In order to improve productivity and control, warehouses are seriously considering the use of radio frequency identification (FRID) tags for day-to-day operations. This wireless technology increases efficiency of warehouse management because, unlike bar codes which must be scanned manually to feed in the information on the computers, RF tags broadcast a signal with information about the product they are attached to and about the location of the product in the warehouse. RFID technology provides an interesting option to complement data collection and product identification in the supply chain management and warehouse operation.

The main purpose of using RFID is to increase warehouse efficiency by reducing labor and logistic costs that are otherwise skyrocketing and provides ever-increasing pressure on profit margins in today’s competitive environment. It is cost-efficient because the warehouses can now streamline several operational areas inside their premises. For example, picture a typical warehouse where staff receives boxes of stock accompanied by paperwork detailing items in the delivery. Staff members then manually check each box’s contents against the manifest. The drawback of this method is that store staff can not see what items are in which box, or whether items were missing until each box had been individually checked. Many of these operation areas might benefit from radio frequency (RF) communications technology. This wireless technology in warehouses can help establish a simple paperless, on-line communication between operations and the staff’s computer.


A wireless warehouse, that uses RFID Technology, works by linking warehouse workers to the back-end warehouse management application server where warehouse activities are being recorded via wireless handheld devices, scanning bar codes or RF tags attached to the pallets. These devices help employees to identify where to pick, put away, count, or move products within the plant. This translates to a better control over the movement and storage of materials within the warehouse by maximizing the efficiency of the receipt and shipment of goods, optimizing warehouse space utilization and knowing at all times exactly where goods are stored, allowing employees to improve and maintain high customer service levels.

Present Challenges for Managers Capabilities of RFID system Business Productivity Improvements
  • Too much manual effort
  • Long time taken for re-conciliation
  • Losses due to erroneous entries & recording
  • No reliable mechanism to check current inventory levels
  • High operational cost piling on the pressure in addition to increased competition
  • Reduced inventory errors through automated recording and data capturing
  • Provide timely and accurate information for invoicing, dispatch, PO and inventory
  • Integration of data with the ERP
  • Strengthen the security against theft, loss & counterfeiting
  • Automatic Alerts for low Inventory
  • Increased Efficiency
  • Reduced warehouse and distribution labor costs
  • Real-time availability of accurate data facilitates improved decision making
  • Uncompromised Security
  • Strengthen the security against theft, loss & counterfeiting
  • Reduced inventory errors
  • High customer satisfaction & return business levels