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RFID in international supply chain management

International import of apparels and textile products can be a logistic nightmare. However, the use of RFID can reduce the problems to a great extent.

Author: Roksana Parvin, Supply chain management professional from Bangladesh

International production of apparels and home textiles involves complex and multi-faceted supply chain challenges. Most probably, the t-shirt you buy at Wal-Mart is made in Cambodia, the jeans available at Kappahl are made in China, the jackets at Tesco are from Vietnam, the formal shirts at Metro are from Bangladesh, the sports ware at Nike are from Thailand and the bed covers available at Hemtex are produced in Indonesia. In other words, the majority of the clothes sold in the Western countries are made somewhere else, usually in Asia. And it's a huge and complex logistical challenge to track and control the international shipments and inland transportations of the products.Let's imagine the international production and supply chain scenario between a European retailer (here referred to as 'buyer') and their production partner (here referred to as 'producer') in Bangladesh. The buyer places an order for one million t-shirts to the producer. The producer makes the t-shirts on time, and then washes, irons, and packs them into individual packages. And then the logistical nightmare begins.

IT'S A CHAOS IN THE COUNTRY OF ORIGIN

As soon as production is complete, the individually packed t-shirts need to be packed into cartons. One carton can contain 20 t-shirts, so for 1 million t-shirts (which is considered a standard purchase), we are talking about 50,000 cartons. Now, all these 50,000 cartons need to be sent to the warehouse of the freight forwarder 300 kilometers away. But hey, wait! Before dispatching them from the factory, there are a few more things to do. T-shirts of the same size are put in the same carton and there are seven different sizes. On top of that, the t-shirts come in six different colors, and the colors should not get mixed up. So, the 50,000 cartons need to be accurately sorted into 42 different groups, before they are loaded into trucks and leave the factory gate.

Next, the cartons arrive to the warehouse of the freight forwarder. Bangladesh is one of the top three exporters of garment products in the world, so a standard warehouse may already contain 5 million other similar cartons for different buyers. And the cartons should not get mixed up. Again, a complex logistical procedure starts. Sort the cartons, load them into the containers in a special sequence, and place the containers on the ship. And after a voyage of 17 long days, the containers finally arrive in Europe.

Shutterstock _60682792_cartons _web

THE SITUATION IN THE DESTINATION COUNTRY IS NO BETTER

Problems solved? Not quite yet. The buyer takes the containers to their own warehouse/distribution center. They open the containers and find 50,000 cartons with 1 million t-shirts in them. The next task is to distribute the cartons to the 300 shops that the buyer owns around the country. But simply dividing 50,000 cartons into 300 lots and sending one lot to each shop, is not the solution. It's much more complex than that. The buyer needs to check that each lot contains the right amount of t-shirts of each size and color. That means solving a puzzle of 50,000 cartons, which contain t-shirts of six different colors and seven different sizes and need to be divided into 300 correct lots. The size of the lots is not equal and is determined according to the demand of each individual store. And, in most cases, all these logistical procedures are done manually, by reading the individual barcode labels printed on each carton. A real nightmare, huh?

THAT WONDERFUL LITTLE THING CALLED RFID 

Basically all these problems can be solved to a great extent by using RFID (radio frequency identification) tags. RFID tags are small electronic devices that use electromagnetic fields to transfer data to RFID readers.

RFID can make significant contributions to ease production and supply chain problems in the apparel and textile industry. The RFID tags are attached to the garments during production; they are then traced throughout the whole supply chain. There is no need to remove the tags from the product afterwards, but if the customer wishes, they can be deactivated/killed at check-out. Let's consider the situation we were talking about earlier. If the producer had attached RFID tags on all 1 million t-shirts during production, it would have been much easier to trace and count the products, sort them appropriately and dispatch them from the factory in an efficient and time-saving manner. When the cartons are delivered to the warehouse of the freight forwarder, the risk of mixing them up with products of other buyers would have become close to zero, and no cartons would have been missing during the loading of cartons into the container, or in the loading of containers on to the ship.Each RFID tag has its own identity, which means it helps monitor all items on an individual level. In the future, its probable that buyer will use only RFID tags on their products replacing barcodes completely. With an RFID system more data can be stored and analyzed, which helps other interest groups within the company in the decision making. Not only that, with RFID the buyer does not need to sort the products at the distribution center, as the RFID tag will tell them which product goes to which shop. 

Therefore, if RFID tags are attached, all that the distribution center needs to do is to send the ready-packed products to the designated shops. No need to re-pack them at the distribution centers.

When the buyer chooses to tag the products at production, the tags can be utilized throughout the whole supply chain as well as in production. But there are other alternatives as well:

 Where -to -tag -in -fashion -supply -chain2

In the picture above you can see at what points of the supply chain RFID tags can be attached; at 1) production, 2) distribution, or in the 3) shop backroom. 

