I was recently reading a research report from Aberdeen research about RFID and how it can improve the company’s performance in terms of inventory management and hence improve the operation efficiency. Current bar code systems are to be replaced with the RFID systems going forward since they are more efficient in many ways.

1. Information in the barcodes is limited

Lets take a specific example of a new book. The publisher takes an ISBN number for the book and then creates barcodes with that specific 13-digit ISBN number. For example,

Details of Book: The Wealth Of Nations

Book: The Wealth Of Nations
Author: Adam Smith, Alan B. Krueger
ISBN: 0553585975

ISBN-13: 9780553585971, 978-0553585971
Binding: Paperback
Publishing Date: Mar 2003
Publisher: Westland Limited
Edition: New title
Number of Pages: 1264
Language: English

9780553585971, becomes the official search for any thing linked to the book. If you see the supply / inventory management models linked to the book.

               How to Convert an ISBN to Barcode     Buy The Wealth Of Nations, Adam Smith, 0553585975

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But this model only hold information about a number which they have globally referenced. Places like a electronic store where more information on a particular capacitor is required this system is not valid because it is limited to books. If you have an RFID linked to it you can have more information on the spot.

Information storage : RFID tags > 3D barcodes > 2D barcodes

2. Inventory management is not so easy

In case where there is store manager of a popular chain like big bazaar, at any given time he will have 10,000 to 25,000 items in his store. Thousands are sold each day, lot more are brought in as inventory. In case the systems are integrate using bar code systems, there is a latency to collect up to date information.

3. RFID tags are convenient for tracking purpose

RFID tags can be used for tracking goods that are going in and out of the store. Baggage systems, packing systems etc will have great deal of advantage if they tend to use the RFID’s.

Now coming back to the report, though the report clearly mentions the usage of the RFID tagged systems is the best way forward there are some things which must be taken into consideration.

Educating the staff, bringing in inventory management systems that are based off RFID, process change etc are some of the main action points.

Lets look at the steps one has to take to upgrade the same,

1. Identify the right RFID system for your business.

Depending on the system you are working on, your requirement for an RFID will be different, Container shipments will have different RFID tags and reader requirements than an grocery store. Go for bulk purchase of the RFID tags.

2. Identify if you really want to move from barcodes to RFID’s.

Volatile inventories needs RFID kind of technologies, if you sell vacuum cleaners that are sold 1 in a day, i don’t you need an RFID upgrade on the warfront to implement in the next 3 months. you might as well wait.

3. Identify a RFID solution partner

You will have to upgrade you inventory management etc to take a full fledged move into RFID systems. All your real time decision making systems like SAP or likewise should support such systems. Identify a partner is very important. For example Roll of 15,000 (ALN-9654-FWRW) promises to give 15,000 tags for $1000. They are also reusable in nature. If you are moving 15,000 products in 1 month from your store, $1000 is definitive investment.

4. Make a slow transition

If you go an overhaul on emergency basis your system efficiency can break, first experiment on your low volatile inventory. Items that are sold less frequently. Then move on to the volatile elements of your inventory.


As the research report says you can see that non-RFID/Auto ID systems are showing a clear difference in all operational / productivity respects. As RFID tag prices showing promising decrease in the future, it can be said that Retail, inventory, shipments will slowly move into the RFID based mechanism.

Be advised, there are IP related concerns in the usage of such systems as they have been patented, like METHOD AND APPARATUS FOR RFID INITIATED INTERACTIVE RETAIL MERCHANDISING

With mobile phones and smart card readers hinting to come with this support, the consumer and the merchant seem to have favorable situations with the use of the technology.