Bracket International (BI) seems to be facing the dilemma that all corporations face in today’s technological age; when should the company invest into new technology. The new technology is exchanging the simple bar-code tag on product to a more up to date radio frequency identification device (RFID) system. The question that is most frequently asked is “when is RFID better than Barcodes. ” RFID is not necessarily better than Barcodes. The two are different technologies and have different applications, which sometimes overlap. So the question remains, when is it time to upgrade to a more sophisticated inventory control system.
Overview The main points that Mr. Bracket need to reflect upon when making his decision are as follows. * Net Sales have grown to $ 17 million but he currently need to carry a high inventory of $ 14 million to react to customer’s needs. * Bracket International had to deny a $ 2 million a year job order from Wolf Furniture because Bracket had problems adapting quickly to their changing requirements. * Bracket’s largest customer, Home Depot, uses an on-demand point of sale system which causes frequent changes to standing orders to Bracket International.
Home Deport has mentioned that BI needs to be more flexible. This could be a signal that Home Depot is looking at other manufacturers. * The cost to outfit all three BI factories would be approximately $1. 1 million. This price includes hardware, installation, software, training, and debugging services. Mr. Beckett also will need to take into consideration the ease of use, the ability to train his employees and ability to lower his inventory, which in turn would have a positive affect on the business as a whole. Advantages or Disadvantage
RFID technology enables manufacturers, distributors, and retailers to identify the exact location of their goods at any point in time. And better product visibility will enable the entire supply chain to be more focused on the end customer, producing and shipping goods based on demand and replenishing store shelves with products customers want to buy. Moreover, RFID technology can be effectively used to significantly reduce theft, loss, and time wasted trying to locate and account for valuable equipment. The big difference between the two is bar codes are line-of-sight technology.
That is, a scanner has to “see” the bar code to read it, which means people usually have to orient the bar code toward a scanner for it to be read. RFID tags can be read as long as they are within range of a reader. Bar codes have other shortcomings as well. If a label is ripped or soiled or has fallen off, there is no way to scan the item, and standard bar codes identify only the manufacturer and product, not the unique item. For example, the bar code on one milk carton is the same as every other, making it impossible to identify which one might pass its expiration date first.
Key advantages of and RFID system over basic Barcodes. | RFID| Barcode| Read Rate| High throughput. Multiple (>100) tags can be read simultaneously. | Very low throughput. Tags can only be read manually, one at a time. | Line of Sight| Not required. Items can be oriented in any direction, as long as it is in the read range, and direct line of sight is never required. | Definitely required. Scanner must physically see each item directly to scan, and items must be oriented in a very specific manner. | Human Capital| Virtually none. Once up and running, the system is completely automated. Large requirements. Laborers must scan each tag. | Read/Write Capability| More than just reading. Ability to read, write, modify, and update. | Read only. Ability to read items and nothing else. | Durability| High. Much better protected, and can even be internally attached, so it can be read through very harsh environments. | Low. Easily damaged or removed; cannot be read if dirty or greasy. | Security| High. Difficult to replicate. Data can be encrypted, password protected, or include a “kill” feature to remove data permanently, so information stored is much more secure. Low. Much easier to reproduce or counterfeit. | Event Triggering| Capable. Can be used to trigger certain events (like door openings, alarms, etc. ). | Not capable. Cannot be used to trigger events. | | | | (Atlas RFID Solutions website) Payback Possibilities Mr. Beckett needs to look at how this change will benefit his company. Implementation of the RFID system would allow BI to lower their inventory numbers. Simple forecast interactions programs with their customer will enhance BI’s capabilities to react to market changes.
The fact that the RFID system can read multiple tags at once thus reduces the human factor in the inventory control process. Bracket International would be able to shift their employee focus from inventory control to other areas in the organization. Bracket International states that their competitive priority is service first, followed be product quality and low cost. Although the initial cost of the RFID seem high, when you relate them to aiding in customer service, inventory and quality control, the cost seems rather reasonable.
Conclusion and Recommendation I feel Bracket International should take the necessary steps to convert to a RFID system. They have already lost a $2 million a year contract and their largest customer is voicing concern of Bracket’s ability to meet their needs. The upgraded system will improve inventory control, adapt faster response to customer needs and allow Bracket to use its capital resources more efficiently. I would recommend that both system be ran in parallel until the RFID has been integrated in to all the factories.
This may seem as a little ‘over kill’ but it will give Bracket International a chance to incorporate inventory and order information from all three factories while the implementation process is in its installation and ’debugging’ stages. I feel the transition should be done in a two stage implementation process. The first stage would be to install the RFID technology on the factory in South Carolina that specializes in small custom orders. This facility seems to be the smallest of the three, so Bracket will be able to react quickly to any installation and execution problems.
Bracket would basically be ‘working the bugs out’ on the first installation. I feel the RFID installation in all three plants should take approximately 9 – 12 months. In conclusion, I strongly believe Bracket International should proceed in the installation and upgrade in their inventory control system. It would benefit their customer service, give the corporation a better control on inventory, and become a reliable forecasting for meeting the changing needs in the future. Works Cited Atlas RFID Solutions website. (n. d. ). Retrieved July 7, 2011, from Altas RFID Solutions: http://www. atlasrfidsolutions. com/Technology/RFIDvsBarcode. aspx