The distribution center requires speed and accuracy; but, single-piece identification slows the processes of receiving, stock-taking, picking, and packing as volumes increase. This can result in additional costs and shipping errors.
RFID provides an opportunity to quickly identify multiple tagged items and match them against inventory or shipment records.
This guide describes the applications of RFID in distribution, the factors affecting its capability, and ways to validate the right configuration to deployment.
What Is RFID in Distribution?
RFID for distribution involves tracking products and logistics assets from the distribution center to the store, hub, customer, or return location.
Tags can be attached to products, cartons, pallets, roll cages, and reusable shipping containers. Readers read each tag ID at specific checkpoints, after which the back-end system associates the ID with the relevant SKU, order, customer, or shipment.
RFID in Warehousing vs. Distribution
| Area | What Does It Cover? | Applications |
| RFID in warehousing
| Products within the warehouse | Product receipt, product storage, inventory, picking |
| RFID in distribution | Products destined for delivery or return
| Packaging, loading, dispatch, transfer, returns |
The main point here is that warehousing deals with products stored in the warehouse. Distribution involves products in transit.
How Does RFID Work in a Distribution Center?
UHF passive RFID systems are commonly used in distribution centers since they can scan several tags without needing a direct line of sight. The technology is effective at dock doors, conveyor belts, pallet lanes, and stock-checking areas.
Radio waves are sent by the reader, and an ID number is returned by each tag. The middleware filters out any duplicates, and then the WMS or ERP system compares the data to the expected inventory or order. If there are supposed to be 20 cartons but only 19 are scanned, then there’s an inventory shortfall.
Fixed Readers vs. Handheld Readers
Fixed readers are effective at static locations such as dock doors, tunnels, conveyor belts, and packaging stations. They read the tags as the goods move along.
Handheld readers can be more effective for checking inventory, searching for items, and checking pallets where people need to move about. Some distribution centers have both fixed and mobile readers.
Where Is RFID Used in the Distribution Process?
RFID performs best when a read either verifies the completion of a process, updates inventory, or spots an issue.
RFID Receiving
A dock portal can scan tagged cartons/pallets against a purchase order, ASN, or supplier information. When 40 cartons are ordered but only 39 arrive, the issue can be resolved prior to completing receiving. Make sure that the inventory near the dock portal is located outside the read range.
Put-Away and Location Tracking
Forklift or handheld readers can scan the pallet tag and location tag simultaneously. As soon as Pallet A is scanned along with location B12, the WMS will register location B12 as the latest location of Pallet A. Passive tags require a location tag, stationary zone, or forklift trigger to generate this location information.
RFID Inventory Counting
A handheld reader can read multiple tagged units immediately and perform quick counts of apparel, parts, and any other item-level products. Metal racks, liquid containers, densely packed units, and poor tag placement decrease UHF read rates. It’s critical to test the RFID installation in the actual storage area prior to establishing count goals.
Picking and Packing Verification
At the packing station, RFID verifies tagged units against the order before sealing the carton. For example, if six units are needed but only five are found, the missing item will be flagged. Like the verification requires accurate order information and correct mapping of tags to the product.
Cross-Docking and Sortation
In cross-docking operations, RFID can scan and associate the ID of the pallet upon arrival with the correct lane or shipment route. The faster the conveyor or forklift moves, the shorter the time available for the scanner to read the tag. So it’s important to evaluate the actual speed, the size of the load, and the placement of the tag.
Outbound Shipment Verification
Dock-door scanning can be used to verify that loaded cartons or pallets match the shipment manifest, the vehicle, the route, or the customer order. If there’s a pallet for customer A at customer B’s dock, this can be detected before the vehicle leaves. Proper antenna placement and shielding can minimize reads from adjacent staging locations.
What Are the Benefits of RFID in Distribution?
Batch scanning makes receiving, inventory counting, and shipping easier since multiple tags can be read together. So, one-by-one scanning is eliminated, and it’s easier for workers to handle errors.
In addition, RFID increases the visibility of inventory and shipments. It facilitates finding lost inventory, detecting missing cartons or misloads, and monitoring reusable pallets, boxes, and roll containers.
The major advantages are faster scanning, fewer shipping errors, lower labor costs, and asset protection.
RFID vs. Barcode in Distribution
Both RFID and barcode systems can identify items, but each has its own strengths.
| Factor | RFID | Barcode |
| Line of sight | Not required | Required |
| Reading | Reads multiple tags together | Scans one code at a time |
| Automation
| Suitable for portals and lanes | Usually requires manual scanning by personnel |
| Label cost | Higher | Lower |
| Metal and liquids
| May hinder UHF reading
| No effect from radio frequency interference |
| Unique identifier | Serial IDs supported | Also supported |
| Backup system
| RFID system usually paired with a barcode system | Quick manual scan |
Choose RFID if batch reading or automation will save enough labor or prevent enough mistakes to cover the cost of more expensive labels.
What Does an RFID Distribution System Include?
Complete RFID distribution systems have the following components: tags, readers, antennas, reader stations, a printer/encoder, middleware, and WMS/ERP integration.
RFID readers are used to read tag data at dockside locations, on conveyors, on forklifts, or wherever needed. Middleware eliminates duplicate data generated by a single scan and creates one clear event, such as “Pallet 123 exited Dock 4,” that goes to the backend system.
