Have you ever wondered how everything we purchase are stored and come to our hands as fast

as possible? Well, to put it simply, manufacturers have two ways of automated data tracking and
collection as RFID and barcoding.

Barcoding is the most common way of data collection carried by many businesses. I’m sure you
must have experienced barcode scanning in self-checkout counters either in Kmart or Coles. It’s
simply representation of data using codes as a sequence of lines. Barcoding is often considered
accurate and less expensive. However, barcoding carries disadvantages such as higher labour
usage due to scanning one item at a time. Barcoding is also easily prone to damage since they
printed on a paper or a tag. Therefore, if the paper is damaged scanning becomes a problem.
Barcodes also could be scanned with maintaining a clear sight distance less than 5ft which is
considered less user friendly.

Comparatively, Radio Frequency Identification (RFID) also involves a tag attached to an item
and scans and tracks the item using radio waves. RFID tags contain micro-chips that store
information about the item which could be over written when needed. RFID tags could be
generally scanned faster and from bigger distance. Although this technology is a bit expensive
many RFID tags could be read at the same time and they contain higher level of security.

So which one is better for inventory management?

Proper management of inventories is vital in supply chain management. However, which

technology to use may depend on the nature of the business. Whilst both of them carry pros and
cons, Karkkainen (2003) argues that RFID would be more appropriate to short-shelf-life grocery
goods due to their larger volume, higher demand and temperature control. Comparatively, a
study done by Chan, Choi and Hui (2012) show that RFID has only a success rate of 60%-70%
compared to barcoding in healthcare and apparel industries.

As you can see, both these automated data collection technologies have their own capabilities,
pros and cons. Businesses may choose either depending on their capacity and requirements.
However, having one of these may definitely help in inventory management but having both
would be much more productive supply chain management.

What do you think? Isn’t it better to combine technologies and reap the benefits faster?
Reference

Chan, H, Choi, T & Hui, C 2012, ‘RFID versus bar-coding systems: Transactions errors in health
care apparel inventory control’, Decision Support Systems, vol.54, no.1, pp.803-811.

Karkkainen, M 2003, ‘Increasing efficiency in the supply chain for short shelf life goods using
RFID tagging’, International Journal of Retail & Distribution Management, vol.31, no.10, PP.
529-536.