In North America alone, billions of dollars of food spoils before reaching customers each
year. In the pharmaceutical industry, temperature-sensitive products are regularly damaged due to inappropriate shipping and storing conditions. It is no secret that inventory spoilages directly affect a business’s bottom line and customer service level. The good news is that with smart inventory-management solutions, enterprises can monitor the location and storage environment of perishable inventory to minimize spoilage and associated financial losses.
RFID and IIoT: shelf-lifesavers
Food, pharmaceuticals, chemicals, nanomaterials and other products with limited shelf life require constant location traceability and storage-environment monitoring. To gain better visibility into the location and the condition of perishable inventory items, businesses can turn to RFID and IIoT technologies.
RFID technology enables the digital data encoded in RFID tags to be transmitted to an RFID reader via radio waves. There are passive and active RFID tags. Passive tags require power from an RFID reader, while active tags have their own power source, which enables them to constantly broadcast the radio signal. For tracking perishable inventory, it is reasonable to use passive RFID tags—they are smaller, thinner, more flexible, and have a considerably lower price.
To enable reading, an RFID reader sends out radio waves. The RFID antenna of a reader relays these waves to the tag. The RFID tag receives the power from the reader and sends back a radio signal carrying its digital data. The reader converts the waves from the tag into digital data and passes it on to the cloud for further processing.
IIoT efforts enable us to turn the data from sensors and/or RFID tags into meaningful insights about the location, status and condition of the perishable inventory items. We can take in sensor readings or the data from RFID readers, runs it through analytics algorithms and visualizes the findings. For instance, a warehouse specialist can view a real-time map of perishable items’ locations and storage conditions.
Along with reporting and visualizing capabilities, IIoT systems can be set to alert users of particular events. If the temperature at a warehouse is going beyond a critical threshold, an IIoT system can send notification to a warehouse worker’s mobile application, encouraging them to adjust the cooling system.
Likewise, warehouse workers can use mobile applications to request information from an inventory-tracking system’s database, or manually control the inventory-tracking system. For instance, an inventory specialist can request data about how many items of a particular SKU have less than 30 days until expiration.
Along with the possibilities of manual control, IIoT systems can be set to function with some degree of automation. If the amount of a particular SKU is not enough to meet the production goals, an IIoT system can automatically send a replenishment order to a supplier.
Similarly, with advanced data-science techniques, IIoT initiatives can carry out predictive tasks. Based on the analysis of a particular product’s shelf life, past shrinkage rates, current production volumes and other context information, the machine-learning component of IIoT can create a predictive model that forecasts an optimal amount of a particular product required for the upcoming production cycle. This model can also recommend the optimal replenishment date.
To effectively manage products with short shelf lives, manufacturers require data about the locations, statuses and storage conditions of individual inventory items. RFID and IIoT can provide this data, by enabling:
- Location and status tracking for individual inventory items
- Inventory environment monitoring and control
To enable location and status tracking, a perishable item (or a container where perishables are stored) receives an RFID tag. An enterprise employee authorizes a tag with a handheld RFID reader. Upon tag authorization, an employee saves the data about the item (shelf life, batch, recommended storage conditions, etc.) to a data warehouse via a web or mobile-user application.
Once the tags are authorized, a smart-inventory management solution receives a command to track labeled inventories at different levels, whether they move down the processing line inside the manufacturing facility, sit on the shelves in a warehouse or travel from one manufacturing facility to another in a truck, etc.
When a tag gets in the range of an RFID reader, the reader scans it and passes on its ID (together with the reader’s ID and the time of the reading) to the cloud. The cloud processes the data and by identifying the location of the reader with the corresponding ID, which establishes the location of the tag at a particular time.
Along with identifying the location of perishables, RFID provides inventory specialists with data about the actual status of every labeled object. For instance, a warehouse worker uses an inventory-tracking app to request data on a particular stock-keeping unit, say, SKU X. The application extracts the data on the SKU X (updated the last time the items were in the range of a reader) and provides the following response:
There are 1,200 items of SKU X in stock. Of them 1,020 items were manufactured 27 days ago; 180 items were manufactured 120 days ago.
In case a particular product’s shelf life is soon to end, an inventory-tracking app notifies warehouse workers, say, 30 days before the expiry.
Inventory environment monitoring and control
The true value of RFID and IIoT for perishable-inventory management is that the technologies enable a shift from knowing not only the location and the status of every perishable item, but also knowing its transit and storage conditions.
To enable condition tracking, sensors monitoring the parameters critical for the products’ lifetime (temperature, humidity, exposure to daylight, etc.) are attached to the inner side of packages, vehicles or warehouse shelves. Sensor data is relayed to the cloud, where it is processed and analyzed. If any parameter deviates from the recommended norm, an inventory-management solution triggers an alert, notifying inventory managers of the violation of storage or transportation conditions. As a result, manufacturers receive up-to-the-second data about the parameters influencing the shelf life of perishable products.
Applied together, RFID and IIoT yield significant improvements in perishable-inventory management. Key benefits include:
- Decreased deterioration rate—Forecasting of the inventory volumes, along with the possibility to get alerts when a product shelf life is about to end or when storage conditions are violated, helps to limit product-deterioration rates. Avoiding inventory spoilage, in turn, leads to lower financial losses due to inventory expiration and a higher level of customer satisfaction.
- Optimized inventory management—With IIoT-based inventory-management solutions, manufacturers know the status and the location of each tagged product, enabling them to keep the optimal amount of inventory on hand and eliminate the need to order several weeks of inventory in advance. Moreover, knowing the exact location of a product, material, etc., reduces search times, which leads to faster and more efficient manufacturing and supply chain operations.
- Finding bottlenecks in the manufacturing and supply chain processes—With the data about the location and the condition of each perishable, manufacturers can pinpoint the intervals of the production process where spoilage systematically occurs. Inventory specialists can trace down sensor logs and find out when and where, exactly, storage or transportations conditions were violated.
Of course, there are limitations.
Consider tags collision, in which an RFID reader scans multiple tags at the same time. This can cause some tags to be read more than once and some to be missed. With proper implementation, tag collision can be prevented with gap pulses.
Costs can be prohibitive, too. The prices of RFID tags range from 5 cents per a passive tag to $20 per active tag, while the price of readers ranges from $3,000 to $20,000. The cost of the products to be tracked should be high enough for the inventory-tracking solution to pay off.
To sum it up
Technological advances provide ever more efficient ways of managing perishable inventory. With accurate data about the location, status and condition of perishables, inventory specialists in this digital era can prevent product expiration, thus reducing the risk of putting expired products to market and minimizing financial losses related to product expiration.
Boris Shiklo is CTO at ScienceSoft.