How Do You Choose RFID Tags for Distribution?
Select tags according to the product, package, and read location. Test the material, mounting area, tag location, durability, and reader location.
Metallic surfaces may need on-metal tags. Products containing liquids may need tags in locations that minimize UHF interference, while exposure to high temperatures, moisture, oil, or chemicals requires durable tags.
When selecting RFID tags for pallet monitoring, test the entire loaded pallet since densely packed pallets have lower read rates even if a single carton reads well.
RFID Standards and Data in Distribution
The data associated with RFID includes the tag identification number, the business transaction data, and the movement event. The WMS or ERP associates each identification number with information such as the SKU, batch, order, customer, or destination.
The GS1 standards that use these codes include SGTIN, SSCC, GRAI, and GIAI. The EPCIS standard tracks what was moved, how it moved, and what kind of business transaction happened.
Real-World RFID Distribution Example
During outbound shipping operations at the dock, RFID can compare the mixed carton load with the ERP order list.
If a carton is missing or belongs to another order, the discrepancy will be flagged by the system prior to shipping. This enables the problem to be fixed prior to loading the truck.
What Are the Limitations of RFID in Distribution?
RFID is not GPS. Passive tags log when products go past a certain checkpoint. Continuous tracking requires either more reading checkpoints or other location technologies.
Metal, liquids, dense products, and poor tag placement can interfere with UHF reading capabilities. The reading range depends on the type of product, the tag, antenna design, movement speed, and environmental conditions.
Reading failures, cross-reading, incorrect tag association, and outdated shipment information can still create problems. Changes in packaging require testing again, and WMS integration demands guidelines on how to address these problems.
How to Implement RFID in a Distribution Center
Associate the RFID initiative with one issue only. For shipment mistakes, measure accuracy, mistakes, returns, rework, and loading times; for inventory counting mistakes, measure counting times and inventory discrepancies.
Select what should be tagged and at which points each reading should be taken. Conduct trials using actual products, whole pallets, racks, and usual movement speeds.
Test at just one dock, one area, or one product category. Compare outcomes with the current system, address deficiencies, and then expand.
How Much Does RFID in Distribution Cost?
RFID deployment costs are determined by the quantity of tags, readers, antennas, portals, printers, and software integrations needed for the project.
The cost factors include one-time costs such as testing, hardware, installation, integration, and training, as well as recurring costs such as labeling, software, maintenance, support, spare parts, and testing of new SKUs.
ROI will be computed by determining the savings from reductions in labor costs, shipping errors, return costs, asset losses, and faster inventory searches. Improper read-zone design or poor integration can raise the cost of RFID deployment despite affordable hardware.
Which Industries Use RFID in Distribution?
Retail and Apparel Distribution
Item-level RFID speeds up the counting of large quantities of merchandise, outgoing cartons, and returned goods. It also helps match these items with inventory records. RFID is especially useful in apparel distribution centers, where large numbers of items move in and out every day.
E-Commerce Fulfillment
RFID helps ensure that all picked and packed items match the customer’s order before shipment. This is useful during peak order periods.
Third-Party Logistics
In 3PL operations, RFID can separate client inventory, verify shipments and deliveries, and track reusable pallets and packaging. Each scan records the time and location of the item in the client’s account.
Automotive Parts Distribution
RFID tags can be used on parts, bins, racks, pallets, and returnable packaging. Scans at storage and dispatch points help match each part with its location, order, or delivery route.
Food and Beverage Distribution
RFID helps match batches, expiration dates, crates, pallets, and reusable equipment with warehouse records. Products with high water content may require additional UHF testing because water can absorb radio signals.
Healthcare and Pharmaceutical Distribution
RFID can be used to verify serial numbers, batches, expiration dates, and high-value products. This improves traceability when checking inventory, managing recalls, and verifying goods.
Industrial and Chemical Distribution
RFID can be used to track tools, cylinders, IBCs, and metal containers. On-metal tags are needed for metal surfaces, while durable protective casings may be required in environments with chemical exposure or rough handling.
Frequently Asked Questions
How is RFID used in distribution centers?
RFID systems monitor tagged items from receiving through storage, picking, packing, loading, and shipping. The system can read multiple tags together and associate each read with the stock/shipment records.
Is RFID better than barcode for distribution?
It depends. RFID performs better for batch reading and automated checks without requiring line of sight. However, barcode technology is cheaper and suitable for one-to-one checks.
What RFID tags are used for pallets?
Passive UHF RFID tags are commonly used for pallet tracking. Special kinds of tags and tag positioning should be considered in the case of metal and/or liquid loads. Testing is required.
How accurate is RFID in a distribution center?
It depends on a number of factors: the RFID tag, the material of the item, the read-zone design, the RFID reader position, and the speed of item movement.
Can RFID read through cardboard boxes?
Yes. UHF RFID can read through cardboard packaging in most warehouse settings. The RFID signal is affected by metal or liquid materials rather than cardboard packaging.
Conclusion
A solid RFID system requires a well-defined distribution requirement. Define the need for tracking, the read location of each item, and your desired outcome, like quick receiving or fewer shipping mistakes.
If you need to select tags or run pilots, send JLTRFID your product or pallet type, read location, and required reading range. We will advise on appropriate tags, send you sample tags, and conduct tests.
