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RFID in the Automotive Supply Chain

Pain Points for Automotive Suppliers

Car part visibility diagram

Automotive manufacturers and parts suppliers operate in an industry that is susceptible to rapid demand changes and lack of visibility. Suppliers need to balance the right capacity of parts and materials to meet demand while accounting for the influences in the external environment. Additionally, the automotive supply chain is as global as ever, increasing the need for companies to remain competitive. As a result, companies are using RFID in the automotive supply chain to create more visibility over the flow of materials and end products. Aligning processes toward real-time demand changes allows companies to:

  • Reduce operating costs.
  • Easily identify inventory shortages and overages.
  • Improve sales performance.
  • Increase customer satisfaction.

Having the proper data and insights is central to ensuring the success of this supply chain model. In order to have real-time data and agile and adaptive supply chain operations, many businesses are leaning on RFID.

Uses of RFID in the Automotive Supply Chain

RFID has been driving efficiency efforts in this competitive industry through many areas of the automotive supply chain.

  • Automatic inventory for shipping/receiving that reduces error, delay, and return costs.
  • Locating missing items with a wide-area RFID solution.
  • Asset tracking for complete visibility of distribution.
  • Accurate inventory allows companies to move with demand, avoiding surplus and shortage.
  • Creating visible work-in-process that optimizes production.
  • Ensuring compliance in the production process.
  • RFID serial numbers to track manufacturing history.

Success Stories with RFID

In 2007, Hyundai/Kia Motors group began using RFID to monitor the flow of parts from delivery to distribution centers, the repackaging process, and final shipment out to overseas distribution centers and factories. Doing so allowed completion reports to be generated automatically and produced insights into optimization and cutting down on any errors previously caused by human intervention. Consequently, the RFID system has allowed Hyundai/Kia Motors to reduce their logistics and production costs.

In tire manufacturing, labels are applied to rubber, chemicals, and machines to ensure proper production. When an improper tag is detected in the loader, production will not begin. As a result, companies limit both errors and waste. RFID tags have also allowed companies to monitor the mileage of vehicle fleets and track compliance from tire production to final scrapping.

Implementing an RFID System

Altogether, a proper RFID system creates visibility, boosts productivity, and reduces errors. Regardless of the layout of your organization, an RFID system is ultimately the interaction between applied tags, readers, and a database that stores information. With this in mind, setting up an RFID system to improve your operations doesn’t have to be a daunting task. RMS Omega Technologies has over 20 years of experience in crafting productivity solutions for businesses and has a team of RFID experts that will analyze the unique needs of your operations. Our expertise and partnership with leading RFID device manufacturers like Zebra Technologies have been a winning combination for companies big and small in creating greater visibility and efficiency within their organization.

Learn more about using RFID in Automotive!