Asset Performance Blog Lean Manufacturing Management

Manage Inventory With RFID

EP Editorial Staff | May 1, 2023

Cloud-based system instills reliability in internal and external inventory management.

Supply-chain management is at the core of manufacturing business success. To be effective, a supply-chain strategy needs visibility, reliability, and predictability. Pandemic-driven supply challenges hit industry hard and the trend continues even a few years post-pandemic. For example, 47% of Water and Wastewater Equipment Manufacturers Association (WWEMA) members noted in their responses to the 2022 WWEMA Market Indicators Survey that the overwhelming top challenge facing their industry is supply chain. 

“With regard to supply chains, some WWEMA members have previously talked about ‘just in time’ inventory, and now they are talking about ‘just in case’ inventory,” said Tina Wojnar, WWEMA Program Manager-Policy & Member Services. “Companies are willing to incur the carrying cost to keep extraneous supply on hand so that they can be prepared for consumer demand and avoid the risk of not being able to get what they need and causing delays for their customers.”

An RFID user interface is capable of tracking the consumption of thousands of inventory packages in seconds. The automation ensures broad user adoption, automates replenishment, provides lean inventory quantities, and guarantees no stock-outs. Photos courtesy ShelfAware

RFID Solution

Some of the biggest supply-chain pain points include material shortages, lack of supply-chain visibility, gauging customer demand to prepare for future needs, congestion at critical ports, increasing transportation and freight costs, and supply-chain fragmentation. One solution is implementing digital technology that collects, analyzes, interprets, and manages high-quality,
up-to-the-minute data. The data supports the automation and forecasting tools necessary for effective supply-chain management.

Data-based RFID technology digitizes onsite inventory, turning any inventory storage area into a virtual vending machine that can drive replenishment orders directly into the supplier’s ERP and the customer’s MRP systems. This technology establishes a solid data foundation for future automation, such as smart contracts and online block-chain ledgers that automate B2B documents such as packing slips, receiving reconciliations, purchase orders, invoices, and payables and receivables.

This type of RFID technology, which uses smart labels to track parts and materials, offers several inventory-management advances:

There is a growing online community built around the idea of cloud sources. This collaborative approach to B2B supply-chain management offers a true omnichannel platform that accommodates physical (logistics, storage, tracking consumption, organizing) and digital (analytics, forecasts, replenishment metrics) aspects of complex supply chains. Plant managers can put any suppliers in the system to create an open platform, which provides one-touch integration across all channels to provide a superior customer-service experience. Adoption of tech systems usually means plant managers must make big changes, but that is not the case with this technology. 

It shifts the competitive advantage back to independent suppliers. Through collaboration, they can thrive again in the marketplace.

This solution is not based around traditional archetypes such as “sales reps in trucks,” or vending machines that would eat your money and not give you the candy bar, or plastic bin-based inventory Kanban systems.

It’s a simple solution to automate physical inventory supply chains that also provides an established foundation for a new approach to eCommerce. The system digitizes physical inventory consumption and uses that data to automate every aspect of the supply chain, regardless of complexity.

Supply-chain automation platforms equip B2B suppliers with a next-generation solution for inventory management.

Case Study

Energy Manufacturing Company (Monticello, IA) wasted time and valuable resources for many years trying to streamline its massive inventory of seals and O-rings used to manufacture cylinders for the fluid-power industry. There was no system for identifying how many parts were available, how many were scheduled to be delivered, or when more parts would be shipped to the facility. The company was often forced to pay for overnight shipping, experienced delays in delivering for their customers, and spent countless hours searching for parts.

The company found the solution it needed when it partnered with ShelfAware, Lenexa, KS (, to simplify its inventory and material management with RFID technology. Now, anyone on the shop floor has immediate access to where the parts are located, how many are in stock, how many are bagged, how many will be delivered, and when. Energy Manufacturing consolidated 12 different seal suppliers. The RFID-based software now tracks approximately 600 SKUs with about 6,000 individual bags on their shelves and generates an average of about 20,000 tags per year—comprehensively automating the company’s supply chain. 

The company’s Plant Manager, Jason Dunbar, is responsible for all aspects of an operation that manufactures about 750 cylinders a day. “Previously, we were constantly expediting seals to get in here daily to meet our shipments and to meet our product
demand,” Dunbar said. “It was a daily battle in production. We would come in and discover that we were short on seals. The seals should have been in our inventory, but we were missing them. We struggled with maintaining the inventory.” 

Since implementing the intelligent RFID technology, that pain of all those stressful activities has been minimized significantly. “Now, we get in one invoice a week, and we don’t have multiple purchase orders or emails to deal with,” Dunbar said. “We can actually service a customer who may be in the field with a seal keg that same day and have the products delivered by the next day.” 

Paying for overnight shipments was just one of the operation’s expensive inconveniences. The purchasing manager typically spent a third of his day managing the inventory seals and O-rings. “Those are parts that cost pennies, but that activity was consuming a lot of time and resources that we wanted to focus elsewhere,” Dunbar said. “With ShelfAware, now our purchasing agent spends maybe 15 minutes a day, at the most. All of those time-consuming activities are gone. It’s seamless. We don’t have to deal with purchase orders, emails, or invoices. It’s a seamless transaction that has been working for our plant.”

This inventory-management solution automates reordering, shows the customer exactly what each product costs, and tracks the inventory that is on hand. The RFID technology frees manufacturers to make more products in less time.

The inventory-management platform consolidated its seal supply chain to a single seal supplier. Since deployment, immediate results were seen including:

• elimination of production delays due to missing seals or stock outs
• elimination of the need for manual purchase orders
• elimination of restrictive minimum-order requirements
• creation of full supply-chain visibility from the shelf to the vendor.

Intelligent RFID inventory management can effectively automate B2B supply chains, saving time and labor for supplier and customer. EP

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