An understanding of RFID technology and a grasp of the limitations of current technology is helpful when evaluating the benefits of an RFID implementation and its potential impact on an organization. The initial benefits of RFID in a warehouse or distribution center environment will be mainly derived from automating manual processes and effectively using greater amounts of data. Still, these simple concepts provide varying benefits and solve many different problems. For example, using RFID tags to automate the receiving operation can not only reduce the labor cost for that function, but also enhance accuracy and help decrease the amount of time that a carton spends in a distribution center.

      At varying levels of RFID use, from pallet tagging to case tagging to item tagging, there are corresponding benefits that accrue. At the pallet tagging level, RFID offers improvements in product diversion, production planning, inventory control and storage, and vendor-managed inventory programs, among other places. At the case tagging level, RFID presents opportunities for improved demand and supply planning, theft identification, and pick, pack and ship control. In item tagging, RFID allows a variety of benefits, including store-level promotions and pricing, item theft prevention, and capacity planning, among many others.

      In order to achieve these benefits, distribution centers must match the benefits of RFID with the actual problems and limitations of their own operation. There will certainly be opportunities for quick wins in many organizations where the benefits are so simple to achieve that the decision becomes obvious. There can be tremendous returns in isolated areas of an operation along with opportunities for...

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