Environmental Benefits Of RFID In Supply Chain Management

environmental-benefits-of-rfid

image: Sura Nualpradid / freedigitalphotos.net

Radio Frequency Identification (RFID) is a not-so-new technology that is becoming increasingly popular within the manufacturing supply chain (SC) for the management of assets, inventory, and materials transportation. Among other benefits RFID tagging has helped improve changeover times, reduce cycle times and manage stock levels in recent years. Since RFID can deliver almost real-time information on the status of materials and stock, many manufacturers are also using the technology to assist their sustainability practices. With more emphasis than ever on businesses to streamline and improve environmental policies, can this now widely adopted technology offer green benefits too?

Since the key objectives of any SC management system are to balance cost, service and environmental impact, it is of increasing importance that the environmental box is ticked. Businesses worldwide are recognising the value and importance of SC systems in this area. As an example, Nike partnered with their SC software supplier LLamasoft in 2012 to improve efficiencies and reduce carbon footprint; investing heavily in a software platform and wider infrastructure to deliver results.

While it is argued by some that the materials and precious metals that physically make up RFID tags are difficult to recycle in themselves and a potential source of contamination, new research conducted by a team at Sam Houston State University’s Center for Innovation and Technology and Southern Arkansas University, suggests that RFID really can improve environmental sustainability and support green SC management practices by providing accurate and timely information to the SC management team.

Beyond the results of this study, RFID tracking as an integrated component of SC management systems is reporting additional environmental benefits to manufacturing and SC lines:

Waste reduction

When used within a lean manufacturing/production, or just-in-time, process, RFID’s ability to deliver almost real-time data can reduce common types of manufacturing waste such as defected materials, waiting, overproduction, movement, inventory, complexity, and unused creativity.

Monitoring of supplier environmental policies and practices

RFID tagging permits manufacturers to monitor materials and suppliers throughout the SC. In turn companies can track exactly what goes into its products, where it is sourced, how it is transported and how recycling is handled.

To further aid this particular sustainability benefit, Nike, along with Walmart and Levi’s, launched a Sustainable Apparel Index in July 2012 to evaluate products, material types, manufacturing processes and facilities to measure the environmental impact of apparel looking specifically at water use, gases, social and labour factors, chemical toxicity and waste.

Unilever is another champion of this. The conglomerate sources from 10,000 raw materials suppliers every year and earns annual revenues of more than $50 billion dollars from more than 400 brands. RFID as a component of large-scale SC systems have contributed to the business improving working conditions, providing fair-wage incomes and managing environmental issues such as waste and climate change.

Responsible management and disposal of assets

SC and warehouse management software solutions using RFID, as provided by companies such as Waer Systems and JDA, enable businesses to be compliant with legislation, realise capital and of course, efficiently and responsibly recycle assets that are no longer required.

Transportation efficiency improvement and carbon-footprint reduction

Since RFID enables more accurate inventory tracking, the technology can be used to reduce unnecessary truck deliveries. Within the retail sector, it can also be used to decrease customer trips to the store for items that were out of stock during their initial visit.

RFID can also increase the ability to account for, repair and reuse shipping containers returned through the supply chain.

To conclude

Not only can an environmentally friendly supply chain deliver a range of green benefits, but it can also offer many tangible business benefits such as enhanced competitiveness, better customer service, resilience and increased profitability.

It is of critical importance for today’s businesses to adopt as many technologies and processes with an objective of laying the building blocks for a sustainable future… for both the organisation, and the planet.

About the author
Beth Nicholas is a professional technology writer for Waer Systems – Warehouse management systems & supply chain software specialists

About the Author Staff Writer

Our staff writers come from all over the world, but one thing unites them - their passion for sustainability.

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