Sometimes buyers are very particular about their products, especially if it is a brand like Nike, Puma or Adidas. The products need to be scanned at each and every point along the journey. This is a challenge without RFID: After filling all the cartons with garments, the cartons' and/or garments' barcodes need to be scanned during loading to the truck, after reaching to the logistics/shipping company and then again during stuffing. And, if one carton is accidentally scanned twice, it is a real mess when the logistics company personnel tries to send the scanned notification to the buyers end. And don't even ask about the time it takes. Scanning the barcodes one by one at every point and takes a lot of time and that is not the end of the scanning. The barcodes are also scanned during unloading from the container and after reaching the distribution center.

With RFID it will take only 3 to 4 minutes to scan at each point during the journey and it will not make any difference if one carton gets scanned twice by mistake. The system will know, since all tags are unique.

SUMMARY OF THE BENEFITS OF IMPLEMENTING RFID IN INTERNATIONAL SUPPLY CHAIN LOGISTICS

  1. An RFID tag can be read from a distance, as long as 8 meters, without a line of sight. This helps to improve time management in the country of origin, at the logistics/shipping company, at distribution and finally at the store.
  2. The supply chain of items becomes more visible, which enables more efficient tracing of internal shrinkage. American Apparel, a US vertical retailer, has reported a 55% drop in internal shrinkage since they implemented RFID.
  3. With RFID a logistics company/shipping company can track the container and inform the buyer where the products are and how long it will take to reach the destination.
  4. With RFID tags, it is easier to detect counterfeit products. By giving all authentic products an individual ID, fake products can easily be spotted. 
  5. Thanks to the information gathered with RFID, the buyer can make their selling strategy more accurate.
  6. When the products reach the destination, the buyer just needs to pick them up. As the RFID tags are attached to the products and ready for scanning, there is no need to recount the cartons or products again manually.
  7. The staff can find cartons/items easily if they are misplaced and put them in their right place.

CONCLUSION 

Although new technologies might be scary, RFID is one of those technologies that need not be. Implementing RFID will on the contrary make the working day of the staff of the supply chain easier to manage. RFID tags can be attached on individual products, but that is not all. Tags can also be attached on cartons to get higher level information, or they can even be placed inside containers to track them individually. Each situation is unique, and so are their solutions! However, the common denominator for all cases is always there: RFID reduces production and supply chain management problems to a great extent.

 

8 comments on “RFID in international supply chain management”

  1. Posted 23 April 2013 at 13:33:40

    ... and even more is coming over the horizon.

    Like integrating RFID with sensors to monitor if products stay within the bandwidth of their acceptable environmental conditions (temperature, humidity, light); partly already commercially available like the Tempos cards for pharma products.

    Integration of a vibration sensor (to detect damages in parcels) is also possible, though at a price.

    We also see integration with GPS, though not (yet?) on item level but on container level.

  2. Posted 24 April 2013 at 15:52:55

    That would be interesting- how rfid can be seamlessly integrated with gps on a container or even item level...

  3. Gravatar of Hanna ÖstmanHanna Östman
    Posted 29 April 2013 at 14:05:01

    Sensor-tags and GPS are both entering the RFID world in a fast pace. It will be interesting to follow the development.

  4. Gravatar of Jimmy WilsonJimmy Wilson
    Posted 24 August 2013 at 19:15:53

    Apparel Tag reading distance,material, and cost base should also take into consideration before mass implementing into this international supply and logistics appliaction, the inventory tracking and management application.Smooth surface and high performance inlay laminating into this tag attached to the apparel and personnalized tag sticked to the carton and pallet. Maybe we can help you do a lot in this level to all the world wanters.

  5. Gravatar of Mohammad Mazbha UddinMohammad Mazbha Uddin
    Posted 22 September 2014 at 12:02:04

    how it (RFID) can help retail store?

  6. Gravatar of Kirsikka DrägerKirsikka Dräger
    Posted 25 September 2014 at 09:26:10

    Hello Mohammad, RFID technology can lead to immense benefits for retail. Check this article covering the 5 most common applications on the shop floor: http://www.rfidarena.com/2012/12/13/rfid-%E2%80%93-5-most-common-applications-on-the-shop-floor.aspx

  7. Gravatar of SamiSami
    Posted 27 January 2016 at 21:30:33

    A bit old story, is it so that not much has happened since publishing this article almost 3 years ago?

  8. Gravatar of KirsikkaKirsikka
    Posted 15 February 2017 at 16:30:47

    Hello Sami,

    this is not the most recent entry, you are right. Nevertheless, one of the great things is that the basics of RFID still apply. The sky is the limit in regards of the versatility and possibilities of RFID implementations. Nevertheless some basics remain very interesting even over time.

    BR,

    Kirsikka

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