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Converting barcodes to RFID saves labor costs and product losses

News posted on: 2019/11/19 1:47:24 - by Margaret - RFIDtagworld XMINNOV RFID Tag Manufacturer

Converting barcodes to RFID saves labor costs and product losses

Converting barcodes to RFID saves labor costs and product losses

According to a foreign paper, a Turkish denim manufacturer uses RFID technology to reduce labor costs and product losses.

The researchers estimate that the monthly labor cost savings totaled 5,454 euros ($6,059) and the product loss could be reduced to 15,625 euros ($17,357). The manufacturer's initial investment is 312,233 euros ($346,852), producing 2 million denim products per year. As the cost of deploying RFID technology is gradually decreasing, the manufacturer's input costs and output will change accordingly. The company is currently transitioning from a bar code system to an RFID system to track its ongoing work orders.

Part of the research involved determining whether RFID tags could survive the harsh denim production process, including wear, cleaning, and baking at temperatures approaching 300 degrees Fahrenheit. The researchers tested the silicone, plastic and epoxy labels and thought that the epoxy labels were the easiest to attach to denim and survived the production process.

The cost savings due to reduced product loss will vary depending on the baseline of any particular organization for that particular issue. The earnings analysis of this paper estimates that the product loss rate is reduced by 50% and savings of €187,500 ($208,289) per year.

The paper concludes: “The item loss rate is an important parameter for denim production because the product loss and associated cost factors account for a high percentage of the total process cost value. The loss rate and error rate before using RFID are 2%; And the use of RFID has cut it in half."

The researchers also found that the staff required for RFID scanning was about half of the bar code scan. The factory needs 18 employees to handle barcode reading, but only 10 can perform RFID scanning. The final cost comparison includes the labor required to sew RFID tags and remove tags before shipment.

Throughout the production process, RFID-embedded denim will communicate with eight RFID readers throughout the plant to provide real-time location information.

Many large companies have begun using RFID for inventory tracking. Target Corporation cited this technology in 2016 to improve its labor and inventory cost management. Nike CEO Mark Parker praised, "RFID provides the most complete inventory view we have ever had."

More and more organizations are beginning to consider how to use RFID technology to handle product losses. Among them is the A-1 Packaging Solutions Company, which filed a patent application earlier this month that will use RFID tags to communicate with warehouse transportation equipment in inventory management to help workers find misplaced inventory. 


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