Improving Stock Management with RFID Technology

30th August 2012
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Tracking and locating the assets, stock or items of any worth is always a challenge for businesses of all sizes. Whether it be small items such as garments or printer cartridges, spare parts inventory to larger items such as whitegoods or even pallets – identifying, tracking and following such items through the business can be a logistical nightmare.

This situation can be improved upon greatly with the application of RFID technology. RFID is an acronym for Radio Frequency IDentification, and in simple terms is a wireless method of receiving data from a tiny tag affixed to an object via an electromagnetic field.

RFID systems will comprise of three main items. The first is the RFID tag which contain electronically-stored information that can be read using various RFID reader devices up to ten or more meters away. The information store is generally a long number, similar to the UPC barcode number – and is a unique identifier for the object which has the RFID tag attached. The second is the RFID reader – which can read the data on the tag and pass it to other systems. And the final item is the data processing system which can utilise the data in a useful manner.

The type of data stored on the tag will relate to the item itself, and the data processing system can then store matching item data including fixed properties like model number, size, colour, etc. Every time a tag is read, event data can be generated such as item location, time and date, or sale status. As RFID tags are read by radio signal and not a visual device such as a barcode reader – you don’t need a line of sight to read the tag data.

And thus the selling point for RFID – when items have the tags embedded or attached, they can be read while still within packaging, multiple units or behind other items in storage. Mobile computers with RFID readers connected to inventory systems can immediately match item tag data with the full record for that item, in the same way as a barcode reader.



If you’re still unsure of the benefits of RFID technology, consider the following situation. Imagine having a supplier embed an RFID tag into their product at the point of manufacture. Once the items are delivered to your warehouse, an employee can read the RFID tag using a portable reader, and assign your internal stock code to that item. As more items are received, they can be added to inventory as they pass by the RFID reader. When counting stock, an employee can merely waving the RFID reader near the items – all tags can be read and stock accounted for. And when an item leaves the warehouse, it can be read once more and removed from the system.

Thus with using RFID technology an organisation can track items from the moment they arrive until they leave. In doing so they will have an accurate knowledge of their stock levels and also reduce expenses, such as:

  • the cost of labour when stocktaking and locating items in storage
  • reduce write-offs due to inaccurate stock level recording
  • removing the possibility of incorrect product shipments
  • reducing the possibility of internal theft
  • missed sales due to stock retrieval delays

Furthermore, in organisations with multiple sites – tracking RFID tags can provide accurate information with regards to stock location and movement. This gives a complete picture of where items are located geographically in the organisation at all times from initial receiving to the point of sale.

Over time stock movement data can be analysed to find further efficiencies in the supply chain, including reducing the level of surplus stock (or “buffer” stock – when an organisation purchases more stock than should be necessary to make up for shortfalls with inventory management) and also understand transportation times again which can be used to reduce the stock on hand requirements.

All this and more can be made possible with RFID technology. The level of RFID integration is determined by the end-user, however once an organisation commits to accurately logging incoming items – the rest is simplicity.

LX engineers are very well-versed in a range of key technologies in this area, including active and passive RFID systems. For more information or a confidential discussion about your ideas and how we can help bring them to life – click here to contact us, or telephone 1800 810 124.

LX is an award-winning electronics design company based in Sydney, Australia. LX services include full turnkey design, electronics, hardware, software and firmware design. LX specialises in embedded systems and wireless technologies design. www.lx-group.com.au

Published by LX Pty Ltd for itself and the LX Group of companies, including LX Design House, LX Solutions and LX Consulting, LX Innovations.

LX GroupImproving Stock Management with RFID Technology

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