Production and Inventory

Category: Radio, Walmart
Last Updated: 28 Jan 2021
Pages: 4 Views: 40

Radio Frequency Identification is a tag like object applied to or incorporated on a product, animal or person to make it easy to track or identify them in any given situation. It uses radio waves to transmit signals to the receiver in two ways. One is the active way in which the transmitter is fitted with a battery and transmits to the receiver intermittently. The second is the passive way which provokes a response from the receiver when it comes within its range. Both of these methods are used extensively today by organizations to keep track of anything and everything they need to keep an eye upon.

There are multiple reasons why Radio Frequency Identification is such a good investment for companies. A few of these arguments are listed below: Preserving revenue: this is the critical component involved in making Radio Frequency Identification such a hit in the industry. It can help in preserving revenue by minimizing your inventory. It is a bit like a new form of computerized based inventory management which came in existence a few years ago, but this is much smarter and much more efficient.

It will help keep your shelves stocked by minimizing items in the inventory keeping view the lead time for acquiring specific items. Building consumer loyalty: a consumer is only loyal to a store when he can always find what he needs from the store. This is the nub of the Radio Frequency Identification tag. It will make sure that shelves keep stocked and the consumer never has to leave the store without having an item they wanted if the store keeps it, that is. Assure quality in products: one of the key areas where traditional computerized systems are struck dumb is with expiration dates.

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There is not enough sophistication in current computerized inventory management systems to keep track of expiration dates. This is why till today companies themselves go to extreme lengths to make their distributors collect expired products from each store manually. This is a huge loss for companies have no other choice as they would lose their customer trust if they make expired products available for selling in store. This is where Radio Frequency Identification comes into play. It has got complete product information embedded into the tag and it constantly keeps updating itself with the receiver.

Hence any expired products will be notified to the inventory manager immediately and he can take prompt action. For any company, existence in the market is top priority. But for existence every company needs constant revenue. Now it is the company’s objective how to get that revenue. The most important factor is to reduce the amount of revenue needed for existence so the rest of the revenue can be reinvested or given off as dividends to stakeholders and gain more reputation in the market. Radio Frequency Identification is helping companies do just that.

Wal-Mart is one of the prime examples who is using this technology at its fullest and encouraging its partners to do the same to gain competitiveness and market share as a result. A recent study showed that Wal-Mart used Radio Frequency Identification to significantly reduce inventory downtime form stock turnover (Hardgrave, 2005). It is expected that retail chains will have the most advantage by using Radio Frequency Identification in their daily inventory management procedures. This is due to the industry’s increasing demand for speed, efficiency and quick response from the supply chain (Chen, 2004).

The current technology is helping the industry in a lot of positive ways. Certainly I think that today in the highly complex world of microchips and Radio Frequency Identification being used so widely, companies can finally have a stab at managing a big chunk of its inventory and production. From the start of this essay, I have been explaining how easy Radio Frequency Identification has made things for managing inventory and production. It is all operated by a computer and needs very little guidance.

This means that it will require minimal man power to operate and is certainly not going to make any mistakes, since it is a computer. So in the world of today where companies are looking everywhere on how to cut down costs without damaging their goodwill in the market and talking about ‘smart solutions’ and all the rest, I think this may well be a very interesting option for them to carry out.


  • Poirier, C. C. , (2003) Using models to improve the supply chain. CRC Press
  • Hardgrave, B. C. , Waller, M. , & Miller, R. (2005). Does RFID reduce out of stocks? A preliminary analysis. Fayetteville, AR. University of Arkansas, RFID Research Center, Information Technology Research Institute.
  • Chen, Y. -H. (2004). Getting ready for RFID. OR/MS Today, 31(3), 30-35. Koh, C. E. ,
  • Kim H. J. & Kim E. Y. , (2005) The Impact of RFID in Retail Industry: Issues and Critical Success Factors retrieved June 5, 2009, from http://www. reuw. washington. edu/JSCR/2005Articles/JSCRV13_1A5ImpactRFID. pdf
  • SkyeTek (2009, June 5) Inventory Management. Retrieved June 5, 2009 from aspx

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Production and Inventory. (2020, May 12). Retrieved from

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