Attributes where inventory visibility is most needed
Examples of items for which inventory visibility is critical include:
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- Vendor managed inventory or consignment sales where overstock and under-stock items may have a significant financial impact on the supplier company
- Items with high variability of consumption rate which makes it difficult and expensive to ensure inventory availability by maintaining an overstock of the items
- Items with many different SKUs but only a small number of each SKU needs to be on hand at any point in time – this increases the likelihood of running out of a specific SKU
- Items which an out-of-stock event has an associated large cost/penalty – example, the entire production line shuts down if an item is not available
- Perishable items with limited shelf-life and where the order of consumption is important
- Items that are subject item-level or lot-level recall
How can RFID and barcode scanning help?
A RFID or barcode scanning system can augment the existing inventory tracking systems of record by automatically detecting and reporting the movement and consumption of inventory – thereby eliminating the need for manual data entry at points in the supply chain. Simply moving an item from one location to another during the normal material processing flow is all that’s needed for the system to track the inventory.
Timely and accurate replenishment orders can be automatically generated based on policies configured in the system for each item. The quantity of inventory maintained for any given item (and the associated floor space) can therefore be reduced without increasing the risk of out-of-stock events.
Scanning touchpoints can be located on the company’s manufacturing floor, supply rooms, warehouses, or any other location within a company. For inter-company inventory visibility scenarios, scanning touchpoints can be installed in remote locations at a supplier’s customer facilities. In the latter case, the remote scanning equipment connects with the central Spotlight server over the Internet.
Depending on the inventory items being tracked, individual items may be tagged and scanned, or in the case of small parts and other consumable supplies, reusable storage bins may be scanned as parts bins are emptied. In either case, the supplier receives the inventory visibility information needed in real time to immediately create replenishment orders or take other actions as appropriate.
RFID technology can allow “hands free” detection of inventory movement. For examples, RFID portals can be configured at choke points to automatically detect the movement of items between one physical zone and another with no operator interaction required. RFID-based kiosks can installed to scan reusable parts bins as they’re emptied and placed in a recycle location. Minimal or no staff training is required for either the company or their client customers to use the system. Barcode scanning, while not completely hands free, is a simple operation that also requires very little training or data entry skills.
“Error proofing” logic can be added to the system at key touchpoints in the supply chain. For example, an alarm can be signaled immediately if an item is moved to an incorrect location or an expired, recalled, out of order item is scanned at one of the touchpoints. Alerting the staff to correct errors immediately at the time they occur can significantly reduce the exception processing and related overhead that otherwise results to correct the errors later in the workflow. Real time metrics and key performance indicators are also available from the tracking system to support continuous process improvement.
In summary, RFID or barcode scanning can augment existing inventory tracking systems of record by automatically detecting and reporting the movement and consumption of inventory. All the features and capabilities described above are available for both the intra and inter company scenarios. Depending on a client’s specific inventory visibility needs, S3Edge can deliver the turn-key tracking solution needed.
