Radio Frequency Identification (RFID) uses electromagnetic fields to uniquely identify and track objects attached to a particular inventory. An RFID system contains a portable radio transmitter and receiver, usually embedded in a piece of equipment. The equipment emits signals that are picked up by a specific antennae. These signals enable machines like forklifts and pallet trucks to autonomously move from one location to another, locate and assess product parts on a pallet, or tag an item for re-filling with inventory. RFID systems can be used to track, store, and supervise the distribution of goods and services to multiple locations or warehouse divisions.
Tracking devices such as pallets are used to collect and label inventory items. The radio frequency identification tag is affixed to the merchandise, and its radio frequency signals are transformed by the receiver into an electro-magnetic signal, which is again transformed back to a radio signal by the transmitter, and ultimately transmitted to the control panel and receiver of the rfid system. Depending on the application, an rfid system may also include software that, among other functions, allows the warehouse workers to track their individual stock using barcodes. With the help of a RFID tagging machine, the supply chain management system automatically collates, tags, and classifies the stock so that it can be easily accessed and transferred between locations.
As an illustration of the importance of proper radio frequency identification tag usage in the supply chain management, consider the following example. If a manufacturing company produces a hundred widgets each day, it would be necessary to have two separate window boxes in which these widgets could be placed when shipping them to stores. If a manufacturer did not use a separate window box for each widget, it would be impossible to track the location and status of widgets as they are shipped from their manufacturing facility to stores.