Inventory Managment and RFID
I have been reading a lot lately about inventory managment. In general, inventory stocking systems can be divided into four categories: memory, fixed, zone and random stock systems. Each system has its place in the inventory managment world, and one in particular could benefit significantly from RFID implementation.
A fixed stock system assigns a location to each stock-keeping unit (SKU) within a warehouse. When a new widgit comes into inventory, it goes with all other widgits which share its SKU. This stocking systems provides the most systematic layout for inventory, and it assures a well-organized warehouse. However, it also dictates that each stock location must have capacity for the maximum quantity of inventory of that unit at any given time. Invariably, this results in having a warehouse which is much larger than is necessary. Memory stock systems rely on the memory of a small group of stocking employees. The employees put stock where it will fit and rely on their memory for picking at a later time. Obviously, this provides for an efficient space utilization, but has weakness tantamount to the reliability, availability and sometimes attitude of the employees. In a zone system, items are grouped together by type or size and can be thought of as a cross between the fixed stock and random stock (which I will return to) approaches. Zone stocking has its place, but it can lead to honeycombing—a type of inefficient space utilization—and other problems.
Lastly, there is the random stock system. A random stock system is similar to the memory stock system with one key difference. Unlike the memory stock system, where employees use their memory to locate stock position, a random stock system uses a detailed, accurate and up-to-date database system to catalog each item along with positioning information. Records management within a random stock system is paramount, as the accuracy of positioning information must be accurate to ensure efficient stock picking. What was once done by transaction—using something like a stock movement card—can now be automated real-time by implementing RFID. Rather than having employees make notes or scan barcodes during inventory movement—whether it be storing, re-locating or picking—RFID can be used to accurately read tags embedded on pallets, cases or items. Interrogators can be placed on material handling equipment, at common entry/exit points and throughout a facility to capture temporal and spatial positioning of a given item.
