions with enough muscle to move markets. In the case of RFID, those champions certainly exist. The mega-retailers such as Wal-Mart, Target and Home Depot are very interested in the efficiencies offered by the technology, according to the Bear Stearns report.
The third requirement for broad adoption is some type of standard for the data format. Bar codes for example, adhere to a standard developed and managed by the Uniform Code Council (USS). As it happens, UCC is currently working to develop such standards for RFID tracking, which are expected shortly.
Interesting, but what does this have to do with running a fleet? If you move goods, the implications are many. At the most basic level, you're going to be expected to help implement at least some part, if not the lion's share, of the RFID reader network. And at the highest level, your customers are going to have detailed information on how well or poorly you handle their shipments.
Chances are extremely good that RFID will become a routine part of transportation in relatively short order. While the potential cost of the technology might concern you, every major change also brings opportunities for those that can recognize them. The smart thing to do now is figure out where those opportunities lie with RFID.